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 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 1 2 3 SPARKLE CLEANING SERVICE Ledger Accounts For the Month Ended July 31, 2016 4 5 Cash 6 7 No. 101 Balance Explanation Ref. Debit Credit Date 1-Jul 8 9 10 11 12 13 14 15 16 17 Accounts Receivable Ref. No. 112 Balance 18 Date Explanation Debit Credit 19 12-Jul 20 21 22 23 24 25 Supplies Ref. No. 128 Balance 26 Date Explanation Debit Credit 27 3-Jul 28 29 30 Prepaid Insurance Ref. No. 130 Balance Explanation Debit Credit Date 5-Jul Equipment Ref. No. 157 Balance Explanation Debit Credit Date 1-Jul Accumulated Depreciation-Equipment Explanation Ref. Debit No. 158 Balance Date Credit 31-Jul Accounts Payable Ref. No. 201 Balance Explanation Debit Credit Date 1-Jul Salaries and Wages Payable Explanation Ref. No. 212 Balance Debit Credit Date 31-Jul Common Stock Ref. Explanation Debit Credit Date 1-Jul No. 311 Balance 0 0 Retained Earnings Ref. No. 320 Balance Explanation Debit Credit Date 31-Jul Dividends Ref. No. 332 Balance Date Explanation Debit Credit 31-Jul Income Summary Ref. No. 350 Balance Date Explanation Debit Credit 31-Jul Service Revenue Ref. No. 400 Balance Date Explanation Debit Credit 12-Jul Gasoline Expense Ref. No. 633 Balance Date Explanation Debit Credit 31-Jul Supplies Expense Ref. No. 634 Balance Date Explanation Debit Credit 31-Jul Depreciation Expense Ref. No. 711 Balance Date Explanation Debit Credit 31-Jul Insurance Expense Ref. No. 722 Balance Explanation Debit Credit Date 31-Jul No. 726 Salaries and Wages Expense Explanation Ref. Date Debit Credit Balance 20-Jul SPARKLE Cleaning Services worksheet for the month ending July 31, 2016. b) Trail Balance, c) Adjustments SPARKLE Cleaning Services Worksheet For the Month Ending July 31, 2016. Adjustments Adjusted Trial Balance Debit Credit Debit Credit Unadjusted Trial Balance Debit Credit Income Statement Debit Credit Balance Sheet Debit Credit + Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accounts Payable Common Stock Dividends Service Revenue Salaries and Wages Expense Gasoline Expense Rent Expense Miscellaneous Expense Totals Depreciation Expense Accumulated Depreciation Insurance Expense Supplies Expense Salary & Wages Payable Totals Net Income Totals Instructions: (d)(1) Prepare an income statement for the month ended July 31, 2016. SPARKLE CLEANING SERVICE Income Statement For the Month Ended July 31, 2016 (d)(2) Prepare a retained earnings statement for the month ended July 31, 2016. (d)(2) Prepare a retained earnings statement for the month ended July 31, 2016. SPARKLE CLEANING SERVICE Retained Earnings Statement For the Month Ended July 31, 2016 (d)(3) Prepare a classified balance sheet for the month ended July 31, 2016. SPARKLE CLEANING SERVICE Balance Sheet July 31, 2016 Assets Liabilities and Stockholders' Equity Instructions: (g) Prepare a post closing trial balance July 31, 2016. SPARKLE CLEANING SERVICE Post-Closing Trial Balance July 31, 2016