ACCOUNTING CLOSING PROCESS Harry Harper LLC opened for business on July 1, 2017.
ID: 2513445 • Letter: A
Question
ACCOUNTING CLOSING PROCESS
Harry Harper LLC opened for business on July 1, 2017. During July the following transactions were completed.
July 1: Harry invested $18,000 cash in the business.
July 1: Purchased used truck for $9,000, paying $2,000 cash and the balance on account.
July 3: Purchased cleaning supplies for $1,800 on account.
July 5: Paid $4,800 cash on two-year insurance policy effective July 1.
July 12: Billed customers $1,500 for cleaning services.
July 18: Paid $2,000 cash on amount owed on truck and $800 on amount owed on cleaning supplies.
July 20: Paid $1,700 cash for employee salaries.
July 21: Collected $400 cash from customers billed on July 12.
July 25: Billed customers $9,000 for cleaning services.
July 31: Paid gas and oil for month on truck $400.
July 31: Withdrew $500 cash for personal use.
The following adjusting entries are required for July 31:
Services provided but unbilled and uncollected at July 31 were $1,000.
Harry invested additional $1,500
Depreciation on equipment for the month was $350.
One month of the insurance expired.
An inventory count shows $400 of cleaning supplies on hand at July 31.
Accrued but unpaid employee salaries were $700.
Instructions
1. Complete the worksheet for the follow column headers:
Trial balance
Adjustments
Adjusted trial balance
Income statement
Balance sheet
Post-closing trial balance
Explanation / Answer
Unadjusted Trial Balance Adjustments Adjusted Trial Balaance Income Summary Post closing Trial Balance Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Cash 6200 1500 7700 7700 Cleaning supplies 1800 1400 400 400 Accounts receivable 10100 1000 11100 11100 Prepaid insurance 4800 200 4600 4600 Truck 9000 9000 9000 Accumulated deprecition-Truck 350 350 350 Accounts payable 6000 6000 6000 Salaries payable 700 700 700 Service revenue 10500 1000 11500 11500 Harry, Capital 18000 1500 19500 25750 Harry, Drawings 500 500 Salaries expense 1700 700 2400 2400 Maintenance expenses 400 400 400 Depreciation expense 350 350 350 Insurance expense 200 200 200 Supplies expense 1400 1400 1400 34500 34500 5150 5150 38050 38050 4750 11500 32800 32800 Net income 6750 INCOME STATEMENT 11500 11500 Service revenue 11500 Expenses: Salaries expense 2400 Maintenance expenses 400 Depreciation expense 350 Insurance expense 200 Supplies expense 1400 4750 Net income 6750 BALANCE SHEET ASSETS: Current Assets: Cash 7700 Cleaning supplies 400 Accounts receivable 11100 Prepaid insurance 4600 23800 Truck 9000 Accumulated deprecition-Truck 350 8650 Total Assets 32450 TOTAL LIABILITIES & OWNERS' EQUITY: Current liabilities: Accounts payable 6000 Salaries payable 700 6700 Owners' Equity: Harry, Capital 25750 Total liabilities & owners' equity 32450 POST CLOSING TRIAL BALANCE Cash 7700 Cleaning supplies 400 Accounts receivable 11100 Prepaid insurance 4600 Truck 9000 Accumulated deprecition-Truck 350 Accounts payable 6000 Salaries payable 700 Harry, Capital 25750 32800 32800
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