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(d) Prepare the income statement and owners equity statement for July, and a classified balance
sheet at July 31, 2014.
(e) Journalize and post the adjusting entries. Use page J2 for the journal.
(f) Journalize and post the closing entries, and complete the closing process. Use page J3 for the
journal.
(g) Prepare a post-closing trial balance at July 31.
SOLUTION
(a)
General Journal
Date
July
1
1
3
5
12
18
20
21
25
Ref.
101
301
Debit
14,000
Equipment................................................................
Cash.............................................................
Accounts Payable........................................
157
101
201
10,000
Supplies....................................................................
Accounts Payable........................................
126
201
800
Prepaid Insurance.....................................................
Cash.............................................................
130
101
1,800
Accounts Receivable................................................
Service Revenue..........................................
112
400
3,800
Accounts Payable.....................................................
Cash.............................................................
201
101
1,400
726
101
1,600
Cash..........................................................................
..................................................................................
Accounts Receivable...................................
101
1,400
Accounts Receivable................................................
Service Revenue..........................................
112
400
Credit
14,000
3,000
7,000
800
1,800
3,800
1,400
1,600
112
1,400
1,500
1,500
31
31
Gasoline Expense.....................................................
Cash.............................................................
633
101
400
Owners Drawings...................................................
Cash.............................................................
306
101
600
400
600
Account Titles
Trial Balance
Dr.
Cr.
Adjustments
Dr.
Cr.
Cash
6,600
Accounts Receivable
3,900
Supplies
800
(d) 700
Prepaid Insurance
1,800
(c) 150
Equipment
10,000
(a) 1,300
Adjusted
Income
Trial Balance
Statement
Dr.
Cr.
Dr.
Cr.
Balance Sheet
Dr.
6,600
6,600
5,200
5,200
100
Cr.
100
1,650
1,650
10,000
10,000
Accounts Payable
6,400
6,400
6,400
Owners Capital
14,000
14,000
14,000
Owners Drawings
600
Service Revenue
5,300
Gasoline Expense
400
1,600
Total
Depreciation Expense
600
25,700
(a) 1,300
600
6,600
6,600
400
400
(e) 500
2,100
2,100
(b) 200
200
200
25,700
Accum. Depr.Equipment
(b) 200
200
200
Insurance Expense
(c) 150
150
150
Supplies Expense
(d) 700
700
700
(e) 500
2,850
2,850
500
27,700
27,700
500
3,550
6,600
24,150
3,050
6,600
Key: (a) Service Revenue; (b) Depreciation Expense; (c) Insurance Expired; (d) Supplies Used; (e) Unpaid Salaries.
21,100
3,050
6,600
24,150
24,150
Explanation
1
1
5
18
20
21
31
31
Ref.
J1
J1
J1
J1
J1
J1
J1
J1
No. 101
Debit
14,000
Credit
3,000
1,800
1,400
1,600
1,400
400
600
Accounts Receivable
Date
July
Explanation
12
21
25
31
Adjusting
Ref.
J1
J1
J1
J2
No. 112
Debit
3,800
Credit
1,400
1,500
1,300
Supplies
Date
July
Explanation
3
31
Adjusting
Ref.
J1
J2
Explanation
5
31
Adjusting
Ref.
J1
J2
Debit
800
Credit
700
Explanation
1
Ref.
J1
Debit
1,800
Credit
150
31
Explanation
Adjusting
Ref.
J2
Balance
1,800
1,650
No. 157
Debit
10,000
Credit
Accumulated DepreciationEquipment
Date
July
Balance
800
100
No. 130
Equipment
Date
July
Balance
3,800
2,400
3,900
5,200
No. 126
Prepaid Insurance
Date
July
Balance
14,000
11,000
9,200
7,800
6,200
7,600
7,200
6,600
Debit
Balance
10,000
No. 158
Credit
200
Balance
200
Accounts Payable
Date
July
Explanation
1
3
18
Ref.
J1
J1
J1
No. 201
Debit
Credit
7,000
800
1,400
Explanation
Adjusting
Ref.
J2
Debit
No. 212
Credit
500
Owners Capital
Date
July
Explanation
1
31
31
Closing
Closing
Ref.
