The Complete Accounting Cycle Without a Work Sheet: Two Months (second month opt

Question

The Complete Accounting Cycle Without a Work Sheet: Two Months (second month optional)

Ledger balances on July 31 (before adjusting entries) for Lutz Repair Service are as follows.

9. Provide a posting reference once the amounts are posted to the appropriate ledgers in next section of this problem.

One month's insurance has expired.

The inventory of unused repair supplies is $1,652.

The estimated depreciation on repair equipment is $280.

GENERAL JOURNAL

5

2014 Jul. 31

  

   

  

                  

           

  

   

  

                  

           

To record one month's expired insurance

   

   

           

   

   

   

Jul. 31

  

   

  

                  

           

  

   

  

                  

           

To record supplies used during July

   

   

           

   

   

   

Jul. 31

  

   

  

                  

           

  

   

  

                  

           

To record depreciation for one month

   

   

           

   

   

   

Using the information above, post the figures to the ledger accounts. If no entry is required, enter "0" or leave the box blank.

10. On your own paper, update the general ledger balances for the adjusting entries prepared above. From the accounts in the ledger, prepare an adjusted trial balance.

Lutz Repair Service

Adjusted Trial Balance

July 31, 2014

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

   

  

  

11a. From the adjusted trial balance, prepare the July income statement.

Lutz Repair Service

Income Statement

For the Month Ended July 31, 2014

Revenue

  

$  

Expenses

  

$  

  

  

  

  

  

  

  

  

  

  

  

$  

11b. From the adjusted trial balance, prepare the July statement of owner’s equity.

Lutz Repair Service

Statement of Owner's Equity

For the Month Ended July 31, 2014

  

$  

  

  

Subtotal

$  

  

  

  

$  

11c. From the adjusted trial balance, prepare the July balance sheet.

Lutz Repair Service

July 31, 2014

  

$  

  

  

  

  

  

$  

  

  

  

  

$  

  

$  

  

$  

  

  

  

$  

Account Balance Accounts Payable 15,224 Accumulated Depreciation-Repair Equipment 280 Advertising Expense 240 B. Lutz, Capital 20,724 B. Lutz, Withdrawals 1,200 Cash 17,324 Prepaid Insurance 1,760 Repair Equipment 16,800 Repair Revenue 6,924 Repair Supplies 4,128 Store Rent Expense 1,700

Explanation / Answer

Journal entries:

Since no information is provided with regard to prepaid insurance i am assuming it that it was prepaid for a year

T- Accounts

Prepaid insurance

Repair supplies

Accumulated depreciation

insurance expense

Repair supplies expense

Depreciation expense - Repair equipment

Adjusted Trial balance

income statment

Owners equity

Balance sheet

Description Debit Credit Insurance $147 To Prepaid insurance $147 Repairs supplies expense $2476 To Repair supplies $2476 Depreciation expense $280 To Accumulated depreciation - repair equipment $280

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