Comprehensive Accounting Cycle Review 11-2 (Part Level Submission)

Karen Noonan opened Marin Inc. on February 1, 2017. During February, the following transactions were completed:

Feb. 1		Issued 4,000 shares of Marin common stock for $11,180. Each share has a $1.50 par.
1		Borrowed $9,000 on a 2-year, 6% note payable.
1		Paid $7,760 to purchase used floor and window cleaning equipment from a company going out of business ($3,960 was for the floor equipment and $3,800 for the window equipment).
1		Paid $190 for February Internet and phone services.
3		Purchased cleaning supplies for $840 on account.
4		Hired 4 employees. Each will be paid $410 per 5-day work week (Monday Friday). Employees will begin working Monday, February 9.
5		Obtained insurance coverage for $11,040 per year. Coverage runs from February 1, 2017, through January 31, 2018. Karen paid $2,760 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 cleaning equipment for $3,400 cash.
16		Billed customers $3,350 for cleaning services performed through February 13, 2017.
17		Received $504 from a customer for 4 weeks of cleaning services to begin February 21, 2017.
18		Paid $260 on amount owed on cleaning supplies.
20		Paid $3 per share to buy 300 shares of Marin common stock from a shareholder who disagreed with management goals. The shares will be held as treasury shares.
23		Billed customers $3,700 for cleaning services performed through February 20.
24		Paid cash for employees wages for 2 weeks (February 913 and 1620).
25		Collected $2,150 cash from customers billed on February 16.
27		Paid $190 for Internet and phone services for March.
28		Declared and paid a cash dividend of $0.35 per share.

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, 2017, 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. Marin does not expect to collect any portion of this outstanding receivable.
(3)		Marin uses the allowance method to estimate bad debts. Marin 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 $600 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, 2017.
(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.)

Post adjusting entries to the T-accounts. (Post entries in the order of journal entries presented above.)

Date Account Titles and Explanation Debit Credit Feb. 1 Cash 11180 Common Stock 6000 Paid-in Capital in Excess of Par Value-Common St 5180 To record issuance of common stock in excess of par) Feb. 1 Cash 9000 Notes Payable 9000 To record purchase of notes payable) Feb. 1 Equipment 7760 Cash 7760 (To record purchase of equipment) 190 Feb. 1 Utilities Expense 190 Cash (To record payment of internet and phone services) Supplies Feb. 3 840 Accounts Payable 840 Feb. 4 No Entry No Entry Feb. 5 Prepaid Insurance 2760 2760 as (To record payment of insurance) Feb. 5 Cash 3400 Loss on Disposal of Plant Assets 400 Equipment To record sale of equipment) Accounts Receivable 3800 Feb. 16 3350 Service Revenue 3350 Feb. 17 Cash 504 Unearned Service Revenue 504 260 Feb. 18Accounts Payable Cash 260 Feb. 20 Treasury Stock 900 Cash 900 Feb. 23 ACcounts Receivable 3700 Service Revenue 3700 Feb. 24Salaries and Wages Expense 3280 Cash 3280 Feb. 25 Cash 2150 Accounts Receivable 2150 Feb. 27 Prepaid Expenses 190 190 Cash Feb. 28 Cash Dividends 1295 Cash 1295 Cash 7760 9000 2/1 190 2/5 2760 504 2/18v 260 2/25 2150 2/20 900 2/24 v- 2/27 v 2/28 v 3280 190 1295 2/28 Bal. v 9599 Accounts Receivable 3350 2/25 2/16 v 2150 3700 2/23 Supplies 2/3 840 Prepaid Insurance 2/5 2760 Prepaid Expenses 190 2/27 190 2/28 Bal. Equipment 7760 2/5 Accounts Payable 3800 Accounts Payable 840 2/18 v Notes Payable 9000 Unearned Service Revenue 504 Common Stock 6000 Paid in Capital in Excess of Par 5180 Cash Dividends 2/28 v 1295 Treasury Stock 2/20 v 900 Service Revenue 2/16 v 3350 2/23 v 3700 Utilities Expense 190 Salaries and Wages Expense 2/24 v 3280 Loss on Disposal of Plant Assets 2/5 400 Marin Inc. Trial Balance 2/28/17 Debit Credit Cash 9599 4900 Accounts Receivable Supplies Prepaid Insurance Prepaid Expenses Equipment Accounts Payable Notes Payable 840 2760 190 3960 580 9000 Unearned Service Revenue 504 Common Stock 6000 Paid-in Capital in Excess of Par Value-Common Stock 5180 Cash Dividends 1295 Treasury Stock 900 Service Revenue 7050 190 Utilities Expense Salaries and Wages Expense Loss on Disposal of Plant Assets 3280 400 28314 28314 Total No. Account Titles and Explanation Debit Credit 1. Accounts Receivable 3270 Service Revenue 3270 2. Allowance for Doubtful accounts 170 170 Accounts Receivable 3. Bad Debt expense 317 Allowance for Doubtful accounts 317 4. Depreciation Expense Accumulated Depreciation-Equipment 5. Insurance Expense 920 Prepaid Insurance 920 500 6. Supplies Expense Supplies 500 126 7. Unearned Service Revenue Service Revenue 126 8. Salaries and Wages Expense 1640 Salaries and Wages Payable 1640 9. Interest Expense 45 Interest Payable 45 617 10. Income Tax Expense Cash 11,1802/1 9,0002/1 3,4002/5 5042/18 2,1502/20 /24 /27 /28 7,760 190 2,760 260 900 3,280 190 1,295 2/5 2/25 2/28 Bal 9,59 Accounts Receivable 2/16 3,3502/25 2,150 2/23 3,70 Supplies 2/3 84 Prepaid Insurance 2/5 2,76 Prepaid Expenses 2/27 19 2/28 Bal 19 Allowance for Doubtful Accounts Equipment 7,7602/5 3,800 Accumulated Depreciation Equipment Accounts Payable 2602/3 2/18 840 Notes Payable 9,000 Salaries and Wages Payable Interest Payable Income Taxes Payable Unearned Service Revenue 17 504 Common Stock 6,000 Paid in Capital in Excess of Par 5,180 Cash Dividends 1,295 Treasury Stock 2/28 2/20 90 Service Revenue 3,350 /23 3,700 Utilities Expense 19 Salaries and Wages Expense 2/24 3,28 Insurance Expense Depreciation Expense Bad Debt Expense Supplies Expense Interest Expense Loss on Disposal of Plant Assets 2/5 40 Income Tax Expense