Module 5 Group Work/Homework

1.

The chart of accounts for Kwick Kleaners as of August 1, 20XX are as follows:

Chart of Accounts

101 Cash

110 Accounts Receivable

114 Cleaning Supplies

115 Cleaning Equipment

116 Accumulated Amortization: Cleaning Equipment

117 Prepaid Insurance

120 Office Equipment

122 Accumulated Amortization Office Equipment

125 Delivery Van

127 Accumulated Amortization Delivery Van

210 Accounts Payable

220 Notes Payable

225 Unearned Revenue

230 Wages Payable

310 Nathaniel Emerson, Capital

320 Nathaniel Emerson, Drawing

350 Income Summary

410 Cleaning Revenue

415 Cleaning Pickup Revenue

601 Rent Expense

610 Advertising Expense

615 Wages Expense

620 Salary Expense

630 Utilities Expense

631 Amortization Expense

635 Interest Expense

August 1 Paid rent for August, $1,500

August 1 Bought a computer for the office; paid $500 cash down and agreed to pay the balance of $700 within 30 days

August 2 Purchased a new washer and dryer for $4,900. Paid $500 down and will pay the remainder in 90 days.

August 3 Purchased a Delivery Van for $15,000; took an interest-bearing note over 3 years

August 4 Placed an ad in the newspaper for $100; the amount is due in 30 days

August 5 received $1,000 in cash from Waterfront Catering, a catering company, for 10 hours of dry cleaning for tablecloths/napkins/chair covers. (Credit to unearned revenue)

August 8 Bought $1100 in cleaning supplies; will pay within 30 days

August 15 Cleaning revenue for the first two weeks is $3,300, of which $1,600 is received in cash

August 17 Received $2,225 in the mail from charge customers

August 18 Paid $700 owed on the computer purchased August 1

August 19 Paid $350 towards the supplies purchased on August 8

August 21 Wrote cheque 520 in the amount of $1,688.20 to pay wages for August 14-20

August 22 Paid 1000 to reduce the amount owned on a note; $425 of the amount is for the interest expense

August 25 Paid the telephone bill, write cheque 521 for $305

August 28 Nathaniel withdrew $1,800 for personal use

Instructions

1. Journalize the transactions in a general journal. Number the first journal page 15.
2. Post the transactions to the general ledger.
3. Prepare a trial balance as of August 31, 20XX
4. Prepare adjusting entries and record in the general journal from the following information
5. The inventory of supplies on August 31, is $875.60 (based on a physical count).
6. An insurance policy was purchased on August 1 at a cost of $1,200 and is for a 12 month

period.

1. The equipment has a useful life of 5 years and a salvage value of $1,000.
2. The delivery van has a useful life of 4 years and a salvage value of $1,240.
3. The computer has a useful life of 3 years and no salvage value.
4. 3 hours of dry cleaning (at $50 per hours) were performed by Nathaniel during August for Waterfront Catering. See August 5 transaction.
5. August 31 falls on a Monday. Record 1 day wage expense at $335.26.
6. Unrecorded Cleaning Pickup Revenue for the last 2 days of August (which customers have not paid or been invoiced) is $1,055.35.
7. Post the adjusting entries to the General Ledger
8. Prepare a new trial balance at August 30

1. Prepare an income statement for the month of August 20XX
2. Prepare a balance sheet on August 31, 20XX detailing the changes in Owners Equity