Chapter 4, Problem P4.33APGA

Completing the accounting cycle from journal entries to post-closing trial balance with an optional worksheet

Learning Objectives 1, 2,3,4,5
Ending Capital $75,095

On December 1, Bob Waldo began an auto repair shop, Waldo's Quality Automotive. The following transactions occurred during December:

Dec1 Wilton contributed JS3.000 with to the business in exchange for capital,

1 Purchased $14.400 of equipment paying cash.

1 Paid $3,600 for a twelve−month insurance policy starting on December 1.
9 Paid $15,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $2,200.
19 Borrowed $24,000 from the bank for business use.Wilson signed a notepayable to the ban k in the name of the business. The note is due in five years.
22 Paid $2,000 for advertising expenses
26 Paid $1,000 on account.
28 The business received a bill for utilities to be paid in January. $260.
91 Revenues earned during the month included $18,500 cash and $5,800 on account.
31Paid employees' salaries $3,900 and building rent $800. Record as a compound entry.
3t The business received $1,380 for auto screening services to be performed neat month.
31 Wilson withdrew cash of $5,000,

The business uses the following accounts: Cash; Accounts Receivable: Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation—Equipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Waldo, Capital; Waldo, 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:

1. Office Supplies used during the month, $1,8OO.
2. Depreciation for the month, $200.
3. Onemonthinsurance has expired.
4. Accrued Interest Expense,$75.

Requirements

1. Prepare the journal entries, and post to the T-accounts.
2. Prepare an unadjusted trial balance.
3. Complete the worksheet forthe month ended December 31,2018(optional).

A Prepare the adjusting entries, and post to the “-accounts.

5. Prepare an adjusted trial balance.
c. Prepare the income statement, the statement of owner's equity, and the classified balance sheet in report form.
7. Prepare the closing entries, and post to the “-accounts.
B. Prepare a post-closing trial balance.