Comprehensive Problem
Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2017. During July, the company completed the following transactions.
July 1 Stockholders invested $16,000 cash in the business in exchange for common stock.
1 Purchased a used truck for $10,000, paying $3,200 cash and the balance on account.
3 Purchased cleaning supplies for $700 on account.
5 Paid $2,280 on a 1-year insurance policy, effective July 1.
12 Billed customers $3,500 for cleaning services.
18 Paid $1,100 of amount owed on truck, and $270 of amount owed on cleaning supplies.
20 Paid $1,700 for employee salaries.
21 Collected $1,500 from customers billed on July 12.
25 Billed customers $1,800 for cleaning services.
31 Paid gasoline for the month on the truck, $500.
31 Declared and paid a $600 cash dividend.
Instructions:
A. Journalize and post the July transactions.
B. Prepare a trial balance at July 31 on a worksheet.
C. Enter the following adjustments on the worksheet, and complete the worksheet.
(1) Unbilled fees for services performed at July 31 were $1,300.
(2) Depreciation on equipment for the month was $210.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $300 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $400.
D. Prepare the income statement for July 31, 2017
E. Journalize and post the adjusting entires
F. Journalize and post the closing entries and complete the closing process.
G. Prepare a post closing trial balance at July 31.