Chapter 4, Problem P4.38BPGB

Completing d««„„„u„g cycle 6mm inn.n.l cn.ric, .0 pc.-C.Ing «„ balance with an optional worksheet On December I, Curt Walton began an,auto repair shop, Waltons Quality Automotive
The following transactions occurred during December.

Walton contributed $55,000 cash to the business in exchange for capital. Purchased $9,000 of equipment paying cash.

Dec0 1 1

1 Paid $1,500 for a five-month insurance policy starting on December 1 Paid $16,000 cash to purchase land to be used in operations.

9 Purchased office supplies on account, $2,000.

10 Borrowed $12,000 from the bank for business use. Walton signed a notes payable to the bank in the name of the business. The note is due in five years.

19 Paid $1,700 for advertising expenses.

22 Paid $300 on account.

26 The business received a bill for utilities to be paid in January, $180.

28 Revenues earned during the mon;h included $14,000 cash and $2,600 on account.

31 Paid employees' salaries $3,800 and building rent $1,300. Record as a compound entry.

31 The business received $1,400 for auto screening services to be performed next month.

31 Walton withdrew cash of $4,000.

The business uses the following accounts: Cash; Accounts Receivable: Office Supplies; Prepaid Insurance; Equ.pment; Accumulated Depreciation-Equipment; Land- Accounts I ayablc; Utilities Payable; Interest PavakU> IT in

Walton, Capital; Walton Withdrawal - I ' c"' llcarncd Avenue; Notes Payable; Expense; Rent Expense;;

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Insurance Expense; Interest Expense; and DeprecSn IZ^u^em"" Adjustment data:

1. Office Supplies used during the month, $1,000.
2. Depreciation for the month, $150.
3. One month insurance has expired
4. Accrued Interest Expense, $50.

Requirements

1. Prepare the journal entries, and post to rh, i
r inc *-accounts.
2. Prepare an unadjusted trial balance
3. Complete the worksheet for the inonr I i ,, * "" " ¦ nded I leccmbci H, 2016 (optional)
4. Prepare the adjusting entries, and post to the I' accounts.
5. Prepare an adjusted trial balance
6. Prepare the income statement, the st item, n, , f ,,,., ,..11111 111 1,1 ownei s iqulry and th I fied balance sheet in report form.
7. Prepare the closing entries, and post to the I accounts.
8. Prepare a post-closing trial balance.