Chapter 4, Problem P4.39BPGB

Completing the accounting cycle from journal entries to post-closing trial balance with an optional worksheet
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; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation—Equipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Wilson, Capital; Wilson, 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, S600.
2. Depreciation forthe month, S240.
3. One month insurance has expired.
4. Accrued Interest Expense, S120.

Requirements

1. Prepare the journal entries, and post to the T-accounts.
2. Prepare an unadjusted trialbalance.
3. Complete the worksheet forthe month ended December 31,2018 (optional).
4. Prepare the adjusting entries, and post to the T-accounts.
5. Prepare an adjusted trial balance.
6. 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 T-accounts.
8. Prepare a post-closing trialbalance.