Reference no: EM132379103

Question

D. Roulstone opened Roulstone Roofing Service on April 1. Transactions for April follow.

Apr. 1 Roulstone contributed $11,500 cash to the business in exchange for common stock.

Apr. 2 Paid $6,100 cash for the purchase of a used truck.

Apr. 2 Purchased $6,200 of ladders and other equipment; the company paid $1,000 cash, with the balance due in 30 days.

Apr. 3 Paid $2,880 cash for a two-year premium toward liability insurance.

Apr. 5 Purchased $1,200 of supplies on credit.

Apr. 5 Received an advance of $1,800 cash from a customer for roof repairs to be done during April and May.

Apr. 12 Billed customers $5,500 for roofing services performed.

Apr. 18 Collected $4,900 cash from customers towards their accounts billed on April 12.

Apr. 29 Paid $675 cash for truck fuel used in April.

Apr. 30 Paid $100 cash for April newspaper advertising.

Apr. 30 Paid $4,500 cash for assistants' wages earned.

Apr. 30 Billed customer $4,000 for roofing services performed.

Apr. 30 Declared dividends of $600 and paid $300.

Required:

a. Set up T-accounts for the following accounts: cash, accounts receivable, supplies, prepaid insurance, truck, accumulated depreciation-trucks, equipment, accumulated depreciationequipment, accounts payable, unearned roofing fees, common stock, roofing fees earned, fuel expense, advertising expense, wage expense, insurance expense, supplies expense, depreciation expense - trucks, and depreciation expense - equipment.

b. Record these transactions for April using Journal entries.

c. Post the journal entries from part b. to their T-accounts (reference transactions in T-accounts by date).

d. Prepare journal entries to adjust the following accounts: insurance expense, supplies expense, depreciation expense-trucks, depreciation expense-equipment, and roofing fees earned. Supplies still available on April 30 amount to $200. Depreciation for April was $125 on the truck and $35 on equipment. One-fourth of the roofing fee received on April 5 was earned by April 30.

e. Post the adjusting journal entries from part d. to their T-accounts.

f. Prepare the income statement and the statement of stockholder equity for the month of April and the balance sheet as of April 30th. Assume zero taxes.