J1
J3
J3
Explanation
31
31
Closing
Ref.
J1
J3
Debit
Credit
14,000
3,050
600
31
31
31
Explanation
Closing
Closing
Closing
Ref.
J3
J3
J3
Debit
600
Credit
600
Explanation
12
25
31
31
Adjusting
Closing
Ref.
J1
J1
J2
J3
Debit
Credit
6,600
3,550
3,050
31
31
Explanation
Adjusting
Closing
Ref.
J2
J3
Gasoline Expense
Balance
6,600
3,050
0
No. 400
Debit
Credit
3,800
1,500
1,300
6,600
Supplies Expense
Date
July
Balance
600
0
No. 350
Service Revenue
Date
July
Balance
14,000
17,050
16,450
No. 306
Income Summary
Date
July
Balance
500
No. 301
Owners Drawings
Date
July
Balance
7,000
7,800
6,400
Balance
3,800
5,300
6,600
0
No. 631
Debit
700
Credit
700
Balance
700
0
No. 633
Date
July
Explanation
31
31
Closing
Ref.
J1
J3
Debit
400
Credit
Balance
400
0
400
Depreciation Expense
Date
July
31
31
Explanation
Adjusting
Closing
Ref.
J2
J3
No. 711
Debit
200
Credit
Balance
200
0
200
Insurance Expense
Date
July
31
31
Explanation
Adjusting
Closing
Ref.
J2
J3
No. 722
Debit
150
Credit
Balance
150
0
150
Explanation
Adjusting
Closing
Ref.
J1
J2
J3
Debit
1,600
500
No. 726
Credit
Balance
1,600
2,100
0
2,100
(d)
KRISTINS MAIDS CLEANING SERVICE
Income Statement
For the Month Ended July 31, 2014
Revenues
Service revenue........................................................................
$6,600
Expenses
Salaries and wages expense.....................................................
$2,100
Supplies expense......................................................................
700
Gasoline expense.....................................................................
400
Depreciation expense...............................................................
200
Insurance expense....................................................................
150
Total expenses................................................................
3,550
$3,050
Add: Investments.............................................................................
$14,000
Net income..........................................................................
3,050
0
17,050
17,050
Less: Drawings..................................................................................
600
$16,450
Assets
Current assets
Cash ........................................................................................
$6,600
Accounts receivable.................................................................
5,200
Supplies....................................................................................
100
Prepaid insurance.....................................................................
1,650
$13,550
Equipment................................................................................
10,000
200
Total assets.....................................................................
9,800
$23,350
$6,400
500
$ 6,900
Owners equity
Owners capital........................................................................
16,450
$23,350
(e)
General Journal
Date
July 31
31
31
31
31
J2
Ref.
112
400
Debit
1,300
Depreciation Expense.............................................
Accumulated Depreciation
Equipment...............................................
711
200
158
Insurance Expense..................................................
Prepaid Insurance........................................
722
130
150
Supplies Expense....................................................
Supplies.......................................................
631
126
700
726
212
500
Credit
1,300
200
150
700
500
(f)
General Journal
Date
July 31
J3
Ref.
400
Debit
6,600
Credit
31
31
31
Income Summary........................................
350
6,600
Income Summary....................................................
Salaries and Wages Expense.......................
Depreciation Expense.................................
Insurance Expense......................................
Supplies Expense........................................
Gasoline Expense........................................
350
726
711
722
631
633
3,550
Income Summary....................................................
Owners Capital..........................................
350
301
3,050
Owners Capital......................................................
Owners Drawings......................................
301
306
600
2,100
200
150
700
400
3,050
600
(g)
KRISTINS MAIDS CLEANING SERVICE
Post-Closing Trial Balance
July 31, 2014
Cash..............................................................................................
Debit
$ 6,600
Accounts Receivable....................................................................
5,200
Supplies........................................................................................
100
Prepaid Insurance.........................................................................
1,650
Equipment.....................................................................................
10,000
Accumulated DepreciationEquipment......................................
Credit
200
Accounts Payable.........................................................................
6,400
500
Owners Capital............................................................................
16,450
$23,550
$23,550