Chapter 3, Problem 1COP

Journalizing, Posting, Adjusting, Preparing, and Closing Financial Statements

Brava Landscaping, Inc., completed the following transactions during its first month of operations for January 2018:

1. a. Gabrielle Brava invested $8,500 cash and a truck valued at $16,000 to start Brava Landscaping, Inc.; the business issued common stock in exchange for these assets.
2. b. Purchased $450 of supplies on account.
3. c. Paid $1,800 for a six-month insurance policy.
4. d. Performed landscape services for a customer and received $925 cash.
5. e. Completed a $5,300 landscaping job on account.
6. f. Paid employee salary, $820.
7. g. Received $1,560 cash for performing landscaping services.
8. h. Collected $1,350 in advance for landscaping service to be performed later.
9. i. Collected $2,800 cash from a customer on account.
10. j. Purchased fuel for the truck, paying $110 with a company credit card; credit Accounts Payable.
11. k. Performed landscaping services on account. $2,130.
12. l. Paid the current month's office rent. $1,150.
13. m. Paid $400 on account.
14. n. Paid cash dividends of $1,000.

Requirements

1. 1. Record each transaction in the general journal. Use the letter corresponding to each transaction as the transaction date. Explanations are not required.
2. 2. Post the transactions you recorded in Requirement 1 in the following T-accounts.

Cash	Salaries Payable	Service Revenue
Accounts Receivable	Unearned Service Revenue	Salaries Expense
Supplies	Common Stock	Depreciation Expense, Truck
Prepaid Insurance	Retained Earnings	Insurance Expense
Truck	Dividends	Fuel Expense
Accumulated Depreciation, Truck		Rent Expense
Accounts Payable		Supplies Expense

1. 3. Prepare an unadjusted trial balance as of January 31, 2018.
2. 4. Journalize and post the adjusting journal entries on January 31, 2018, based on the following information:
   1. a. Accrued salaries expense. $470.
   2. b. Depreciation expense, $330.
   3. c. Record the expiration of one month’s insurance.
   4. d. Supplies on hand, $85.
   5. e. Earned two-thirds of the Unearned Service Revenue during January.
3. 5. Prepare an adjusted trial balance as of January 31, 2018. Use the adjusted trial balance to prepare Brava Landscaping’s income statement and statement of retained earnings for the month ending January 31, 2018, and a balance sheet at January 31, 2018. On the income statement, list expenses in decreasing order by amount—that is the largest expense first and the smallest expense last.
4. 6. Journalize and post the closing entries.
5. 7. Prepare a post-closing trial balance at January 31, 2018.