Problem - Julie Molony opened Valet Cleaners on March 1, 2007. During March, the following transactions were completed.
Mar. 1 Issued 10,000 shares of common stock for $15,000 cash.
Mar. 1 Purchased used truck for $8,000, paying $5,000 cash and the balance on account.
Mar. 3 Purchased cleaning supplies for $1,200 on account.
Mar. 5 Paid $1,800 cash on 1-year insurance policy effective March 1.
Mar. 14 Billed customers $3,200 for cleaning services.
Mar. 18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies.
Mar. 20 Paid $1,750 cash for employee salaries.
Mar. 21 Collected $1,600 cash from customers billed on March 14.
Mar. 28 Billed customers $4,200 for cleaning services.
Mar. 31 Paid $350 for gas and oil used in truck during month.
Mar. 31 Declared and paid a $900 cash dividend.
The chart of accounts for Valet Cleaners 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 March transactions.
(b) Post to the ledger accounts. (Use T accounts.)
(c) Prepare a trial balance at March 31.
(d) Journalize the following adjustments.
1. Earned but unbilled revenue at March 31 was $600.
2. Depreciation on equipment for the month was $250.
3. One-twelfth of the insurance expired.
4. An inventory count shows $280 of cleaning supplies on hand at March 31.
5. Accrued but unpaid employee salaries were $830.
(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 March and a classified balance sheet at March 31.
(h) Journalize and post closing entries and complete the closing process.
(i) Prepare a post-closing trial balance at March 31.