1. Journal Entries - Grindstone Paving Journal Entries Date Accounts Title Debit Credit July 1 Cash $ 8,000 Stone, Capital $ 8,000 Being Cash invested into business) July 2 Cash $ 2,530 Unearned Revenue $ 2,530 (Being Cash received in advance) July 5 Advertising Expense $ 600 Accounts Payable S 600 (Being Advertising Bill received and booked) July 8 Telephone Expense $ 350 Cash S 350 Being Telephone expense paid) July 10 Accounts Receivable $ 4,680 Service Revenue $ 4,680 Being service revenue earned and billed) July 14 Equipment $ 8,200 Cash $ 8,200 (Being Equipment Purchsed) July 20 Cash $ 2,350 Accounts Receivable $ 2,350 (Being Payment received on account) July 22 Accounts Payable $ 1,970 Cash $ 1,970 Being Payment Made on account) July 24 Notes Payable $ 1,300 Cash $ 1,300 Being Principle Payment made) July 28 Salaries Expense $ 2,400 Cash $ 2,400 ( Being Salaries Expense paid) July 30 Stone, Withdrawal $ 2,200 Cash $ 2,200 Being Cash withdrawal made)Grindstone Paving Adjsting Entries Date Accounts Title Debit Credit July 31 Insurance Expense S 100 Prepaid Insurance S 100 Being Insurance Expense incurred July 31 Depreciation Expense $ 450 Accumulated Depreciation 450 Being Depreciation Expense incurred July 31 Unearned Revenue $ 620 Service Revenue S 620 (Being Service revenue Earned July 31 Interest Expense S 75 Interest Payable S 75 Being Interest Expense incurred) July 31 Salaries Expense $ 500 Salaries Payable S 500 Being salaries Expense incurred and accrued) 3. Worksheet - Grindstone Paving Unadjusted Trial Balance Adjustments Adjusted Trial Balance Accounts Title Debit Credit Debit Credit Debit Credit Cash $ 4,040 $ 4,040 Accounts Receivable $ 8,330 $ 8,330 Prepaid Insurance $ 1,800 100 $ 1,700 Equipment $ 63,200 $ 63,200 Accumulated Depreciation S 450 450 Accounts Payable $ 14,430 $ 14,430 Interest Payable S 75 S 75 Unearned Revenue $ 8,730 $ 620 $ 8,110 Salaries Payable S 500 S 500 Notes Payable $ 20,700 $ 20,700 Stone, Capital $ 34,380 $ 34,380 Stone, Withdrawal $ 2,200 $ 2,200 Service Revenue $ 4,680 620 $ 5,300 Advertising Expense S 600 S 600 Telephone Expense S 350 S 350 Salaries Expense $ 2,400 S 500 $ 2,900 Insurance Expense S 100 S 100 Depreciation Expense S 450 450 Interest Expense 75 75 Total $ 82,920 $ 82,920 $ 1,745 $ 1,745 $ 83,945 $ 83,9454. Income Statement - Grindstone Paving Income Statement For the month ended July 31, 2018 Service Revenue $ 5,300 Expenses: Advertising Expense S 600 Telephone Expense S 350 Salaries Expense $ 2,900 Insurance Expense S 100 Depreciation Expense S 450 Interest Expense S 75 Total Expenses $ 4,475 Net Income S 825 5. Statement of Owner's Equity - Grindstone Paving Statement of Owner's Equity For the month ended July 31, 2018 Stone, Capital July 1, 2018 $ 26,380 Add: Issued Stock $ 8,000 Add: Net Income S 825 Stone, Withdrawal $ (2,200) $ (1,375) Stone, Capital July 31, 2018 $ 33,005 6. Balance Sheet - Grindstone Paving Balance Sheet July 31, 2018 Assets Liabilities Cash $ 4,040 Accounts Payable $ 14,430 Accounts Receivable $ 8,330 Interest Payable S 75 Prepaid Insurance $ 1,700 Unearned Revenue $ 8,110 Equipment $ 63,200 Salaries Payable S 500 (-) Accumulated Depreciation (450) Notes Payable $ 20,700 Total Liabilities $ 43,815 Equity Stone, Capital $ 33,005 Total Assets $ 76,820 Total Liabilities and Equity |$ 76,820Chapter 6 The Accounting Cycle: Statements and Closing Entri At the end of July, the following adjustments had to be journalized to properly report the balances of the company's accounts. Jul 31 One month of prepaid insurance worth $100 has been used Jul 31 Monthly depreciation on the equipment was $450 Jul 31 Unearned revenue worth $620 has now been earned Jul 31 Interest of $75 has accrued on the of the note payable Jul 31 Accrued salary expense of $500 for an employee Note: Of the remaining balance of the note payable, $5,000 will be paid within the next year.The Accounting Cycle: Statements and Closing Entries Chapter 6 Case Study CS-1 LO 1 2 3 4 Grindstone Paving provides residential and commercial paving services. Its balance sheet at the end of June 2018 is shown below, along with its chart of accounts. Grindstone Paving Balance Sheet As at June 30, 2018 Assets Liabilities Cash $7,580 Accounts Payable $15,800 Accounts Receivable 6,000 Unearned Revenue 6,200 Prepaid Insurance 1,800 Notes Payable 22,000 Equipment 55,000 Total Liabilities 44,000 Owner's Equity Stone, Capital 26,380 Total Assets $70 380 Total Liabilities and Owner's Equity $70 380 Account Description Account # Account Description Account # ASSETS REVENUE Cash 101 Service Revenue 400 Accounts Receivable 105 Prepaid Insurance 110 EXPENSES Equipment 120 Advertising Expense 500 Accumulated Depreciation-Equipment 125 Depreciation Expense 510 Insurance Expense 515 LIABILITIES Interest Expense 520 Accounts Payable 200 Salaries Expense 545 Interest Payable 205 Telephone Expense 550 Salary Payable 210 Unearned Revenue 215 Notes Payable 220 OWNER'S EQUITY Stone, Capital 300 Stone, Withdrawals 310 Income Summary 315 For the month of July 2018, Grindstone Paving had the following transactions. Jul 1 The owner invested $8,000 cash into the business Jul 2 Received $2,530 cash for work that will be provided in August Jul 5 Received an advertising bill for $600, which will be paid next month Jul 8 Paid the $350 telephone bill with cash Jul 10 Provided $4,680 worth of services to customers who will pay later Jul 14 Purchased equipment with $8,200 cash Jul 20 Received $2,350 in payment from customers paying their accounts Jul 22 Paid $1,970 toward accounts payable Jul 24 Paid $1,300 toward principal of the note payable Jul 28 Paid salary of $2,400 to an employee Jul 30 The owner withdrew $2,200 cash for personal use\fAccount: Cash GL No: 101 Date Description PR DR CR Balance Beginning 7,580 DB 7/1/18 J1 $ 8,000 15,580 DB Account: Accounts Receivable GL No: 105 Date Description PR DR CR Balance Account: Prepaid Insurance GL No: 110 Date Description PR DR CR Balance Account: Equipment GL No: 120 Date Description PR DR CR Balance