Problem 1 - Dave Johnson Corporation open for business Jan 1 and provide you with their trial balance:
Dave Johnson Corporation Trial Balance 1/1/2016
Debit Credit
Cash $196,000
Prepaid Insurance $45,000
Account Receivable $0
Supplies $26,000
Land $200,000
Buildings $1,200,000
Equipment $160,000
Accounts Payable $45,000
Unearned Service Revenue $46,000
Mortgage Payable $600,000
Common Stock $910,000
Retained Earnings $90,000
Dividends $50,000
Service Revenue $762,000
Salaries & Wages Expense $448,000
Utilities Expenses $92,000
Repairs and Maintenance Expense $36,000
$2,453,000 $2,453,000
Other Information: Transactions for the Month of January
1/5 Purchased supplies on account for $15,000
1/7 Purchased equipment for $25,000 cash
1/10 Billed customers $50,000 for services performed
1/12 Paid $10,000 for utilities
1/14 Paid wages of $15,000
1/16 Paid $5,000 for repairs
1/18 Made $8,000 in payment towards accounts payable
1/20 Received $35,000 from collection on account receivables
1/22 Dividend payment of $5,000 to shareholders
1/24 Purchased four acres of land for $15,000
1/26 Paid wages of $13,000
1/31 Paid mortgage of $10,000
Instructions:
a. Prepare journal entries for January's transactions.
b. Post transactions to the appropriate general ledger accounts (T Accounts).
c. Prepare adjusted trial balance as at January 31.
d. Prepare an income statement, statement of retained earnings and balance sheet for the month of January.
e. Prepare a closing summary.
Problem 2 - Dave Harris opened a lawn service company on April1, 2012. At April 30, the trial balance shows the following selected accounts shown below:
Prepaid Insurance $3,600
Equipment $28,000
Notes Payable $20,000
Unearned Service Revenue $4,200
Service Revenue $1,800
Analysis of the accounts revealed the following additional data:
1. Prepaid insurance is the cost of a 2 year insurance policy, effective April 1
2. Depreciation on the equipment is $500 per month
3. The note payable is dated April 1. It is a 6-month 12% note
4. Seven customers paid for the company's 6 month's lawn service package of $600 beginning April. The company performed services for these customers in April
5. Lawn services provided other customers but not recorded at April 30 totaled $1,500
Instructions: Prepare the adjusting entries for the month of April and show your computations.