Melody and Mike Johnson opened M & M Office Cleaning, Inc. on June 1, 2021.

During June, the following transactions were completed:

June 1	Issued 5,000 shares of M & M stock to family and friends for $10,000. Each share has a $1.25 par value.
1	Borrowed $7,500 on a 2-year, 7% note payable.
2	Paid $6,000 to purchase used floor and window cleaning equipment from a company going out of business ($4,800 was for the floor equipment and $1,200 for the window equipment).
2	Paid $210 for June for Internet and phone service.
3	Purchased cleaning supplies for $1,050 on account.
3	Received a Quote for insurance coverage for $9,840 per year. Coverage would run from June 3, 2021, through May 01, 2022. M & M paid $2,460 cash for the first quarter of coverage.
4	Hired 4 employees. Each will be paid $450 per 5-day work week (Monday-Friday). Employees will begin working on Monday, June 7th.
4	Discussions with the insurance agent indicated that providing outside window cleaning services would cost too much to insure. M & M sold the window cleaning equipment for $1,500 cash.
7	Paid $2.30 per share to buy 300 shares of M & M Office Cleaning, Inc common stock from a shareholder who disagreed with management goals. The shares will be held as treasury stock.
10	Paid $500 on amount owed on cleaning supplies.
14	Paid for employees wages for the week of June 7-11.
17	Billed customers $3,500 for cleaning services performed through June 11, 2021.
18	Received $700 from a customer for 4 weeks of cleaning services to begin on June 21, 2021.
21	Paid employees wages for the week of June 14-18
23	Collected $3,000 cash from customers billed on June 17.
24	Billed customers $4,200 for cleaning services performed through June 18th .
25	Paid $210 for Internet and phone services for July.
27	Collected $3,800 from customers billed on June 17 & 24.
28	Declared and paid a cash dividend of $0.15 per share.
28	Paid employees wages for the week of June 21-25
29	Billed customers $3,500 for cleaning services performed through June 25th
30	Received notice that a customer who was billed $140 for services performed June 10th has filed for bankruptcy. M & M Office Cleaning, Inc does not expect to collect any portion of this outstanding receivable. (M & M will follow the GAAP Guidelines for uncollectible accounts.)

Adjustment Data: (Round all calculations to Whole Dollars)

A. Services performed for customers through June 30, 2021, but unbilled and uncollected were $900.

B. M & M Office Cleaning used the allowance method to estimate bad debts. They estimate that 3% of the month-end receivables will not be collected.

C. Record 1 month of depreciation for the floor equipment. Use the straight-line method, an estimated life of 4 years, and $500 salvage value.

D. Record 1 month of insurance expense.

E. An inventory count shows $500 of supplies on hand at June 30th.

F. Record services performed for the customer who paid in advance on June 18th.

G. Accrue for wages owed through June 30, 2021.

H. Accrue for interest expense for one month.

I. M & M estimates a 20% income tax rate. (Hint: Prepare an income statement up to income before taxes to help with the income tax calculation.)

Instructions:

1. Journalize the June transactions.
2. Post to General Ledger accounts.
3. Prepare a Preadjusting Trial Balance as of June 30, 2021.
4. Journalize the adjusting entries. (Round all amounts to whole dollars.)
5. Post the Adjusting Entries to the General Ledger accounts.
6. Prepare an Adjusted Trial Balance as of June 30, 2021.
7. Journalize the Closing Entries.
8. Post the Closing Entries into the General Ledger Accounts.
9. Prepare a Post-Closing Trial Balance.