Comprehensive Accounting Cycle Review 11-02 (Part Level Submission)

Karen Noonan opened Skysong Cleaning Services Inc. on February 1, 2022. During February, the following transactions were completed:

Feb. 1 Issued 4,300 shares of Skysong Cleaning Services common stock for $11,180. Each share has a $1.50 par.1Borrowed $6,880 on a 2-year, 6% note payable.

1Paid $7,760 to purchase used floor and window cleaning equipment from a company

going out of business ($4,150 was for the floor equipment and $3,610 for the window

equipment).

1Paid $190 for February Internet and phone services.

3Purchased cleaning supplies for $840 on account.

4Hired 4 employees. Each will be paid $410 per 5-day work week (Monday- Friday).

Employees will begin working Monday, February 9.

5Obtained insurance coverage for $8,460 per year. Coverage runs from February 1, 2022,

through January 31, 2023. Karen paid $2,115 cash for the first quarter of coverage.

5Discussions with the insurance agent indicated that providing outside window cleaning

services would cost too much to insure. Karen sold the window cleaning equipment for

$3,400 cash.

16Billed customers $3,350 for cleaning services performed through February 13, 2022.

17Received $468 from a customer for 4 weeks of cleaning services to begin February 21, 2022.

(By paying in advance, this customer received 10% off the normal weekly fee of $130.)

18Paid $260 on amount owed on cleaning supplies.20Paid $3 per share to buy 260 shares of Skysong Cleaning Services common stock from a shareholder

who disagreed with management goals. The shares will be held as treasury shares.23Billed customers $3,700 for cleaning services performed through February 20.24Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20).25Collected $2,150 cash from customers billed on February 16.27Paid $190 for Internet and phone services for March.28Declared and paid a cash dividend of $0.30 per share.

(d)

Journalize the following adjustments.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, e.g. 1,527.)

1.Services performed for customers through February 27, 2022, but unbilled and uncollected were $3,270.2.Received notice that a customer who was billed $170 for services performed February 10 has filed

for bankruptcy. Skysong Cleaning Services does not expect to collect any portion of this outstanding receivable.3.Skysong Cleaning Services uses the allowance method to estimate bad debts. Skysong Cleaning Services estimates that 3%

of its month-end receivables will not be collected.4.Record 1 month of depreciation for the floor equipment. Use the straight-line method, an

estimated life of 4 years, and $430 salvage value.5.Record 1 month of insurance expense.6.An inventory count shows $340 of supplies on hand at February 28.7.One week of services were performed for the customer who paid in advance on February 17.8.Accrue for wages owed through February 28, 2022.9.Accrue for interest expense for 1 month.10.Karen estimates a 20% income tax rate. (Hint:Prepare an income statement up to "income before

taxes" to help with the income tax calculation.)

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