Heidi Jara opened Jara\'s Cleaning Service on July 1, 2017. During July, the fol

Question

Heidi Jara opened Jara's Cleaning Service on July 1, 2017. During July, the following transactions were completed July 1 Stockholders invested $19,800 cash in the business in exchange for common stock. I Purchased used truck for $8,800, paying $4,200 cash and the balance on account. 3 Purchased cleaning supplies for $2,100 on account. 5 Paid $1,800 cash on 1-year insurance policy effective July 1. 12 Billed customers $4,090 for cleaning services. 18 Paid $1,420 cash on amount owed on truck and $1,440 on amount owed on deaning supplies. 20 Paid $2,400 cash for employee salaries. 21 Collected $3,440 cash from customers billed on July 12 25 Billed customers $6,010 for cleaning services. 31 Paid $350 for the monthly gasoline bill for the truck, 31 Paid a $5,590 cash dividend. The chart of accounts for Jara's Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No. 633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense

Explanation / Answer

Solution:

Jara's Cleaning Service Income statement For the month ended July 31 Particulars Amount Revenue ($4,090 + $6,010) $10,100.00 Operating Expenses: Insurance Expense $150.00 Salaries Expense $2,400.00 Gasoline Expense $350.00 Total operating expenses $2,900.00 Net Income $7,200.00

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