Reference no: EM132516805

Question - Lars Linken opened Lars Cleaners on March 1, 2017. During March, the following transactions were completed.

Mar. 1 Issued 10,000 shares of common stock at par value for $15,000 cash.

Mar. 1 Borrowed $6,000 cash by signing a 6-month, 6%, $6,000 note payable. Interest will be paid the ?rst day of each subsequent month.

Mar. 1 Purchased used truck for $8,000 cash.

Mar. 2 Paid $ 1,500 cash to cover rent from March 1 through May 31.

Mar. 3 Paid $2,400 cash on a 6-month insurance policy effective March 1.

Mar. 6 Purchased cleaning supplies for $2,000 on account. (Assume the company records the purchase as supplies inventory).

Mar. 14 Billed customers $3,700 for cleaning services performed.

Mar. 18 Paid $500 on amount owed on cleaning supplies.

Mar. 20 Paid $1,750 cash for employee salaries.

Mar. 21 Collected $1,600 cash from customers billed on March 14.

Mar. 28 Billed customers $4,200 for cleaning services performed.

Mar. 31 Paid $350 for gas and oil used in truck during month (use Maintenance and Repairs Expense).

Mar. 31 Declared and paid a $900 cash dividend.

Required -

a. Prepare journal entries for the March transactions.

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

c. Prepare adjusting entries for the following:

Services performed but unbilled and uncollected at March 3 1 were $200.

Depreciation on equipment for the month was $250.

One-sixth of the insurance expired.

An inventory count shows $280 of cleaning supplies on hand at March 31.

Accrued but unpaid employee salaries were $1,080.

One month of the prepaid rent has expired.

One month of interest expense related to the note payable has accrued and will be paid April 1.

d. Post adjusting entries to the T-accounts.

e. Prepare the income statement and a retained earnings statement for March and a classified balance sheet at March 31.

f. Prepare closing entries and post to the T-accounts.