B H J N o P R S T U R. A D E G 1 L M SPARKLE CLEANING SERVICE Problem Data For the Month Ended July 31, 2016 Fred Severini opened SPARKLE Cleaning Service on July 1, 2016. During July, the company completed the following transactions. July 1 Stockholders invested cash in the business in exchange for common stock. 1 Purchased a used cleaning truck on account. 3 Purchased cleaning supplies on account. 5 Paid on a one-year insurance policy, effective July 1. 12 Billed customers for cleaning services. 18 Paid on amount owed on truck. 20 Paid employee salaries. 21 Collected from customers billed on July 12. 25 Billed customers for cleaning services. 31 Paid gasoline for the month on the truck. 31 Declared and paid a cash dividend. $15,000 $12,000 $1,800 $2,100 $4,400 $4,000 $2,000 $2,400 $2,200 $500 $600 1 2 3 4 5 The chart of accounts for SPARKLE Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gasoline Expense, No. 634 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense. 1 2 Requirements 3 (a) Journalize and post the July transactions. Tranactions should be posted to both the general journal and the respective ledger account. (b) Prepare a trial balance at July 31 on a worksheet. Trial balance should total $31,400 = (c) Enter the following adjustments on the worksheet, and complete the worksheet. B 1. Unbilled fees for services performed at July 31. $1,300 B 2. Depreciation on equipment for the month was. $225 9 3. One month of insurance has expired. $175 4. An inventory count shows cleaning supplies on hand at July 31. $300 1 5. Accrued but unpaid employee salaries were. $650 2 (d) Prepare the income statement and retained earnings statement for July, and a classified balance sheet at July 31, 2016. Net Income will be $2,850. 8 (e) Journalize and post the adjusting entries. Use page J2 of the general journal. Do not forget to post these entries to the respective ledger account. 4 (f) Journalize and post the closing entries, and complete the closing process. Use page 3 of the general journal. 5 (8) Prepare a post-closing trial balance at July 31. Final balance will be $27,925. 7 4 SPARKLE Cleaning Services General Journal Account Titles and Explanation 5 5 Date J1 Ref Debit Credit 7 3 Jul 1 9 0 1 2 Jul 1 3 4 5 6 Jul 3 7 8 9 20 Jul 5 -2 23 4 Jul 12 25 26 07 28 Jul 18 -9 0 1 2 Jul 20 3 -4 5 6 Jul 21 7 8 9 -0 Jul 25 -1 2 -3 -4 Jul 31 -5 -6 -7 -8 Jul 31 -9 0 5 4 (e) Journalize the adjusting entries from the adjustment information provided in the problem data. General Journal J2 5 Date Account Titles and Explanation Ref Debit Credit 7 B Jul 31 9 o 2 Jul 31 3 4 5 5 Jul 31 7 B Jul 31 1 2 3 4 Jul 31 5 5 7 B (f) Journalize the closing entries from the financial statement columns of the worksheet. General Journal J3 Date Account Titles and Explanation Debit Credit 1 2 Jul 31 3 4 5 5 Jul 31 7 B 3 1 2 3 4 Jul 31 5 6 7 3 Jul 31 10
