please help with this question! Issued 4,600 shares of Clean Sweep common stock
ID: 2592163 • Letter: P
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Issued 4,600 shares of Clean Sweep common stock for $16,120. Each share has a $1.50 par Borrowed $9,000 on a 2-year, 6% note payable Paid $11,180 to purchase used floor and window cleaning equipment from a company going out of business ($5,120 was for the floor equipment and $6,060 for the window equipment) Feb. 1 1 1 Paid $270 for February Internet and phone services 3 Purchased cleaning supplies for $1,220 on account. 4 Hired 4 employees. Each will be paid $600 per 5-day work week (Monday- Friday). Employees will begin working Monday, February 9 Obtained insurance coverage for $11,040 per year. Coverage runs from February 1, 2017, through January 31, 2018. Karen paid $2,760 cash for the first quarter of coverage Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window cleaning equipment for $4,900 caslh 5 16 Billed customers $4,840 for cleaning services performed through February 13, 2017 17 Received $432 from a customer for 4 weeks of cleaning services to begin February 21, 2017 18 Paid $370 on amount owed on cleaning supplies 20 23 Billed customers $5,330 for cleaning services performed through February 20 24 Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20) 25 Collected $3,100 cash from customers billed on February 16 27 Paid $270 for Internet and phone services for March. 28 Declared and paid a cash dividend of $0.35 per share Paid $3 per share to buy 300 shares of Clean Sweep common stock from a shareholder who disagreed with management goals. The shares will be held as treasury sharesExplanation / Answer
Required journal entries are as prepared below:
Working:
Date Particulars L.F Amount ($) Amount ($) Adjusting entries 2 Allowance for doubtful accounts 180 Account Receivable 180 (For customer bankrupt) 3 Bad debt Expense 528 Allowance for doubtful accounts 528 (For bad debt created) Account Receivable (7,070+4,710-180) Allowance should be 3% of 11600 4 Depreciation Expense 90 Accumulated depreciation-Equipment 90 (For depreciation recorded) (5,120-800)/4 *1/12 5 Insurance Expense (2,760/3) 920 Prepaid insurance 920 6 Supplies Expense (1,220-500) 720 Supplies 720 7 Unearned Service Revenue (432/4) 108 Service Revenue 108 8 Salaries and Wages Expense 2,400 Salaries and Wages payable 2,400 9 Interest Expense (9,000*6%*1/12) 45 Interest Payable 45 10 Income tax expense 0 Income tax payable 0Related Questions
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