Assignment #$4$ The Accounting Cycle $-$ Review $-100$ Marks

Comprehensive Question$-$ Becky's Car Detailing Services

Becky Jones opened Becky's Car Detailing Services on April $1,2027.$ In Apr, the following transactions were completed.

Apr$-01$ Invested $$14,000$ cash in the business

$1$ Purchased a used truck for $$26,400,$ paying $$6,400$ cash and signing a note payable for the balance

$1$ Collected $$3,000$ from XYZ for their car detailing needs for Apr, May and June.

$3$ Purchased cleaning supplies on account for $$850$

$5$ Paid $$1,800$ on a one$-$year insurance policy, effective Apr $1$

$12$ Billed customers $$3,800$ for car detailing services

$18$ Paid $$400$ of amount owed on cleaning supplies

$20$ Paid $$1,600$ for employee's salaries

$21$ Collected $$1,400$ from customers billed on Apr $12$

$25$ Billed customers for $$3,000$ for car detailing services

$30$ Paid gas and oil for the month on the truck $$350$

$30$ Withdrew $$1,600$ to pay personal property taxes

Additional Information:

$1.$ Annual payments of $$2,000$ are required on the note.

Required:

$1.$ Journalize and post the Apr transactions. Becky's Car Detailing Services records all prepaid expenses

and unearned revenues as assets and liabilities

$2.$ Prepare an unadjusted trial balance at April $30,2027.$

$3.$ Journalize and post the following adjustments

a$.$ Earned and unbilled fees at Apr $30,2027$ were $$1,500.$

b$.$ The truck has an estimated useful life of four years and no residual value.

c$.$ The insurance policy is effective Apr $1,2027$ and expires on March $31,2028$

d$.$ An inventory count shows $$375$ of cleaning supplies on hand at Apr $30,2027.$

e$.$ At Apr $30.2027,$ $$1,000$ of the fees collected in advance have been earned.

f$.$ Accrued but unpaid employee salaries were $$400.$

g$.$ The note payable has a $6\%$ annual interest rate.

$4.$ Prepare an adjusted trial balance at Apr $30,2027.$

$5.$ Prepare in good form an Income Statement, Statement of Owner$$s Equity and a Classified Balance Sheet

for the month ended Apr $30,2027.$

$6.$ Journalize and post the closing entries.

$7.$ Prepare a post closing trial balance at Apr $30,2027.$

$8.$ Becky's Car Detailing Services has chosen to prepare reversing entries. Prepare necessary reversing entries in May $2027.$

They do not need to be posted.