Journal:

DATE	ACCOUNT TITLES AND EXPLANATIONS	DEBIT	CREDIT
June 1	Wages Payable Cash	500	500
	Paid $500 of the amount owed from Mays wages.
June 1	Inventory Accounts Payable	15000	15000
	Purchased $15,000 for 5,000 pre-made sandwiches on account.
June 1	Accounts Payable Cash	2000	2000
	Paid $2,000 of its accounts payable from Mays purchase of inventory.
June 5	Cash Accounts Receivable	4000	4000
m	Collected $4,000 of its accounts receivable from May sales.
June 10	Accounts Receivable Sales Revenue COGS Inventory	28000 12000	28000 12000
	Sold 4,000 sandwiches on account. The sales price was $7 per sandwich and the cost was $3 per sandwich.
June 30	Interest Expense Notes Payable Cash	240 8000
			8240
	Paid the interest and principal due on the 3-month, 12%, $8,000 note payable.
June 30	Retained Earnings Dividend Payable Dividend Payable Cash	300 300	300 300
	Declared and paid a $300 cash dividend to its shareholder.
June 30	Wages Exp. Wages Payable	600	600
	Adjusted for $600 of wages owed that will be paid in the first week of July.
June 30	Insurance Exp Prepaid Ins	200	200
	Adjusted for insurance used during the month. Recall that on May 1, $1,200 of insurance was paid in advance for six months of insurance coverage.
June 30	Depreciation exp. Accumulated Depreciation	100	100
	Adjusted for depreciation of its equipment that cost $6,000 and has an estimated useful life of five years and $0 residual value.

General Ledger:

Assets			=	Liabilities			+	Shareholders Equity
Cash				Accounts Payable				Common Stock
8,900		1,860		15,000	2,000			4,000	4,000
Accounts Receivable				Wages Payable				Retained Earnings
4,000	28,000			600		500		6,840		7,140
Inventory				Notes Payable				Sales
2,100		5,100		0		8,000				28000
Prepaid Insurance				Interest Payable				Cost of Goods Sold
1,000		800		160		160		12000
Equipment								Insurance Expense
6,000		6,000						200
Accumulated Depreciation								Depreciation Expense
300		200						100
								Wages Expense
								600
								Interest Expense
								240
								Dividends
										25,700

Adjusted Trial Balance:

Account Title	Debits	Credits
Cash
Accounts Receivable
Inventory
Prepaid Insurance
Equipment
Accumulated Depreciation
Accounts Payable
Wages Payable
Common Stock
Retained Earnings
Sales
Cost of Goods Sold
Insurance Expense
Depreciation Expense
Wages Expense
Interest Expense
Dividends
Total

On-A-Roll, Inc. Income Statement For the Month Ended June 30			On-A-Roll, Inc. Statement of Shareholders' Equity For the Month Ended June 30
Sales Revenue			Beginning Common Stock	$ 4,000
Cost of Goods Sold			Stock Issued
Gross Profit			Ending Common Stock
Wages Expense			Beginning Retained Earnings	$ 7,140
Insurance Expense			Net Income
Depreciation Expense			Dividends
Operating Income			Ending Retained Earnings
Interest Expense			Total Shareholders' Equity
Net Income

When completing the balance sheet, do not forget to include the beginning balances.

On-A-Roll, Inc. Balance Sheet June 30
Cash		Accounts Payable
Accounts Receivable		Wages Payable
Inventory
Prepaid Insurance		Common Stock
Equipment, Net of Accumulated Depreciation		Retained Earnings
Total Assets		Total Liabilities and Shareholders' Equity

Closing Entry: Show the effect of the closing entries on Retained Earnings.

Retained Earnings
	7,140