Comprehensive Accounting Cycle Review 11-2 (Part Level Submission) Karen Noonan opened Kingbird Inc. on February 1, 2017, During February, the following transactions were completed: Feb. 1 Issued 5,000 shares of Kingbird common stock for $9,620. Each share has a $1.50 par. 1 Borrowed $6,600 on a 2-year, 6% note payable. to purchase used floor and window cleaning equipment from a company going out of business ($3,580 was for the floor equipment and $3,090 for the window equipment). 1 Paid $160 for February Internet and phone services. 3 Purchased cleaning supplies for $730 on account 4 Hired 4 employees. Each will be paid $360 per 5-day work week (Monday- Fridav). Employees will begin working Monday, February 9. 5 Obtained insurance coverage for $8,640 per year. Coverage runs from February 1, 2017, through January 31, 2018. Karen paid $2,160 cash for the first quarter of coverage 5 Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window dleaning equipment fo $2,920 cash. 16 Billed customers $2,890 for cleaning services performed through February 13, 2017 17 Received $432 from a customer for 4 weeks of cleaning services to beain February 21, 2017, 18 Paid $220 on amount owed on cleaning supplies 20 Paid $3 per share to buy 300 shares of Kingbird common stock from a shareholder who disagreed with management goals. The shares will be held as treasury shares. 23 Billed customers $3,180 for cleaning services performed through February 20. 24 Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20) 25 Collected $1,850 cash from customers billed on February 16. 27 Paid $160 for Internet and phone services for March. 28 Declared and paid a cash dividend of $0.35 per share. comprehensive Accounting Cycle Review 11-2 (Part Level Submission) Dournalize 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 he order presented in the problem. Round answers to o decimal places, e.g. 1,527.) 1 Services performed for customers through February 27, 2017, but unbilled and uncollected were $2,810. (2) Received notice that a customer who was billed $230 for services performed February 10 has filed for bankruptcy. Kingbird does not expect to collect any portion of this outstanding receivable. kingbird uses the allowance method to estimate bad debts. Kingbird estimates that 3% of its month-end receivables will not be collected. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $700 salvage value. Record 1 month of insurance expense. An inventory count shows $300 of supplies on hand at February 28. One week of services were performed for the customer who paid in advance on (5) (6) February 17. (8) (9) (10) Accrue for wages owed through February 28, 2017. Accrue for interest expense for 1 month. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to (1) "income before taxes" to help with the income tax calculation.) Credit Debit Account Titles and Explanation 2,810 Accounts Receivable 2,810 Service Revenue Allowance for Doubtful Accounts 230 230 Accounts Receivable 434 Bad Debt Expense Allowance for Doubtful Accounts 434 .Depreciation Expense 60 Accumulated Depreciation-Equipment 60 5. Insurance Expense 720 Prepaid Insurance 720 6. Supplies Expense 430 4. Depreciation Expense 60 Accumulated Depreciation-Equipment 60 5. Insurance Expense 720 Prepaid Insurance 720 6. Supplies Expense 430 Supplies 430 7. Unearned Service Revenue 108 Service Revenue 108 8. Salaries and Wages Expense 1,440 1,440 Salaries and Wages Payable 9. Interest Expense Interest Payable 6. Supplies Expense 430 Supplies 430 7. Unearned Service Revenue 108 108 Service Revenue 8. Salaries and Wages Expense 1,440 Salaries and Wages Payable 1,440 9. Interest Expense Interest Payable 10. Income Tax Expense 532 532 Income Taxes Payable v (e) Post adjusting entries to the T-accounts. (Post entries in the order of journal entries presented above.) Cash 9,6202/1 6,6002/1 2,9202/5 6,670 160 2,160 220 900 2,880 160 1,645 2/5 2/25 1,8502/20 2/24 2/27 2/28 2/28 Bal. 2/16 2/23 6,62 Accounts Receivable 2,8902/25 1,850 3,180 Supplies 2/3 73 Prepaid Insurance 3,180 /23 Supplies /3 730 Prepaid Insurance /5 2,16 Prepaid Expenses /27 16 160 /28 Bal. Allowance for Doubtful Accounts Equipment 6,6702/5 3,090 Accumulated Depreciation-Equipment Equipment 6,6702/5 3,090 Accumulated Depreciation Equipment Accounts Payable 2/18 730 Notes Payable 6,600 Salaries and Wages Payable Interest Payable Interest Payable Income Taxes Payable Unearned Service Revenue 432 Common Stock 7,500 Paid in Capital in Excess of Par 2,120 Cash Dividends 2/28 5 Treasury Stock 1,64 Paid in Capital in Excess of Par 2,120 Cash Dividends 1,645 Treasury Stock 2/28 2/20 900 Service Revenue 2/16 2,890 2/23 3,180 Utilities Expense 16 Salaries and Wages Expense 2/24 2,880 Insurance Expense Utilities Expense 160 Salaries and Wages Expense 2,880 2/24 Insurance Expense Depreciation Expense Bad Debt Expense Supplies Expense Interest Expense Loss on Disposal of Plant Assets 2/5 17 Income Tax Expense