Linda Blye opened Cardinal Window Washing Inc. on July 1, 2010. During July the following transactions were completed.
July 1 Issued 11,000 shares of common stock for $11,000 cash.
1 Purchased used truck for $9,000, paying $2,000 cash and the balance on account.
3 Purchased cleaning supplies for $900 on account.
5 Paid $1,800 cash on 1-year insurance policy effective July 1.
12 Billed customers $3,200 for cleaning services.
18 Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies.
20 Paid $2,000 cash for employee salaries.
21 Collected $1,400 cash from customers billed on July 12.
25 Billed customers $2,500 for cleaning services.
31 Paid $260 for gas and oil used in the truck during month.
31 Declared and paid $600 cash dividend.
The chart of accounts for Cardinal Window Washing contains the following accounts:
Cash, Accounts Receivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment,
Accounts Payable, Salaries Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue,
Gas & Oil Expense, Cleaning Supplies Expense, Depreciation Expense, Insurance Expense, Salaries Expense.
Instructions
a. Journalize the July transactions.
b. Post to the ledger accounts
c. Prepare a trial balance at July 31.
d. Journalize the following adjustments.
1. Services provided but unbilled and uncollected at July 31 were $1,700.
2. Depreciation on equipment for the month was $250.
3. One-twelfth of the insurance expired.
4. An inventory count shows $360 of cleaning supplies on hand at July 31.
5. Accrued but unpaid employee salaries were $400.
e. Post adjusting entries to the T accounts.
f. Prepare an adjusted trial balance.
g. Prepare the income statement and a retained earnings statement for July and a classified balance sheet at July 31.
h. Journalize and post closing entries and complete the closing process.
i. Prepare a post-closing trial balance at July 31.
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