John’s House Painting Company has following transactions for the year:
1. December 1: Issued capital stock for $100,000 to start a house painting business.
2. December 1: Paid one year insurance premium costing $4,800.
3. December 1: Paid gas expense $200.
4. December 1: Purchased equipment costing $4,800 on credit.
5. December 12: Purchased supplies costing $800 on credit.
6. December 18: Painted three houses totaling $12,000 and billed customers.
7. December 23: Painted three rooms and billed customers $500.
8. December 28: Received $2,000 for houses painted in #6.
9. December 31: Paid for equipment purchased in #4.
10. December 31: Received $1,000 for the job to paint the house in January next year.
11. December 31: Paid a $1,000 dividend.
Required:
1. Make journal entries for the above transactions.
2. Post the above transactions to T Accounts.
3. Make the Trial Balance.
4. Make adjusting entries in journal format and post to T Accounts.
Supplies on Hand December 31 was $400.
The Equipment is to be depreciated over 48 months starting with December. (HINT; Record one month depreciation expense).
Wages owed but not paid on December 31 was $200. One month of insurance has expired.
5. Make an Adjusted Trial Balance.
6. Make Income Statement, Statement of Retained Earnings and a Balance Sheet.
7. Make closing entries in the journal format and post to the T Accounts.
8. Make the Post-Closing Trial Balance.