Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dakota Skye opened Clean 4 U, Inc. on March 1, 2023. During March, the following transactions were completed: Mar. 1 Issued 5,000 shares of Clean

Dakota Skye opened Clean 4 U, Inc. on March 1, 2023. During March, the following transactions were completed:

Mar. 1

Issued 5,000 shares of Clean 4 U, Inc. Common Stock for $15,000. Each share has a $1.50 par.

1

Paid $250 to BeamSpeed for internet and phone service for March.

1

Borrowed $8,000 on a 2-year, 7.4% note payable.

2

Paid $9,500 to purchase used floor and window cleaning equipment from a company going out of business ($4,850 was for the floor equipment and $4,650 for the window equipment).

3

Discussions with an insurance agent indicated that providing outside window cleaning services would cost too much to insure. Dakota sold the window cleaning equipment for $4,485 cash.

3

Negotiated insurance coverage at a yearly rate of $12,840. Clean 4 U paid $3,210 cash for three months of coverage.

3

Hired 5 employees. Each will be paid $650 per 5-day work week (Monday-Friday). Employees will begin working on Monday, March 6th .

4

Purchased cleaning supplies for $1,050 on account.

4

Paid $3.50 per share to buy 250 shares of Clean 4 U, Inc Common Stock from a shareholder who disagreed with management goals. The shares will be held as treasury stock.

7

Received $750 from a customer for 4 weeks of cleaning services to begin on March 13, 2023.

7

Paid $500 on amount owed on cleaning supplies.

13

Paid for employees wages for the week of March 6-10.

13

Billed customers $6,400 for cleaning services performed for March 6-10.

15

Purchased additional cleaning supplies for $700.

20

Paid employees wages for the week of March 13-17.

20

Billed customers $5,900 for cleaning services performed the week of March 1317.

21

Collected $4,200 cash from customers billed on March 13.

23

Paid $250 to BeamSpeed for services for April.

27

Paid employees wages for the week of March 20-24

27

Billed customers $6,100 for cleaning services performed the week of March 20-24.

28

Declared and paid a cash dividend of $0.12 per share.

29

Collected $7,250 from customers billed on March 13 & 27.

29

Paid $550 on amount owed for supplies.

30

Received notice that a customer who was billed $200 for services performed March 10th has filed for bankruptcy. Clean 4 U, Inc does not expect to collect any portion of this outstanding receivable. (Clean 4 U will follow the GAAP Guidelines for uncollectible accounts.)

Instructions:

  1. Journalize the March transactions.

  2. Post to ledger accounts. (HintCalculate Balances to this point )

  3. Prepare a Trial Balance as of March 31, 2023.

    Adjustment Data:

A. Services performed for customers through March 31, 2023, but unbilled and uncollected were $5,950.

B. Clean 4 U used the allowance method to estimate bad debts. Clean 4 U estimates that 3% of its month-end receivables will not be collected.

C. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 5 years, and $500 salvage value.

D. Record 1 month of insurance expense.

E. An inventory count shows $650 of supplies on hand on March 31st.

F. Record services performed for the customer who paid in advance on March 7th.

G. Accrue for wages owed through March 31st.

H. Accrue interest expense for one month.

Instructions:

  1. Journalize the adjusting entries. (Round all amounts to whole dollars.)

  2. Post the adjusting entries to the ledger accounts. (HintCalculate new balances where needed )

  3. Prepare an Adjusted Trial Balance as of March 31, 2023.

  4. Journalize the closing entries. (HintUse your Adjusted Trial Balance for accounts and amounts )

  5. Post the Closing Entries to the ledger accounts.

  6. Prepare a Post-Closing Trial Balance on March 31, 2023.


image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Instruction \#s 1,4,&7 Instruction \#s 2,5,&8 \begin{tabular}{|l|l|l|} \hline & Unearned Service Revenue & \\ \hline & & \\ \hline Balance & & \\ \hline & & \\ \hline & Common Stock & \\ \hline & & \\ \hline Balance & & \\ \hline & & \\ \hline & Retained Earnings & \\ \hline & & \\ \hline Balance & & \\ \hline & & \\ \hline & Service Revenue & \\ \hline & & \\ \hline & & \\ \hline Totals & & \\ \hline Balance & & \\ \hline & & \\ \hline & Dividends & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline \end{tabular} Instruction \#9 Post-Closing Trial Balance XX/XX/2023 Instruction \#3 Preadjusting Trial Balance Instruction \#6 Adjusted Trial Balance Instruction \#9 Post-Closing Trial Balance XX/XX/2023

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

HR Self Audits A Strategy For Continuous Improvement

Authors: Wynette Harewood, Marilyn Silverman

1st Edition

B0BQXT8R3P, 979-8843293192

More Books

Students also viewed these Accounting questions