Jim has asked you to prepare financial statements for his first month of operation. The following information relates to the month of May, 2014. (Round all calculations to the nearest whole dollar)

Ace Lawn Care Module 2 Mini Practice Problem Jim has asked you to prepare financial statements for his first month of operation. The following information relates to the month of May, 2014. (Round all calculations to the nearest whole dollar) 1. On May 2, Jim signed a 1 year, 6% note for $3,500 associated with the purchase of a used truck for the business. The interest will be due with the principle of the note. 2. On May 2, Jim purchased a used truck for $7,000 to use for the lawn care business. He estimates a trade-in value of $500 at the end of the estimated five-year life of the truck. 3. On May 5, Jim purchased a lawn mower for $300 and an aerator for $500. He estimates $0 salvage value for both pieces of equipment and an estimated two-year life for both. 4. On May 6, Jim writes a $600 check for a six month insurance policy that expires October 31, 2014. Instructions: 1. Using the chart of accounts provided, and the Excel template provided with this assignment, record the adjustments in the Worksheet, calculate the adjusted trial balance and complete the worksheet. 2. Prepare the Income Statement, Statement of Owner's Capital and Balance Sheet for Ace Lawn Care for May, 2014 3. Prepare journal entries, in good form, to record the May adjusting entries. Explanations are optional. Start with Page 3 of the General Journal for the adjusting entries. 4. Post the journal entries to general ledger accounts. There are already transactions in the ledger for the month, you are adding to those transactions. 5. Prepare and post the closing entries for May, 2014. Start with Page 4 of the General Journal for the closing entries 6. Prepare a post-closing trial balance as of May 31, 2014, for Ace Lawn Care. Classification ASSETS LIABILITIES OWNER'S EQUITY REVENUES EXPENSES Ace Lawn Care Chart of Accounts Account Number Account Name 101 Cash 110 Accounts Receivable 120 Supplies 130 Prepaid Insurance 150 Equipment 155 Accumulated Depreciation - Equipment 201 Accounts Payable 220 Notes Payable 225 Interest Payable 301 Owner's Capital 305 310 401 620 630 640 650 660 670 680 Owner's Drawings Income Summary Lawn Service Revenue Supplies Expense Fuel Expense Repair and Maintenance Expense Advertising Expense Insurance Expense Depreciation Expense Interest Expense WORKSHEET Trial Balance Account Name Debit Cash Accounts Receivable Prepaid Insurance Equipment Notes Payable Owner's Capital Accumulated Depreciation - Equipment Owner's Drawing Lawn Service Revenue Fuel Expense Repair and Maintenance Expense Advertising Expense Interest expense interest payable Depreciation Expense insurance expance 15,575 200 600 7,800 Totals Net Income Totals 26,200 Adjustments Credit Debit Adjusted Trial Balance Credit 7,000 100 7,000 Debit Credit Debit Balance Sheet Credit 8,575 200 500 14,800 3,500 20,000 Debit Credit 8,575 200 500 14,800 3,500 20,000 125 125 1,500 Income Statement 3,500 20,000 125 1,500 2,700 2,700 400 75 50 400 75 50 140 140 140 125 100 26,200 7,365 400 75 50 140 140 125 100 7,365 2,700 26,465 125 100 26,465 890 1,810 2,700 2,700 24,075 2,700 24,075 23,625 450 24,075 INCOME STATEMENT OWNER'S EQUITY STATEMENT BALANCE SHEET GENERAL JOURNAL DATE DESCRIPTION GENERAL JOURNAL DATE 09/27/2016 DESCRIPTION Page POST. REF. DEBIT CREDIT Page POST. REF. DEBIT CREDIT 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 09/27/2016 FA16 09/27/2016 GENERAL LEDGER ACCOUNT Cash ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 1 2 3 6 8 16 23 26 30 31 31 31 ACCOUNT REF. J1 J1 J1 J1 J1 J1 J1 J2 J2 J2 J2 J2 DEBIT CREDIT 20,000 3,500 800 600 50 500 700 75 800 500 400 1,500 Accounts Receivable Debit 20,000 16,500 15,700 15,100 15,050 15,550 16,250 16,175 16,975 17,475 17,075 15,575 ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 16 23 30 31 ACCOUNT REF. J1 J1 J2 J2 DEBIT CREDIT Debit 100 400 200 100 500 700 200 500 Supplies ACCOUNT NO. BALANCE DATE ACCOUNT DESCRIPTION REF. DEBIT CREDIT Prepaid Insurance Debit ACCOUNT NO. BALANCE DATE 2014 May 6 09/27/2016 DESCRIPTION REF. J1 DEBIT 600 CREDIT Debit 600 ACCOUNT Equipment ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 2 3 ACCOUNT REF. J1 J1 DEBIT CREDIT 7,000 800 Debit 7,000 7,800 Accumulated Depreciation - Equipment ACCOUNT NO. BALANCE DATE DESCRIPTION REF. DEBIT CREDIT Debit 2014 ACCOUNT Accounts Payable ACCOUNT NO. BALANCE DATE ACCOUNT DESCRIPTION REF. DEBIT CREDIT Notes Payable Debit ACCOUNT NO. BALANCE DATE 2014 May 2 09/27/2016 DESCRIPTION REF. J1 DEBIT CREDIT 3,500 Debit ACCOUNT Interest Payable ACCOUNT NO. BALANCE DATE DESCRIPTION REF. DEBIT CREDIT Debit 2014 ACCOUNT Owner's Capital ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 1 ACCOUNT REF. DEBIT J1 CREDIT Debit 20,000 Owner's Drawing ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 31 ACCOUNT REF. J2 DEBIT CREDIT 1,500 Debit 1,500 - Income Summary ACCOUNT NO. BALANCE DATE DESCRIPTION REF. DEBIT CREDIT Debit 2014 ACCOUNT Lawn Service Revenue ACCOUNT NO. BALANCE DATE 2014 09/27/2016 DESCRIPTION REF. DEBIT CREDIT Debit May 16 23 30 ACCOUNT J1 J1 J2 600 1,100 1,000 Supplies Expense ACCOUNT NO. BALANCE DATE ACCOUNT DESCRIPTION REF. DEBIT CREDIT Fuel Expense Debit ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 31 ACCOUNT REF. J2 DEBIT CREDIT Debit 400 400 Repair and Maintenance Expense ACCOUNT NO. BALANCE DATE DESCRIPTION 2014 May 26 ACCOUNT REF. DEBIT J2 CREDIT Debit 75 75 Advertising Expense ACCOUNT NO. BALANCE DATE 2014 May 8 09/27/2016 DESCRIPTION REF. J1 DEBIT CREDIT 50 Debit 50 ACCOUNT Insurance Expense ACCOUNT NO. BALANCE DATE DESCRIPTION REF. DEBIT CREDIT Debit 2014 ACCOUNT Depreciation Expense ACCOUNT NO. BALANCE DATE DESCRIPTION REF. DEBIT CREDIT Debit 2014 ACCOUNT Interest Expense ACCOUNT NO. BALANCE DATE 2014 09/27/2016 DESCRIPTION REF. DEBIT CREDIT Debit 101 Credit 110 Credit 120 Credit 130 Credit 09/27/2016 150 Credit 155 Credit 201 Credit 220 Credit 3,500 09/27/2016 225 Credit 301 Credit 20,000 305 Credit 310 Credit 401 Credit 09/27/2016 600 1,700 2,700 620 Credit 630 Credit 640 Credit 650 Credit 09/27/2016 660 Credit 670 Credit 680 Credit 09/27/2016 POST CLOSING TRIAL BALANCE Debit 09/27/2016 Credit