Problem - Michael's Plumbing Company has the following transactions for the year
a. December 1 - Issued capital stock for $50,000 to start plumbing business.
b. December 1 - Paid gas expense $500.
c. December 1 - Paid one year insurance premium costing $3,600.
d. December 2 - Received $3,000 for job to install plumbing system in January next year.
e. December 8 - Plumbing repairs for three houses totaling $15,000 and billed customers.
f. December 10 - Purchased equipment costing $8,400 on credit.
g. December 12 - Purchased supplies costing $900 on credit.
h. December 23 - Plumbing services completed and billed to customers for $1,500.
i. December 24 - Paid for equipment purchased on December 10th.
j. December 28 - Received $2,000 for the repairs done on December 8th.
k. December 31 - Paid a $1,000 dividend.
Required:
1. Prepare journal entries for the above transactions. Be sure to identify them as a through k.
2. Post the above transactions to T Accounts.
3. Prepare a Trial Balance.
4. Prepare adjusting entries in journal format and post to T Accounts.
Supplies on Hand December 31 was $500.
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 $250.
One month of insurance has expired.
5. Prepare an Adjusted Trial Balance.
6. Prepare an Income Statement, Statement of Retained Earnings and a Balance Sheet.
7. Prepare closing entries in journal format and post to the T Accounts.
8. Prepare a Post-Closing Trial Balance.