First Month of Operations The following transactions took place during the first month of operations of Mother Mollys Childcare. On May 1, Molly invests $50,000 to open Mother Mollys Childcare. On May 2, the company spends $11,000 on furniture for use in the childcare facility. On May 2, the company purchases $1,450 of supplies from a local office supply store on account. On May 8, the company establishes a petty cash fund containing $400. On May 12, the company purchases $350 of childrens snacks on account. Mother Mollys Childcare treats this as a Miscellaneous Expense. On May 13, the company purchases advertising in a local newspaper for $505 cash. On May 15, the company determines that revenue for the first half of the month totaled $7,350. Of this amount, $4,000 was paid in cash, while the remainder is owed. On May 15, the company pays its employees. Gross wages for the first half of the month totaled $3,000. Federal income tax withholding totaled $337, state income tax withholding totaled $130, and life insurance premiums withheld totaled $65. In addition, applicable SUTA and FUTA tax rates for employees of Mother Mollys Childcare are 5.4% and 0.6% respectively. No single employee has, to date, reached the Social Security tax, FUTA tax, or SUTA tax threshold. On May 17, the company pays $800 of the previously owed amount from the May 2 purchase of supplies. On May 19, the company receives $1,200 of the previously-owed amount from the revenue recorded on May 15. On May 22, the company receives $2,000 cash from a customer paying for the next two months of childcare services in advance. On May 23, the life insurance premiums withheld on May 15 are remitted to the insurance company. On May 24, the company replenishes its petty cash fund, from which $305 has been spent. The $305 total was comprised of $157 of supplies, $83 of postage, and $65 of miscellaneous expense. On May 25, the company receives $1,325 of the previously-owed amount from the revenue recorded on May 15. On May 29, the company pays $1,620 cash for monthly rent. On May 30, the company pays cash of $220 for its telephone bill. On May 30, the company pays cash of $315 for its utility (electric) bill. On May 30, the company pays its employees. Gross wages for the first half of the month totaled $3,500. Federal income tax withholding totaled $389, state income tax withholding totaled $156, and life insurance premiums withheld totaled $70. In addition, applicable SUTA and FUTA tax rates for employees of Mother Mollys Childcare are 5.4% and 0.6% respectively. No single employee has, to date, reached the Social Security tax, FUTA tax, or SUTA tax threshold. On May 31, the company determines that revenue for the second half of the month totaled $9,200. Of this amount, $7,600 was paid in cash, while the remainder is owed. On May 31, Molly Fabrizio withdraws $4,000 cash for personal use

To complete the comprehensive problem for the first month of operations, perform the following: 1. Record journal entries for each of the transactions of Mother Mollys Childcare during its first month of operations. 2. Post all journal entries to T-Accounts for each account used by Mother Mollys Childcare. 3. Prepare the Unadjusted Trial Balance. 4. Record adjusting journal entries based on the following information: a. A physical count of supplies on May 31 indicates that supplies worth $625 remain in the supply cabinet. b. $750 of the unearned revenue received on May 22 has been earned as of May 31. c. As of May 31, the company has provided $850 of services for which it has not yet billed the client, and which were not previously recorded. d. As of May 31, employees of Mother Mollys Childcare have worked for one day, and earned wages of $200. They will not receive paychecks for this work until the following month.

5. Prepare the Adjusted Trial Balance.

6. Prepare the Income Statement.

7. Prepare the Statement of Owners Equity.

8. Prepare the Balance Sheet.

9. Record the closing entries. 10. Prepare the Post-Closing Trial Balance.