Question

Complete all steps in accounting cycle.

(LO 1, 2) AP

Laura Eddy opened Eddy's Carpet Cleaners on March 1, 2017. In March, the following transactions were completed:

Mar. 1	Laura invested $10,000 cash in the business.
1	Purchased a used truck for $6,500, paying $1,500 cash and signing a note payable for the balance.
3	Purchased supplies for $1,200 on account.
5	Paid $1,200 on a one-year insurance policy, effective March 1.
12	Billed customers $4,800 for cleaning services.
18	Paid $500 of amount owed on supplies.
20	Paid $1,800 for employee salaries.
21	Collected $1,400 from customers billed on March 12.
25	Billed customers $2,500 for cleaning services.
31	Paid $375 for fuel for the month on the truck.
31	Withdrew $900 cash for personal use.

Instructions

(a)  

Journalize and post the March transactions.

(b)  

Prepare a trial balance at March 31.

(c)  Journalize and post the following adjustments:

• 1.The truck has an estimated useful life of five years.
• 2.One twelfth of the insurance expired.
• 3.An inventory count shows $400 of supplies on hand at March 31.
• 4.Accrued but unpaid employee salaries were $500.
• 5.The note payable has a 4.5% annual interest rate.
• 6.Earned but unbilled fees at March 31 were $500.

(d)  

Prepare an adjusted trial balance.

(e)  

Prepare the income statement and statement of owner's equity for March, and a classified balance sheet at March 31, 2017. Of the note payable, $2,000 must be paid by March 1, 2018.

(f)  

Journalize and post the closing entries.

(g)  

Prepare a post-closing trial balance at March 31.

Answer 1