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In September 1, 2010, the account balances of Rand Equipment Repair, Inc. were as follows. No. Debits No. Credits 101 Cash 14,780 152 Accumulated Depreciation

In September 1, 2010, the account balances of Rand Equipment Repair, Inc. were as follows.

No.

Debits

No.

Credits

101

Cash

14,780

152

Accumulated Depreciation

1,500

111

Accounts Receivable

3,320

201

Accounts Payable

3,400

125

Supplies

2,000

202

Notes Payable

10,000

132

Prepaid Insurance

300

204

Unearned Service Revenue

1,400

151

Store Equipment

15,000

205

Salaries Payable

500

310

Share Capital-Ordinary

16,000

320

Retained Earnings

2,600

35,400

35,400

During September the following summary transactions were completed.

Sept. 8 Paid 1,600 for salaries due employees, of which 500 is for August.

9 Shareholders invested 13,000 cash in the business in exchange for ordinary shares.

10 Received 1,200 cash from customers for services billed in August.

12 Received 3,300 cash for services performed in September.

15 Purchased store equipment on account 5,000.

17 Purchased supplies on account 1,200.

20 Paid 3,400 for accounts payable due.

25 Paid salaries 1,500 for September.

27 Performed services on account and billed customers for services provided 1,600.

28 Declared and paid a 300 cash dividend.

29 Received 950 from customers for future service.

30 Paid rent 2400 for 1 September to 30 November.

Adjustment data consist of:

  1. A count of supplies on September 30, 20X1 indicates that supplies on hand 1,300.
  2. Accrued salaries payable 600.
  3. Depreciation is 200 per month.
  4. Unearned service revenue of 1,700 is earned.
  5. The prepaid insurance is the remaining cost of a fully paid 9-month insurance policy, effective May 1, 20X1.
  6. There is only one note payable which is a 10,000 18%, 9-month note dated September 1, 20X1. (Note: 18% is the annual rate)

Instructions

  1. Enter the September 1 balances in the ledger accounts. (for your own reference)
  2. Journalize the September transactions. Use the following additional accounts: No.133 Prepaid Rent No.211 Interest Payable No.331 Dividends No.400 Service Revenue, No.615 Depreciation Expense, No.617 Interest Expense, No. 618 Insurance Expense, No.631 Supplies Expense, No.726 Salaries Expense, and No.729 Rent Expense.
  3. Post to the ledger accounts. (for your own reference)
  4. Prepare a trial balance at September 30.
  5. Journalize and post adjusting entries. (the posting is for your own reference)
  6. Prepare an adjusted trial balance. (for your own reference)
  7. Prepare an income statement and a retained earnings statement for September and a statement of financial position as at September 30.

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