John’s House Painting Company has the following transactions for the year 1. D

Question

John’s House Painting Company has the following transactions for the year

1. December 1 – Issued capital stock for $100,000 to start a house painting business.

2. December 1 - Paid one year insurance premium costing $4,800.

3. December 1 - Paid gas expense $200.

4. December 1 - Purchased equipment costing $4,800 on credit.

5. December 12 - Purchased supplies costing $800 on credit.

6. December 18 - Painted three houses totaling $12,000 and billed customers.

7. December 23 - Painted three rooms and billed customers $500.

8. December 28 - Received $2,000 for houses painted in #6.

9. December 31 - Paid for equipment purchased in #4.

10. December 31 - Received $1,000 for a job to paint a house in January next year.

11. December 31 - Paid a $1,000 dividend.

Required:

3. Prepare a Trial Balance.

4. Prepare adjusting entries in journal format and post to T Accounts.

Supplies on Hand December 31 was $400.

The Equipment is to be depreciated over 48 months starting with December.

Wages owed but not paid on December 31 was $200.

One month of insurance has expired.

Explanation / Answer

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