As the bookkeeper of Parker’s Plowing, you have been asked to complete the entire accounting cycle for Parker from the following information.
201X
Jan. 1 Parker invested $14,000 cash and $9,000 worth of snow equipment into the plowing company.
1 Paid rent for five months in advance for garage space, $3,500.
4 Purchased office equipment on account from Liliis Corp., $12,600.
6 Purchased snow supplies for $500 cash.
8 Collected $15,000 from plowing local shopping centers.
12 Parker Muroney withdrew $5,000 from the business for his own personal use.
20 Plowed Holiday Co. parking lots, payment not to be received until March, $7,000.
26 Paid salaries to employees, $1,400.
28 Paid Liliis Corp. one-half amount owed for office equipment.
29 Advertising bill received from Carter Co. but will not be paid until March, $600.
30 Paid telephone bill, $200.
Use the following chart of accounts.
Chart of Accounts
Assets Owner’s Equity
111 Cash 311 Parker Muroney, Capital
112 Accounts Receivable 312 Parker Muroney, Withdrawals
114 Prepaid Rent 313 Income Summary
115 Snow Supplies Revenue
121 Office Equipment 411 Plowing Fees
122 Accumulated Depreciation, Office Equipment Expenses
123 Snow Equipment 511 Salaries Expense
124 Accumulated Depreciation Snow Equipment 512 Advertising Expense
Liabilities 513 Telephone Expense
211 Accounts Payable 514 Rent Expense
212 Salaries Payable 515 Snow Supplies Expense
516 Depreciation Expense, Office Equipment
517Depreciation Expense, Snow Equipment
Adjustment Data
a. Snow supplies on hand, $400.
b. Rent expired, $700.
c. Depreciation on office equipment, $210: ($12,600/5 yr. = $2,520/12 mo. = $210).
d. Depreciation on snow equipment, $150: ($9,000/5 yr. = $1,800/12 mo. = $150).
e. Accrued salaries, $380.