Michaela McBryan, an experienced auto mechanic, opens his own automotive repair business, Overnight Auto Service ("OAS"). A distinctive feature of Overnight's operations is that all repair work is done at night. This strategy offers customers the convenience of dropping off their cars in the evening and picking them up the following mornings.

McBryan officially started Overnight on January 20, 2019. On that day, he received a charter from the state to begin a small, closely held corporation whose owners consisted of himself and several family members. Capital stock issued to these investors included 8,000 shares at $10 share. During the first month of OAS operations, the following events and transactions occurre.

Jan 20, 2019

McBryan opened a bank account in the name of OAS, into which he deposited the $80,000 received from the issuance of the capital stock.

Jan 21, 2019

OAS purchased land from City of Santa Teresa for $52,000 cash.

Jan 22, 2019

OSA purchased the old garage building from Metropolitan Transit Authority for $36,000. OAS made a cash down payment of $6,000 and issued a 90-day non-interest-bearing note payable for the $30,000 balance owed. The building was not put to use until Feb 1, 2019.

Jan 23, 2019

OAS purchased$6,800 oftools and automotive repair equipment from Snappy Tools on account. The tools and equipments were not put to use until Feb 1, 2019.

Jan 24, 2019

After taking delivery of the new tools and equipment on Jan 23, 2019, OAS found that it had purchased more than it needed. Ace Towing, neighboring business, offered to buy the excess items. Therefore, OAS sold some of its new tools to Ace for $1,800, a price equal to OAS's cost. Ace made no down payment but agreed to pay the amount due within 45 days.

Jan 26, 2019

OSA received $600 from Ace Towing as partial settlement of its accounts receivable from Ace from the sale of tools on Jan 24, 2019.

Jan 27, 2019

OSA made apartialfullpayment of $6,800 on its account payable to Snappy Tools.

Jan 31, 2019

By the last week in January, McBryan had acquired the assets OSA needed to start operating, and he began to provide repair services for customers. Rather than recording each individual sale of repair services, he decided to accumulate them and record them at the end of the month. Sales of repair services for the last week of January were $2,200, all of which was received in cash.

Jan 31, 2019

For January, OSA owed $200 for utilities and $1,200 for wages to his employees, a total of $1,400, which it paid on January 31.

Feb 1, 2019

OSA paid Daily Tribune $360 cash for newspaper advertising to be run during February.

Feb 2, 2019

OSA purchased radio advertising from KRAM to be aired in February. The cost was $470, payable within 30 days.

Feb 4, 2019

OSA purchased various shop supplies (such as grease, solvents, nuts, and bolts) from CAPA Auto Parts; the cost was $1,400, due in 30 days. These supplies are expected to meet OSA's needs for three or four months.

Feb 15, 2019

OSA collected $4,980 cash for repairs made to vehicles of Airport Shuttle Service.

Feb 28, 2019

Billed Harbor Cab Co. $5,400 for maintenance and repair services OSA provided in February. The agreement with Harbor Cab calls for payment to be received by March 10.

Feb 28, 2019

OSA Paid employees' wages earned in February, $4,900.

Feb 28, 2019

OSA recorded $1,600 utility bill for February. The entire amount is due March 15.

Feb 28, 2019

OSA declares and pays a dividend of 40 cents per share to the owners of its 8,000 shares of capital stock - a total of $3,200.

Mar 1, 2019

OSA purchased for $18,000 a one-year insurance policy providing comprehensive liability insurance and insurance against fire and damage to customers' vehicles while in OSA's facilities.

Mar 1, 2019

OSA borrowed $4,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months (on June 1, 2019), along with interest computed at an annual rate of 9 percent.

Mar 1, 2019

Harbor Cab Co. agreed to rent space in OSA's building to provide indoor storage for some of its cabs. The agreed upon rent is $3,000 per month and Harbor paid for the first three months in advance.

Mar 31, 2019

OSA owe its employees $1,950 for the work performed in March.

Mar 31, 2019

The balance in OSA supplies account is $800.

1)Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, if any, on a straight-line basis over their estimated useful lives as follows:

Estimated remaining useful lives

Estimated residual value

Buildings 20 years

Tools and equipment 5 years

Required:

1)Using the following standard account form to represent the general journal, prepare entries in the general journal to record each of the above transactions (Use J1, J2, J3 etc., for the journal page numbers)

2)Using the following standard account form to represent the general ledger accounts, post the transactions recorded in the general journal. Post all company's transactions for the period from Jan 1, 2019 to March 1, 2019. When all transactions for this period have been posted to the general ledger accounts, determine the balance for each account.

3)Prepare an unadjusted trial balance as of March 31, 2019 (Before adjusting entries are posted).

4)Record adjusting entries, which should be posted by the end of March 31, 2019, in the general journal; post these entries to the general ledger (standard account form).

5)Prepare an adjusted trial balance as of March 31, 2019 (After adjusting entries are posted).

6)Prepare the following financial statement based on the adjusted trial balance as of March 31, 2019.

a)Income Statements (Multi-Step Format)

b)Retained Earnings Statement

c)Classified Report-Form Statement of Financial Position

7)Record closing entries in the general journal; post these entries to the general ledger (standard account form) for the period ended March 31, 2019.

8)Prepare a post-closing trial balance as of March 31, 2019.