Reference no: EM13847565
1. Bill's Landscaping Service, Inc., a company that designs, installs and cares for landscaping for private homes, engaged in the following transactions in April 2010:
May 1 The company was organized and received $ 350,000 cash from the owners in exchange for capital stock issued.
4 The company bought equipment for cash, $ 102,480.
9 The company bought additional mowing equipment that cost $ 8,620 and agreed to pay for it in
30 days.
15 Cash received for services performed to date was $ 3,940.
16 Amount due from a customer for services performed totaled $ 6,180.
30 Of the receivable (see May 16), $ 4,072 was collected in cash.
30 Miscellaneous operating expenses of $ 6,370 were paid during the month.
30 An order was placed for miscellaneous equipment costing $ 29,800.
a. Prepare a summary of transactions (see Part A of Exhibit 4). Use money columns headed Cash, Accounts Receivable, Equipment, Accounts Payable, Capital Stock, and Retained Earnings. Determine balances after each transaction to show that the basic accounting equation balances.
b. Prepare a balance sheet as of May 31.
2. Analysis of the transactions of the Pete's Paintball Coliseum for June 2014 disclosed the following:
|
1
|
Ticket revenue
|
$192,000
|
|
2
|
Equipment maintenance expense
|
52,000
|
|
3
|
Supplies expense
|
51,000
|
|
4
|
Concession revenue
|
33,540
|
|
5
|
Advertising expense
|
28,170
|
|
6
|
Salaries expense
|
48,000
|
|
7
|
Utilities expense
|
15,900
|
|
8
|
Cash dividends declared and paid
|
12,000
|
Balance sheet amounts at June 30 include the following:
|
1
|
Cash
|
$133,000
|
|
2
|
Land
|
150,000
|
|
3
|
Accounts payable
|
71,000
|
|
4
|
Capital stock
|
110,000
|
|
5
|
Retained earnings as of June 1, 2014
|
88,300
|
a. Prepare an income statement for June 2014.
b. Prepare a statement of retained earnings for June 2014.
c. Prepare a balance sheet as of June 30, 2014.
d. How solvent does this company appear to be?
3. The transactions of Crighton's Warehousing Service Company for March 2014 follow: Mar. 1 The company was organized and issued capital stock for $ 350,000 cash.
2 Paid $ 5,000 as the rent for March on a completely furnished building.
5 Paid cash for delivery trucks, $ 170,000.
6 Paid $ 4,000 as the rent for March on two forklift trucks.
9 Paid $ 2,500 for supplies received and used in March.
12 Warehoused goods for customers who promised to pay $ 29,000 at a later date.
20 Collected cash of $ 4,500 from customers on account (see March 12 entry).
21 Received a bill for $ 1,800 for advertising in the local newspaper in March.
27 Paid cash for gas and oil consumed in March, $ 450.
31 Paid $ 2,600 salaries to employees for March.
31 Received an order for services at $ 15,000. The services will be performed in April.
31 Paid cash dividend, $ 1,000.
Prepare the journal entries required to record these transactions in the general journal of the company.
4. Quick-Clean Cleaners and Laundry Company had the following transactions in August 2014:
Aug. 1 Issued capital stock for cash, $ 180,000.
3 Borrowed $ 30,000 from the bank on a note.
4 Purchased cleaning equipment for $ 28,000 cash.
6 Performed services for customers who promised to pay later, $ 10,000.
7 Paid this month's rent on a building, $ 2,500.
10 Collections were made for the services performed on August 6, $ 3,100.
14 Supplies were purchased on account for use this month, $ 3,500.
17 A bill for $ 600 was received for utilities for this month.
25 Laundry services were performed for customers who paid immediately, $ 28,000.
31 Paid employee salaries, $ 6,300.
31 Paid cash dividend, $ 3,000.
a. Prepare journal entries for these transactions.
b. Post the journal entries to T-accounts. Enter the account number in the Posting Reference column of the journal as you post each amount. Use the following account numbers:
Acct.
No. Account Title
100 Cash
103 Accounts receivable 170 Equipment
200 Accounts payable
201 Notes payable
300 Capital stock
320 Dividends
400 Service revenue
507 Salaries expense
511 Utilities expense
515 Rent expense
518 Supplies expense
c. Prepare a trial balance as of August 31, 2014.