Reference no: EM132697018

Question - Bee-Kind Hives provides residential and commercial hive services. Its balance sheet at the end of July 2019 is shown below, along with its chart of accounts.

Bee-Kind Hives Balance Sheet As at July 31, 2019

Assets Liabilities

Cash $5,580 Accounts Payable $12,800

Accounts Receivable 4,000 Unearned Revenue 6,200

Prepaid Insurance 1,800 Bank Loan 20,000

Equipment 52,000 Total Liabilities 39,000

Owner's Equity

Fred, Capital 24,380

Total Assets $63,380 Total Liabilities and Owner's Equity $63,380

Account Description Account # Account Description Account #

ASSETS REVENUE

Cash 101 Sales 400

Accounts Receivable 105

Prepaid Insurance 110 EXPENSES

Equipment 120 Advertising Expense 500

Accum. Depreciation - Equip 125 Depreciation Expense 510

Insurance Expense 515

LIABILITIES Interest Expense 520

Accounts Payable 200 Salaries Expense 545

Interest Payable 205 Telephone Expense 550

Salary Payable 210

Unearned Revenue 215

Bank Loan 220

OWNER'S EQUITY

Fred, Capital 300

Fred, Withdrawals 310

Income Summary 315

For the month of August 2019, Bee-Kind Hives had the following transactions:

Aug 1 The owner invested $4,000 cash into the business

Aug 2 Received an advertising bill for $500, which will be paid next month

Aug 5 Purchased equipment with $6,200 cash

Aug 7 Received $1,530 cash for work that will be provided in August

Aug 8 Paid the $150 telephone bill with cash

Aug 10 Provided $5,680 worth of honey to customers who will pay later

Aug 20 Received $2,000 in payment from customers paying their accounts

Aug 22 Paid $1,500 toward accounts payable

Aug 24 Paid $1,100 toward principal of the bank loan

Aug 28 Paid salary of $2,000 to an employee

Aug 30 The owner withdrew $1,500 cash for personal use

At the end of August, the following adjustments had to be journalized to properly report the balances of the company's accounts.

Aug 31 One month of prepaid insurance worth $100 has been used

Aug 31 Monthly depreciation on the equipment was $400

Aug 31 Unearned revenue worth $420 has now been earned

Aug 31 Interest of $75 has accrued on the bank loan

Aug 31 Accrued salary expense of $500 for an employee

Note: Of the remaining balance of the bank loan, $5,000 will be paid within the next year.

Required -

a) Enter the opening balances from the July 2019 balance sheet into general ledger accounts.

b) Prepare the journal entries for the month of August and post them to the appropriate general ledger accounts.

c) Prepare an unadjusted trial balance in a Trial Balance Worksheet and then complete the month end adjustments and the adjusted trial balance columns of the worksheet.

d) Post the month end adjustments to the appropriate general ledger accounts.

e) Prepare the income statement.

f) Prepare the statement of owner's equity.

g) Prepare the classified balance sheet.

h) Prepare the journal entries to close the books for the month of August 2019 (use the income summary account) and post the journal entries to the appropriate general ledger accounts

i) Prepare the post-closing trial balance.

j) Calculate Working Capital and the Current Ratio for August and explain what this means for Bee-Kind Hives.