Question

ACC 101 Comprehensive Problem
Sunshine Cleaning Service
REQUIRED
(a)	Journalize and post the August transactions.  Use page J1 for the journal.
(b)	Prepare a trial balance at August 31.
(c)	Journalize and post the adjusting entries.  Use page J2 for the journal.
(d)	Prepare an adjusted trial balance at August 31.
(e)	Prepare the Income Statement and Statement of Owners Equity for August.
(f)	Prepare a classified Balance Sheet at August 31, 2017.
(g)	Journalize and post the closing entries.  Use page J3 for the journal.
(h)	Prepare a post-closing trial balance at August 31.

ACC101 Comprehensive Problem

Sunshine Cleaning Service

Ethan Groom opened Sunshine Cleaning Service on August 1, 2017. During July, the company completed the following transactions:

Aug

1

Ethan Groom invested $42,000 cash and $5,800 of cleaning equipment in the business.

1

Purchased a used truck for $12,000, paying $3,500 cash and the balance on account.

3

Purchased cleaning supplies for $1,375 on account.

5

Paid $1,800 on a one-year insurance policy, effective August 1.

12

Billed customers $4,892 for cleaning services.

18

Paid $1,500 of amount owed on truck.

19

Paid $375 of amount owed for cleaning supplies.

20

Paid $968 for employee salaries.

21

Collected $3,225 from customers billed on August 12.

25

Billed customers $3,575 for cleaning services.

31

Paid gasoline for the month on the truck, $245.

31

Groom withdrew $900 for personal use.

Adjustments:

Aug

31

Earned but unbilled fees at August 31 were $2,795.

Depreciation on truck for the month was $250.

One-twelfth of the insurance expired.

An inventory count shows $548 of cleaning supplies on hand at August 31.

Accrued but unpaid employee salaries were $585.

Journal ...Page J1

Date	Description	Post. Ref.	Debit	Credit

Answer 1

a) Journal Entries for August transactions is shown as follows:-   

Journal Entries (Amount in $)

Date	Description	Post. Ref.	Debit	Credit
8/1/2017	Cash		42,000
	Equipment		5,800
	Common Stock			47,800
8/1/2017	Truck		12,000
	Cash			3,500
	Accounts Payable			8,500
8/3/2017	Supplies		1,375
	Accounts Payable			1,375
8/5/2017	Prepaid Insurance		1,800
	Cash			1,800
8/12/2017	Accounts Receivable		4,892
	Service Revenue			4,892
8/18/2017	Accounts Payable		1,500
	Cash			1,500
8/19/2017	Accounts Payable		375
	Cash			375
8/20/2017	Salaries expense		968
	Cash			968
8/21/2017	Cash		3,225
	Accounts Receivable			3,225
8/25/2017	Accounts Receivable		3,575
	Service Revenue			3,575
8/31/2017	Fuel Expenses		245
	Cash			245
8/31/2017	Drawings		900
	Cash			900

c) Adjusting entries are shown as follows:-

Journal Entries (Amount in $)

Date	Description	Post. Ref.	Debit	Credit
8/31/2017	Accounts Receivable		2,795
	Service Revenue			2,795
8/31/2017	Depreciation Expense-Truck		250
	Accumulated Depreciation-Truck			250
8/31/2017	Insurance expense (1/12th of $1,800)		150
	Prepaid Insurance			150
8/31/2017	Supplies expense ($1,375-$548)		827
	Supplies			827
8/31/2017	Salaries expense		585
	Salaries Payable			585

a and c) Posting of august transactions and adjusting entries to ledger. (Amount in $)

Cash

Date	Particulars	Amount	Date	Particulars	Amount
8/1	Opening Balance	0	8/1	Truck	3,500
8/1	Common Stock	42,000	8/5	Prepaid Insurance	1,800
8/21	Accounts Receivable	3,225	8/18	Accounts Payable	1,500
			8/19	Accounts Payable	375
			8/20	Salaries expense	968
			8/31	Fuel Expenses	245
			8/31	Drawings	900
			8/31	Closing Balance	35,937
		45,225			45,225

Accounts Receivable

Date	Particulars	Amount	Date	Particulars	Amount
8/1	Opening Balance	0	8/21	Cash	3,225
8/12	Service Revenue	4,892	8/31	Closing Balance	8,217
8/25	Service Revenue	3,575
8312	Service Revenue	2,975
		11,442			11,442

Supplies

Date	Particulars	Amount	Date	Particulars	Amount
8/1	Opening Balance	0	8/31	Supplies Expense	827
8/3	Accounts Payable	1,375	8/31	Closing Balance	548
		1,375			1,375

Prepaid Insurance

Date	Particulars	Amount	Date	Particulars	Amount
8/5	Cash	1,800	8/31	Insurance expense	150
			8/31	Closing Balance	1,650
		1,800			1,800

Accounts Payable

Date	Particulars	Amount	Date	Particulars	Amount
8/18	Cash	1,500	8/1	Truck	8,500
8/19	Cash	375	8/3	Supplies	1,375
8/31	Closing Balance	8,000
		9,875			9,875

Salaries Payable

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Closing Balance	585	8/31	Salaries expense	585

Service Revenue

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Closing Balance	11,262	8/12	Accounts Receivable	4,892
			8/25	Accounts Receivable	3,575
			8/31	Accounts Receivable	2,795
		11,262			11,262

Salaries Expense

Date	Particulars	Amount	Date	Particulars	Amount
8/20	Cash	968	8/31	Closing Balance	1,553
8/31	Salaries Payable	585
		1,553			1,553

Fuel Expense

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Cash	245	8/31	Closing Balance	245

Insurance Expense

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Prepaid Insurance	150	8/31	Closing Balance	150

Equipment

Date	Particulars	Amount	Date	Particulars	Amount
8/1	Common Stock	5,800	8/31	Closing Balance	5,800

Truck

Date	Particulars	Amount	Date	Particulars	Amount
8/1	Cash	3,500	12/31	Closing Balance	12,000
8/1	Accounts Payable	8,500

Accumulated Depreciation-Truck

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Closing Balance	250	8/31	Depreciation expense	250

  Common Stock

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Closing Balance	47,800	8/1	Cash	42,000
			8/1	Equipment	5,800

Depreciation Expense-Truck

Date	Particulars	Amount	Date	Particulars	Amount
8/31	Accumulated Depreciation-Truck	250	8/31	Closing Balance	250

b) Unadjusted Trial Balance

Accounts	Debit	Credit
Cash	35,937
Accounts Receivable (before adjustment)	5,242
Supplies (before adjustments)	1,375
Prepaid Insurance (before adjustments)	1,800
Truck	12,000
Accounts Payable		8,000
Service Revenue (before adjustments)		8,467
Salaries expense (before adjustments)	968
Common Stock		47,800
Drawings	900
Equipment	5,800
Fuel expense	245
Totals	64,267	64,267

c) Adjusted Trial Balance

Accounts	Debit	Credit
Cash	35,937
Accounts Receivable (after adjustment)	8,217
Supplies (after adjustments)	548
Supplies expense	827
Prepaid Insurance (after adjustments)	1,650
Insurance expense	150
Truck	12,000
Depreciation expense-Truck	250
Accumulated Depreciation-Truck		250
Accounts Payable		8,000
Service Revenue (after adjustments)		11,442
Salaries expense (after adjustments) (968+585)	1,553
Salaries Payable		585
Common Stock		47,800
Drawings	900
Equipment	5,800
Fuel expense	245
Totals	68,077	68,077