Prepare income statement and a retained earnings statement

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Reference no: EM13179409

Linda Blye opened Cardinal Window Washing Inc. on July 1, 2010. During July the following transactions were completed.July 1 Issued 11,000 shares of common stock for $11,000 cash.July 1 Purchased used truck for $9,000, paying $2,000 cash and the balance on account.July 3 Purchased cleaning supplies for $900 on account. July 5 Paid $1,800 cash on 1-year insurance policy effective July 1. July 12 Billed customers $3,200 for cleaning services.July 18 Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies.July 20 Paid $2,000 cash for employee salaries. July 21 Collected $1,400 cash from customers billed on July 12. July 25 Billed customers $2,500 for cleaning services.July 31 Paid $260 for gas and oil used in the truck during month.July 31 Declared and paid a $600 cash dividend.

Instructions

(a) Journalize the July transactions.

(b) Post to the ledger accounts. (Use T accounts.)

(d) Journalize the following adjustments.

(1) Services provided but unbilled and uncollected at July 31 were $1,700.

(2) Depreciation on equipment for the month was $250.

(3) One-twelfth of the insurance expired.

(4) An inventory count shows $360 of cleaning supplies on hand at July 31.

(5) Accrued but unpaid employee salaries were $400.(e) Post adjusting entries to the T accounts.

(f) Prepare an adjusted trial balance.

(g) Prepare the income statement and a retained earnings statement for July and a classifiedbalance sheet at July 31.

(h) Journalize and post closing entries and complete the closing process.

(i) Prepare a post-closing trial balance at July 31.

Reference no: EM13179409

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