In this exercise, you'll be completing the following steps in the Accounting Cycle: 1. Record transactions in the General Journal 2. Post General Journal entries to the General Ledger 3. Prepare an Unadjusted Trial Balance 4. Record end-of-period adjusting entries in the General Journal 5. Post adjusting journal entries to the General Ledger 6. Prepare an Adjusted Trial Balance 7. Prepare Financial Statements: a. Income Statement b. Statement of Retained Earnings c. Statement of Financial Position (Balance Sheet) 8. Record year-ending closing entries in the General Journal 9. Post closing journal entries to the General Ledger 10. Prepare a Post-Closing Trial Balance Montvale Painting Service, Inc. is a residential and commercial painting service started by Tim & Jim Wilson. The following activities took place during the year 2003. Montvale adjusts its books each month and closes its books at the end of the year which ends on December 31. Employees are paid every other Friday. The following are the pay dates during October, November and December: (10/10, 10/24, 11/7, 11/21, 12/5, 12/19.) NB: Among others, MPS Uses the following General Ledger Accounts: Prepaid Rent (A) Residential Painting Revenue (Rev) Commercial Painting Revenue (Rev) Sept 25 Oct 1 Oct 1 Oct 1 Oct 1 Oct 1 Contractor Painting Revenue (Rev) Tim & Jim agree to start Montvale Painting Service, Inc. as a joint venture. Sold 100,000 shares of $2 par value stock to begin financing the business. Signed a one-year lease for office space. Rent is $1,020 per month, and is paid in advance in two-month intervals. Paid first rent payment. Purchased paintbrushes, rollers, paint trays, 60 gallons of paint and other materials from BNC, Inc., a painting wholesale distributor. The total amount of this purchase ($7,050) was placed on the MPS account. Purchased a truck for $30,000 to be used for painting jobs. It is estimated that this vehicle will have a useful life of 5 years. MPS made a $10,000 down-payment, and signed a 10% annual interest, 60-day note for the remainder. Interest on the note is compounded annually. Purchased an automatic paint sprayer at The Home Depot. MPS opted for the newer, more expensive model ($12,000) since it is expected to provide a full 8 years of service. Half of the cost was paid in cash; the remainder was paid on account. Oct 5 Oct 8 Oct 10 Oct 11 Oct 12 Oct 18 Oct 20 Oct 24 Oct 29 Painted the home of Mr. & Mrs. Davidson. Received $9,000 cash in exchange for services provided. Purchased paint from BNC for $2,000 on account. Paid employees' salaries for working the first 10 days of October. Total disbursements were $2500. Signed a contract with Bucco General Contracting to do routine painting jobs. Payment for services rendered is to be collected three times a year: at the beginning of December, April, and August. In an effort to attract new clients, MPS placed an advertisement in a local newspaper to run for the next 2 weeks. The cost of the advertisement was $400, and was paid in cash. Painted the interior and exterior of M&J Deli. Collected $4,200 cash for services rendered. Tim made a $5,500 cash payment for his daughter's college tuition. Pay Day. Paid salaries in the amount of $3,500. Painted Mr. Thomasen's summer home. Since he's a friend of Jim's, the total cost of $8,000 was placed on his account. Oct 31 Other Data Available: Nov 1 Nov 3 Nov 5 Nov 7 Supplies on-hand are estimated at $5,270. Invoices for Bucco Contracting during the month of October amounted to $13,000. Nov 10 Nov 14 Took out a 1-year insurance policy to protect the business from fire and theft. The value of this policy was $3,360, and was paid in cash. Purchased some more paint from BNC. Paid $1000 cash. Made a $5,000 payment toward the open account with BNC. Pay Day. Paid salaries in the amount of $3,500. Collected payment for services previously rendered to Mr. Thomasen. Purchased additional painting supplies from BNC for credit. Total cost was $750. Pay Day. Paid salaries in the amount of $3,500. Nov 21 Nov 30 Other Data Available: Dec 1 Dec 1 Dec 1 Dec 4 Supplies on-hand are estimated at $2,500. Invoices for Bucco Contracting during the month of November amounted to $10,000. Paid rent for December and January. Paid Note previously signed for truck purchase. As per contract, received payment from Bucco Contracting for amounts billed to date Purchased painting supplies from BNC on account for $8.500 Page 2 of 3 I Dec 5 Dec 10 Dec 11 Dec 12 Pay Day. Paid salaries in the amount of $3,500. Signed a Contract with McGraw Hill Publishing Company to paint every room in their corporate offices over the course of the next 2 years. Since this is a large job, payments are made in advance of work being completed. Collected $30,000 in advance payments from McGraw Hill. Declared a $0.05 per share stock dividend to all stockholders of record as of December 1; dividend is to be paid on December 22. Dec 16 Made $10,000 partial payment on BNC account. ED stru ta ya on pa es to entric Octob emini sign) pro good you at ass Com ark Ama Dec 19 Dec 22 Pay Day. Paid salaries in the amount of $3,500. Paid dividend previously declared. Dec 31 Other Data Available: Supplies on-hand are estimated at $3,000. Invoices for Bucco Contracting during the month of December amounted to $6,500. $7,000 worth of painting business was completed for McGraw Hill during the month of December. Do the Following: a. Journalize the activities that took place during October b. Post the journal entries to the Ledger c. Prepare an Unadjusted Trial Balance for October 31 d. Journalize adjusting entries for October e. Post the adjusting journal entries to the Ledger f. Prepare an Adjusted Trial Balance for October 31 g. Journalize the activities that took place during November h. Post the journal entries to the Ledger i. Prepare an Unadjusted Trial Balance for November 30 j. Journalize adjusting entries for November k. Post the adjusting journal entries to the Ledger 1. Prepare an Adjusted Trial Balance for November 30 m. Journalize the activities that took place during December n. Post the journal entries to the Ledger o. Prepare an Unadjusted Trial Balance for December 31 p. Journalize adjusting entries for December q Post the adjusting journal entries to the Ledger r. Prepare an Adjusted Trial Balance for December 31 Prepare an Income Statement for the Year Ended December 31, 2003 t Prepare a Statement of Retained Earnings for the Year Ended December 31, 2003 u. Prepare a Balance Sheet as of December 31, 2003 v. Journalize the necessary closing entries w. Post the closing entries to the Ledger x. Prepare a Post-Closing Trial Balance for December 31 ello folks