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Completing the accounting cycle from
On December 1, Bob Wonder began an auto repair shop, Wonders Quality \ unmodve. The following transactions occurred during December:
Dec. 1 Wonder contributed 555,000 cash to the business in exchange for capita 1 Purchased $9,000 of equipment paying cash.
1 Paid $1,000 for a four-month insurance policy starting on December I 9 Paid $16,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $2,900.
19 Borrowed $30,000 from the bank for business use. Wonder signed a note payable to the bank in the name of the business. The note is due in five years.
22 Paid $ 1,200 for advertising expenses.
26 Paid $500 on account.
28 The business received a bill for utilities to be paid in January, $230.
31 Revenues earned during the month included $20,500 cash and $3,300 on account.
31 Paid employees' salaries $3,1 CO and building rent $1,000. Record as a compound entry.
31 The business received $1,050 for auto screening services to be performed next month.
31 Wonder withdrew cash of $3,500.
The business uses the following accounts: Cash;
Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Wonder, Capital; Wonder, Withdrawals; Income Summary; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense-Equipment. Adjustment data:
- Office Supplies used during the month, $900.
- Depreciation for the month, $150.
- One month insurance has expired.
- Accrued Interest Expense, $75.
Requirements
- Prepare the journal entries, and post to the T-accounts.
- Prepare an unadjusted trial balance.
- Complete the worksheet for the month ended December 31.2016. (optional)
- repare the
adjusting entries , and post to the T-accounts. - Prepare an adjusted trial balance.
•nitv iiul the classihedre the income statement, the statement ol owners cq . • 6'
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Chapter 4 Solutions
ACCOUNTING PRINCIPLES 122 5/16 >C<
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