Concept explainers
Completing the accounting cycle from
Learning Objectives 1, 2,3,4,5
6. Ending Capital $72,080
On December 1, Curt Wilson began an auto repair shop, Wilson’s Quality Automotive. The following transactions occurred during December:
Dec 1Waldo contributed $70,000 cashto thebusinessin exchange for capital.
1. Purchased $12,000 of equipment paying cash.
1. Paid $1,750 forafive-month Insurance policy starting on December 1.
9 Paid $20,009 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $2,000,
19 Borrowed $15,000 from the bank for business use. Waldo signed a note payable to the bank in the name of the business. The note is due in five years.
22 Paid $1,300 for advertising expenses
20 Paid $900 on account
20 The business received a bill for utilities to be paid in January, $200.
31Revenues earned during the month included $10,000 cash and $3,600 on account.
31 Paid employees' salaries $3,800 and building rent $1,200. Record as a compound entity,
31 The business received $1,440 for auto screening services to be performed next month.
31 Waldo withdrew cash of $5,500.
The business uses the following accounts: Cash;
Adjustment data:
- Office Supplies used during the month, S600.
- Depreciation forthe month, S240.
- One month insurance has expired.
- Accrued Interest Expense, S120.
Requirements
- Prepare the journal entries, and post to the T-accounts.
- Prepare an unadjusted trialbalance.
- Complete the worksheet forthe month ended December 31,2018 (optional).
- Prepare the
adjusting entries , and post to the T-accounts. - Prepare an adjusted trial balance.
- Prepare the income statement, the statement of owner's equity, and the classified balance sheet in report form.
- Prepare the closing entries, and post to the T-accounts.
- Prepare a post-closing trialbalance.
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Horngren's Accounting (12th Edition)
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