Problem 3-8A Complete the full accounting cycle (LO3-3, 3-4, 3-5, 3-6, 3-7) [The

Question

Problem 3-8A Complete the full accounting cycle (LO3-3, 3-4, 3-5, 3-6, 3-7)

[The following information applies to the questions displayed below.]

The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances:

   

   

The following is a summary of the transactions for the year:

March 12 Provide services to customers, $57,000, of which $20,700 is on account.

May 2 Collect on accounts receivable, $17,700.

June 30 Issue shares of common stock in exchange for $6,000 cash.

August 1 Pay salaries, $25,700 (of which $6,400 is for salaries payable in 2017).

September 25 Pay repairs and maintenance expenses, $12,700.

October 19 Purchase equipment for $7,700 cash.

December 30 Pay $1,100 cash dividends to stockholders.

  Accounts Debits Credits   Cash $ 18,500   Accounts Receivable 7,700   Supplies 3,700   Equipment 13,500      Accumulated Depreciation $ 4,400   Salaries Payable 6,400   Common Stock 23,500   Retained Earnings 9,100        Totals $ 43,400 $ 43,400 Problem 3-8A Complete the full accounting cycle (LO3-3, 3-4, 3-5, 3-6, 3-7) The following information applies to the questions displayed below.] The generel ledger of Red Storm Cleaners at Jenuary 1, 2018, includes the following account balances: Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Salaries Payable Common Stock Retained Earnings Debits Credits S18,500 3,700 13,500 S 4,400 6,400 23,500 9,100 Totals $43,400 $43,400 The following is a summary of the transactions for the year a. March 12 Provide services to customers, $57,000, of which $20,700 is on account. b. May 2 Collect on accounts receivable, $17,700. c. June 30 Issue shares of common stock in exchange for $6,000 cash. d. August 1 Pay salaries, $25,700 (of which $6,400 is for salaries payable in 2017). e. September 25 Pay repairs and maintenance expenses, $12,700. tOctober 19 Purchase equipment for $7,700 cash. g. December 30 Pay $1,100 cash dividends to stockholders. h. Accrued salaries at year-end amounted to $1,100. Depreciation for the year on the equipment is $4,700. Office supplies remaining on hand at the end of the year equal $1,200. Section Break Problem 3-8A Complete the full accounting cycle (LO3-3,3-4, 3-5, 3-6, 3-7)

Explanation / Answer

JOURNAL ENTRY Transaction General Journal Debit Credit a Cash $36,300 (57000-27700) Accounts Receivable $20,700 Service Revenue $57,000 b Cash $17,700 Account Receivable $17,700 c Cash $6,000 Common Stock $6,000 d Salaries expense $19,300 (25700-400) Salaries Payable $6,400 Cash $25,700 e Repair and Maintenance expense $12,700 Cash $12,700 f Equipment $7,700 Cash $7,700 g Dividend $1,100 cash $1,100 h Salaries expense $1,100 Salaries payable $1,100 Depreciation expense $4,700 Accumulated depreciation $4,700 Supplies expense $2,500 (3700-1200) Supplies $2,500 T-ACCOUNTS Cash Accounts Receivable Ref Description Debit Credit Ref Description Debit Credit Beginning Balance $18,500 Beginning Balance $7,700 a Service revenue $36,300 a Service revenue $20,700 b Accounts receivable $17,700 b Cash $17,700 c CommonStock $6,000 Ending Balance $10,700 d Salaries expense $25,700 e Repair and Maintenance expense $12,700 f Equipment $7,700 g Dividend $1,100 Ending Balance $31,300 Supplies Equipment Ref Description Debit Credit Ref Description Debit Credit Beginning Balance $3,700 Beginning Balance $13,500 Supplies expense $2,500 f Cash $7,700 Ending Balance $1,200 Ending Balance $21,200 Accumulated Depreciation Salary Payable Ref Description Debit Credit Ref Description Debit Credit Beginning Balance $4,400 Beginning Balance $6,400 h Depreciation expense $4,700 d Cash $6,400 Ending Balance $9,100 h Salaries expense $1,100 Ending Balance $1,100 Common Stock Retained Earnings Ref Description Debit Credit Ref Description Debit Credit Beginning Balance $23,500 Beginning Balance $9,100 c Cash $6,000 Ending Balance $29,500 Service Revenue Dividend Ref Description Debit Credit Ref Description Debit Credit a Service provided $57,000 g Cash $1,100 Salaries expense R&M expense Ref Description Debit Credit Ref Description Debit Credit d Cash $19,300 e Cash $12,700 h Salaries payable $1,100 Ending Balance $20,400 Depreciation expense Supplies expense Ref Description Debit Credit Ref Description Debit Credit h Accumulated Depreciation $4,700 h Supplies $2,500 TRIAL BALANCE As on December 31, 2018 Debit Credit Cash $31,300 Accounts Receivable $10,700 Supplies $1,200 Equipment $21,200 Accumulated Depreciation $9,100 Salary Payable $1,100 Common Stock $29,500 Retained Earnings $9,100 Service Revenue $57,000 Dividend $1,100 Salaries expense $20,400 R&M expense $12,700 Depreciation expense $4,700 Supplies expense $2,500 TOTAL $105,800 $105,800 INCOME STATEMENT FOR THE YEAR 2018 Service Revenue $57,000 Expenses: Salaries expense $20,400 R&M expense $12,700 Depreciation expense $4,700 Supplies expense $2,500 Total Expenses $40,300 Income $16,700 STATEMENT OF RETAINED EARNINGS Beginning Balance $9,100 Dividend paid ($1,100) Income of the year $16,700 Ending Balance $24,700 BALANCE SHEET As On December 31, 2018 ASSETS: Cash $31,300 Accounts Receivable $10,700 Supplies $1,200 Equipment $21,200 Accumulated Depreciation ($9,100) TotalAssets $55,300 LIABILITIES: Salary Payable $1,100 Total Liabilities $1,100 OWNERS' EQUITY Common Stock $29,500 Retained Earnings $24,700 TotalOwners'Equity $54,200 Total Liabilities & Owners'Equity $55,300

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.