Omit journal explanations, insert one blank line between journal transactions. Do not alter the pages in the blank answer sheet. There are sufficient number of lines for each part of the problem.
Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2014.
During July, the company completed the following transactions.
July 1 Invested $14,400 cash in the business.
July 1 Purchased a used truck for $10,000, paying $2,000 cash and the balance using a Notes Payable.
July 3 Purchased cleaning supplies for $600 on account.
July 5 Paid $3,600 on a 1-year insurance policy, effective July 1.
July 12 Billed customers $3,800 for cleaning services.
July 18 Paid $2,000 of amount owed on truck, and $400 of amount owed on cleaning supplies (prepare a compound entry.)
July 20 Paid $1,600 for employee salaries.
July 25 Billed customers $1,500 for cleaning services.
July 31 Paid gasoline for truck, $400 and withdrew $600 cash for personal use (prepare a compound entry.)
Instructions:
a. Journalize the July transactions.
b. Prepare and record the adjusting journal entries for the following July 31 end of period adjustments:
1. Unbilled fees for services performed at July 31 were $1,300.
2. Depreciation on equipment for the month was $200.
3. One month of the insurance expired.
4. An inventory count shows $100 of cleaning supplies on hand at July 31.
5. Accrued but unpaid employee salaries were $500.
c. Prepare and record the closing journal entries for the month of July.
d. Prepare an income statement for the month of July.