On August 1, 2020, the following were the account balances of B&B Repair Services. During August, the

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On August 1, 2020, the following were the account balances of B&B Repair Services.

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During August, the following summary transactions were completed.

Aug. 1 Paid $400 cash for advertising in local newspapers. Advertising flyers will be included with newspapers delivered during August and September.

3 Paid August rent $380.

5 Received $1,200 cash from customers in payment on account.

10 Paid $3,120 for salaries due employees, of which $1,700 is for August and $1,420 is for July salaries payable.

12 Received $2,800 cash for services performed in August.

15 Purchased store equipment on account $2,000.

20 Paid creditors $2,000 of accounts payable due.

22 Purchased supplies on account $800.

25 Paid $2,900 cash for employees' salaries.

27 Billed customers $3,760 for services performed.

29 Received $780 from customers for services to be performed in the future.

Adjustment data:

  1. A count shows supplies on hand of $960.
  2. Accrued but unpaid employees' salaries are $1,540.
  3. Depreciation on equipment for the month is $320.
  4. Services were performed to satisfy $800 of unearned service revenue
  5. One month's worth of advertising services has been received.
  6. One month of interest revenue related to the $4,000 note receivable has accrued. The 4-month note has a 6% annual interest rate. Use the formula from Illustration 3-17 to compute interest.

Instructions

a. Enter the August 1 balances in the ledger accounts. (Use T-accounts.)

b. Journalize the August transactions.

c. Post to the ledger accounts. B&B's chart of accounts includes Prepaid Advertising, Interest Receivable,Service Revenue, Interest Revenue, Advertising Expense, Depreciation Expense, Supplies Expense, Salaries and Wages Expense, and Rent Expense.

d. Prepare a trial balance at August 31.

e. Journalize and post adjusting entries.

f. Prepare an adjusted trial balance.

g. Prepare an income statement and a retained earnings statement for August and a classified balance sheet at August 31.

h. Journalize and post closing entries and complete the closing process.

i. Prepare a post-closing trial balance at August 31.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For  book-img-for-question

Financial and Managerial Accounting

ISBN: 978-1119392132

3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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