Karen Noonan opened Larkspur Cleaning Services Inc. on February 1, 2022. During February, the following completed: Feb. 1 Issued 6,100 shares of Larkspur Cleaning Services common stock for $15,860. Each share has a 1 Borrowed $9,760 on a 2 -year, 6% note payable. 1 Paid $11,000 to purchase used floor and window cleaning equipment from a company going out of business ( $5,880 was for the floor equipment and $5,120 for the window equipment). 1 Paid $270 for February Internet and phone services. 3 Purchased cleaning supplies for $1,200 on account. 4 Hired 4 employees. Each will be paid $590 per 5-day work week (Monday- Friday). Employees will begin working Monday, February 9. 5 Obtained insurance coverage for $12,000 per year. Coverage runs from February 1, 2022, through January 31, 2023. Karen paid $3,000 cash for the first quarter of coverage. 5 Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. Karen sold the window cleaning equipment for $4,820 cash. 16 Billed customers $4,760 for cleaning services performed through February 13, 2022. 17 Received $648 from a customer for 4 weeks of cleaning services to begin February 21, 2022. (By paying in advance, this customer received 10% off the normal weekly fee of $180.) 18 Paid $370 on amount owed on cleaning supplies. 20 Paid $3 per share to buy 370 shares of Larkspur Cleaning Services common stock from a sharel who disagreed with management goals. The shares will be held as treasury shares. 23 Billed customers $5,250 for cleaning services performed through February 20. 24 Paid cash for employees' wages for 2 weeks (February 9-13 and 16-20). 25 Collected $3,050 cash from customers billed on February 16. 27 Paid $270 for Internet and phone services for March. 28 Declared and paid a cash dividend of $0.30 per share. 1. Services performed for customers through February 27,2022 , but unbilled and uncollected were $4,640. 2. Received notice that a customer who was billed $240 for services performed February 10 has filed for bankruptcy. Larkspur Cleaning Services does not expect to collect any portion of this outstanding receivable. 3. Larkspur Cleaning Services uses the allowance method to estimate bad debts. Larkspur Cleaning Services estimates that 3\% of its month-end receivables will not be collected. 4. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $610 salvage value. 5. Record 1 month of insurance expense. 6. An inventory count shows $490 of supplies on hand at February 28 . 7. One week of services were performed for the customer who paid in advance on February 17. 8. Accrue for wages owed through February 28,2022. 9. Accrue for interest expense for 1 month. 10. Karen estimates a 20% income tax rate. (Hint: Prepare an income statement up to income before taxes" to help with the income tax calculation.) Date Account Titles and Explanation Debit Credit Feb. 28 Servlce Revenue Income Summary (To close revenue account) Feb. 28 Depreclatlon Expense Insurance Expense Supplles Expense Salarles and Wages Expense Interest Expense Income Summary Utilities Expense \begin{tabular}{ll|ll} \hline 2/1 & 270 & & \\ \hline 2/28B/V & 270 & & \\ \hline \end{tabular} Salaries and Wages Expense Insurance Expense \begin{tabular}{ll|ll} \hline 2/28 & 1,000 & & \\ \hline 2/28 B.l. & 1000 & & \\ \hline \end{tabular} Depreciation Expense Bad Debt Expense \begin{tabular}{lr|rr|} \hline 2/28 & 581 & & \\ \hline 2/28B/V & 581 & & \\ \hline \end{tabular} Supplies Expense \begin{tabular}{lr} \hline 2/28 & 710 \\ \hline 2/28 Bal. & 710 \\ \hline \end{tabular} Supplies Expense Interest Expense Loss on Disposal of Plant Assets Income Tax Expense \begin{tabular}{ll} \hline 2/28 & 942 \\ \hline 2/28Bal & 942 \\ \hline \end{tabular} eTextbook and Media