CHAPTER 5 The Accountir As the bookkeeper of Palmer's Plowing, you have been asked to complete st-3 the entire accounting cycle for Palmer from the following information. 201x Palmer invested $9,000 cash and $9,000 worth of snow equipment into the plowing company. Paid 5 months' rent in advance for garage space, $4,000. Purchased office equipment from Lewis Corp. for $9,600 on account. Purchased snow supplies for $600 cash Collected $11,000 from plowing local shopping centers. Palmer Mao withdrew $8,000 from the business for personal use. Plowed Riverton Co. parking lots, payment not to be received until March, $8,000. 2 1 20 26 Paid salaries to employees, $2,100. 28 Paid Lewis Corp. one-half amount owed for office equipment. 29 Advertising bill received from Taft Co. but will not be paid until March, $300. 30 Paid telephone bill, $180. Use the following chart of accounts. Chart of Accounts Assets 111 Cash 112 Accounts Receivable 114 Prepaid Rent 115 Snow Supplies 121 Office Equipment 122 Accumulated Depreciation, Office Equipment 123 Snow Equipment 124 Accumulated Depreciation, Snow Equipment Owner's Equity 311 P. Mao, Capital 312 P. Mao, Withdrawals 313 Income Summary Revenue 411 Plowing Fees Expenses 511 Salaries Expense 512 Advertising Expense 513 Telephone Expense 514 Rent Expense 515 Snow Supplies Expense 516 Depreciation Expense, Office Equipment 517 Depreciation Expense, Snow Equipment Liabilities 211 Accounts Payable 212 Salaries Payable Adjustment Data a. Snow supplies on hand, $100. b. Rent expired, $800. c. Depreciation on office equipment, $160: ($9,600/5 yr= $1,920/12 mo. = $160) Depreciation on snow equipment, $150: mo.- e. Accrued salaries, $340. Financial Report Problerm