Reference no: EM13506553

Kristin Malone opened Kristin's Maids Cleaning Service on July 1, 2014.

During July, the company completed the following transactions.

July 1 Invested $14,400 cash in the business.

July 1 Purchased a used truck for $10,000, paying $2,000 cash and the balance using a Notes Payable.

July 3 Purchased cleaning supplies for $600 on account.

July 5 Paid $3,600 on a 1-year insurance policy, effective July 1.

July 12 Billed customers $3,800 for cleaning services.

July 18 Paid $2,000 of amount owed on truck, and $400 of amount owed on cleaning supplies (prepare a compound entry.)

July 20 Paid $1,600 for employee salaries.

July 25 Billed customers $1,500 for cleaning services.

July 31 Paid gasoline for truck, $400 and withdrew $600 cash for personal use (prepare a compound entry.)

Acct220 Quiz #2 Part 1 Page 1 of 2

Instructions:

a. Journalize the July transactions.

b. Prepare and record the adjusting journal entries for the following July 31 end of period adjustments:

1. Unbilled fees for services performed at July 31 were $1,300.

2. Depreciation on equipment for the month was $200.

3. One month of the insurance expired.

4. An inventory count shows $100 of cleaning supplies on hand at July 31.

5. Accrued but unpaid employee salaries were $500.

c. Prepare and record the closing journal entries for the month of July.

d. Prepare an income statement for the month of July.