Problem - Laura Eddy opened Eddy's Carpet Cleaners on March 1. During March, the following transactions were completed.
Mar. 1 Issued stock for $10,000 in cash.
Mar. 1 Purchased used truck for $6,000, paying $3,000 cash and the balance on account.
Mar. 3 Purchased cleaning supplies for $1,200 on account.
Mar. 5 Paid $1,200 cash on one-year insurance policy effective March 1.
Mar. 14 Billed customers $4,800 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 $1,800 cash for employee salaries.
Mar. 21 Collected $1,400 cash from customers billed on March 14.
Mar. 28 Billed customers $2,500 for cleaning services.
Mar. 31 Paid gas and oil for month on truck $200.
Mar. 31 Declared and paid a $700 cash dividend.
The chart of accounts for Eddy's Carpet Cleaners contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense
Required -
Journalize the March transactions. Use page J1 for the journal.
Prepare a trial balance at March 31 on a worksheet.
- Earned but unbilled revenue at March 31 was $700.
- Depreciation on equipment for the month was $250.
- One-twelfth of the insurance expired.
- An inventory count shows $400 of cleaning supplies on hand at March 31.
- Accrued but unpaid employee salaries were $500.
Prepare the income statement and retained earnings statement for March and a classified balance sheet at March 31.
Journalize adjusting entries. Use page J2 for the journal.
Journalize the closing entries. Use page J3 for the journal.