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

Question

[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, $55,000, of which $20,500 is on account.

May 2 Collect on accounts receivable, $17,500.

June 30 Issue shares of common stock in exchange for $4,000 cash.

August 1 Pay salaries, $25,500 (of which $6,000 is for salaries payable in 2017).

September 25 Pay repairs and maintenance expenses, $12,500.

October 19 Purchase equipment for $7,500 cash.

December 30 Pay $1,200 cash dividends to stockholders.

Accrued salaries at year-end amounted to $1,200. Depreciation for the year on the equipment is $4,500. Office supplies remaining on hand at the end of the year equal $1,100.

Required:

1., 3. 6. & 10. Enter the unadjusted balances from the trial balance and post the adjusting entries to the T-accounts, and post the closing entries to the T-accounts.

  Accounts Debits Credits   Cash $ 17,500   Accounts Receivable 7,500   Supplies 3,500   Equipment 12,500      Accumulated Depreciation $ 4,000   Salaries Payable 6,000   Common Stock 22,500   Retained Earnings 8,500        Totals $ 41,000 $ 41,000 Cash Accounts Receivable Beg. Bal 17,500 Beg. Bal 7,500 End. Bal 17,500 End. Bal 7,500 Supplies 3,500 Equipment Beg. Bal Beg. Bal 12,500 2,400 7,500 End. Bal 1,100 End. Bal 20,000 Accumulated Depreciation Salaries Payable 6,000 1,200 ADJ.d Beg. Bal 4,000 Beg. Bal 6,000 End. Bal 4,000 End. Bal 1,200 Common Stock Retained Earnings Beg. Bal 22,500 Beg. Bal CI. entry CI. entry 8,500 4,000 C 1,200 21,000 End. Bal 26,500 End. Bal 28,300 Service Revenue Dividends

Explanation / Answer

Cash Beg. Balance 17500 25500 d a 34500 12500 e b 17500 7500 f c 4000 1200 g 73500 46700 Ending balance 26800 Accounts receivable Beg. Balance 7500 17500 b a 20500 28000 17500 Ending balance 10500 Supplies Beg. Balance 3500 2400 Adj 3500 2400 Ending balnce 1100 Equipment Beg. Balance 12500 f 7500 20000 0 Ending balance 20000 Accumulated depreciation Beg. Balance 4000 4500 Adj. 0 8500 Ending balance 8500 Salaries payable Beg. Balance 6000 d 6000 1200 Adj. 6000 7200 Ending balance 1200 Common stock Beg. Balance 22500 4000 c 0 26500 Ending balance 26500 Retained earnings Beg. Balance 8500 14900 Income summary Income summary 1200 41300 63500 Ending balance 22200 Service revenue Beg. Balance 0 Income summary 55000 55000 a 55000 55000 Ending balance 0 Dividends Beg. Balance 0 g 1200 1200 Income summary 1200 1200 Ending balance 0 Salaries expense Beg. Balance 0 d 19500 Adj. 1200 20700 Income summary 20700 20700 Ending balance 0 Supplies expense Beg. Balance 0 Adj. 2400 2400 Income summary 2400 2400 Ending balance 0 Depreciation expense Beg. Balance 0 Adj. 4500 4500 Income summary 4500 4500 Ending balnce 0 Repair and maintenance expense Beg. Balance 0 e 12500 12500 income sum 12500 12500 Ending balance 0 Closing trial balance Debit Credit Cash 26800 Accounts receivable 10500 Supplies 1100 Equipment 20000 Accumulated depreciation 8500 Salaries payable 1200 Common stock 26500 retained earnings 22200 Total 58400 58400 Closing entries 1 Service revenue 55000              Income summary 55000 2 Income summary 40100             Salaries expense 20700             Supplies expense 2400              Depreciation expense 4500             Repair and maintenance expense 12500 3 Income summary 14900             Retained earnings 14900 4 Retained earnings 1200              Dividends 1200

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