Question: The general ledger of Pipers Plumbing at January 1, 2012, includes the following account balances:
The following is a summary of the transactions for the year:
a. Provide plumbing services for cash, $15,000, and on account, $60,000.
b. Collect on accounts receivable, $48,000.
c. Issue shares of common stock in exchange for $10,000 cash.
d. Pay salaries for the current year, $32,000.
e. Pay for utilities expenses, $12,000, of which $5,000 represents costs for 2011.
f. Receive cash in advance from customers, $8,000.
g. Pay $2,000 cash dividends to stockholders.
Required: 1. Set up the necessary T-accounts and enter the beginning balances from the trial balance. In addition to the accounts shown, the company has accounts for Dividends, Service Revenue, Salaries Expense, Utilities Expense, Supplies Expense, and Depreciation Expense.
2. Record each of the summary transactions listed above.
3. Post the transactions to the accounts.
4. Prepare an unadjusted trial balance.
5. Record adjusting entries. Depreciation for the year on the machinery is $6,000. Plumbing supplies remaining on hand at the end of the year equal $1,000. Of the $8,000 paid in advance by customers, $6,000 of the work has been completed by the end of the year.
6. Post adjusting entries.
7. Prepare an adjusted trial balance.
8. Prepare an income statement for 2012 and a classified balance sheet as of December 31, 2012.
9. Record closing entries.
10. Post closing entries
11. Prepare a post-closing trial balance