More info Dec. 1 Walton contributed $60,000 cash to the business in exchange for capital. 1. Purchased $15,600 of equipment paying cash. 1 Paid $4,000 for a eight-month insurance policy starting on December 1. 9 Paid $25,000 cash to purchase land to be used in operations. Purchased office supplies on account, $1,700. 10 19 2222 Borrowed $24,000 from the bank for business use. Walton signed a note payable to the bank in the name of the business. The note is due in five years. Paid $1,400 for advertising expenses. Paid $1,200 on account. 26 28 The business received a bill for utilities to be paid in January, $280. 31 31 Revenues earned during the month included $17,500 cash and $3,700 on account. Paid employees' salaries $3,300 and building rent $800. Record as a compound entry. Print Done - X Question 1 of More info sactions ell More info a. Office Supplies used during the month, $700. b. Depreciation for the month, $260. c. One month insurance has expired. d. Accrued Interest Expense, $90. Print Done - X - X Cash; Accounts Receivable, Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; Accounts Payable; Utilities Payable Interest Payable; Unearned Revenue; Notes Payable, Walton, Capital, Walton, Withdrawals, Income Summary; Service Revenue, Salaries Expense; Rent Expense; Utilities Expense, Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense Equipment. Print Done 31 31 31 31 Revenues earned during the month included $17,500 cash and $3,700 on account. Paid employees' salaries $3,300 and building rent $800. Record as a compound entry. The business received $1,270 for auto screening services to be performed next month. Walton withdrew cash of $2,500. Requirement 1. Prepare the journal entries, and post to the T-accounts. Begin by preparing the journal entries for the December transactions. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Dec. 1: Walton contributed $60,000 cash to the business in exchange for capital. Date Dec. 1 Accounts and Explanation Debit Credit Dec. 1: Purchased $15,600 of equipment paying cash. Date Dec. 1 Accounts and Explanation Debit Credit Dec. 1: Paid $4,000 for a eight-month insurance policy starting on December 1. Date Dec. 1 Accounts and Explanation Debit Credit Dec. 9: Paid $25,000 cash to purchase land to be used in operations. Date Dec. 9 Accounts and Explanation Dec. 10: Purchased office supplies on account, $1,700. Date Dec. 10 Debit Credit Accounts and Explanation Debit Credit Dec. 19: Borrowed $24,000 from the bank for business use. Walton signed a note payable to the bank in the name of the business. The note is due in five years. Date Accounts and Explanation Debit Credit Dec. 19 Dec. 22: Paid $1,400 for advertising expenses. Date Dec. 22 Accounts and Explanation Debit Credit Dec. 26: Paid $1,200 on account. Date Dec. 26 Accounts and Explanation Debit Credit Dec. 28: The business received a bill for utilities to be paid in January, $280. Date Dec. 28 Accounts and Explanation Debit Credit Dec. 31: Revenues earned during the month included $17,500 cash and $3,700 on account. (Prepare a single compound entry for this transaction.) Accounts and Explanation Date Dec. 31 Debit Credit Dec. 31: Paid employees' salaries $3,300 and building rent $800. Record as a compound entry. Date Dec. 31 Accounts and Explanation Debit Credit Dec. 31: The business received $1,270 for auto screening services to be performed next month. Date Dec. 31 Accounts and Explanation Dec. 31: Walton withdrew cash of $2,500. Date Dec. 31 Debit Credit Accounts and Explanation Debit Credit Post the transactions to the T-accounts. Use the transaction dates as posting references. If posting more than one entry on the same date to a single account, post to that account in the same order as you prepared the entries above. Use a "Bal." posting reference to show the ending balance of each account. For any accounts with a zero balance, select the "Bal." posting reference and enter a "0" on the normal side of the account Cash Accounts Payable Service Revenue Utilities Payable Salaries Expense Accounts Receivable Interest Payable Rent Expense 13 Office Supplies Unearned Revenue Utilities Expense Prepaid Insurance Notes Payable Advertising Expense Equipment Walton, Capital Supplies Expense Accumulated Depr.-Equipment Walton, Withdrawals Insurance Expense Land Interest Expense Depreciation Expense-Equipment Account Title Walton's Quality Automotive Unadjusted Trial Balance December 31, 2016 Balance Debit Credit Requirement 3. Prepare the adjusting entries and post to the T-accounts. Begin by preparing the adjusting entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) a. Office Supplies used during the month, $700. Date Dec. 31 Adj. (a) Accounts and Explanation Debit Credit b. Depreciation for the month, $260. Date Dec. 31 Adj. (b) Accounts and Explanation Debit Credit c. One month insurance has expired. (On December 1, the business paid $4,000 for a 8-month insurance policy starting on December 1.) Date Dec. 31 Adj. (c) Accounts and Explanation Debit Credit d. Accrued Interest Expense, $90. Date Dec. 31 Adj. (d) Accounts and Explanation Debit Credit Post the adjusting entries to the T-accounts. First, enter the unadjusted balances of the accounts ("Bal.") from requirement 2. For accounts with a zero unadjusted balance, do not make an unadjusted balance entry. Then use the adjustment and corresponding letters as posting references-"Adj. (a)". "Adj. (b)", etc. Use a "Bal" posting reference on the last line of each T-account to show the adjusted balance of each account. Cash Accounts Payable Service Revenue Post the adjusting entries to the T-accounts. First, enter the unadjusted balances of the accounts ("Bal.") from requirement 2. For accounts with a zero unadjusted balance, do not make an unadjusted balance entry. Then use the adjustment and corresponding letters as posting references-"Adj. (a)", "Adj. (b)", etc. Use a "Bal." posting reference on the last line of each T-account to show the adjusted balance of each account. Cash Accounts Payable Service Revenue Utilities Payable Salaries Expense Accounts Receivable Interest Payable Rent Expense Accounts Receivable Interest Payable Rent Expense Office Supplies Unearned Revenue Utilities Expense Prepaid Insurance Notes Payable Advertising Expense Equipment Walton, Capital Supplies Expense Accumulated Depr.-Equipment Walton, Withdrawals Insurance Expense Land Interest Expense Requirement 4. Prepare an adjusted trial balance. Walton's Quality Automotive Adjusted Trial Balance December 31, 2016 Account Title Debit Balance Credit Depreciation Expense-Equipment Requirement 5. Complete the worksheet for the month ended December 31, 2016. Walton's Quality Automotive Worksheet (Partial) Account Title Cash Accounts Receivable Office Supplies Prepaid Insurance Equipment Accumulated Depr-Equip. Land B II December 31, 2016 Adjusted Income Balance Trial Balance Statement Sheet Debit Credit Debit Credit Debit Credit Accounts Payable Utilities Payable Interest Payable Unearned Revenue Notes Payable Walton, Capital Walton, Withdrawals Service Revenue Salaries Expense Rent Expense Utilities Expense Advertising Expense Supplies Expense Insurance Expense Interest Expense Requirement 6. Prepare the income statement, the statement of owner's equity, and the unclassified balance sheet in account form. Begin by preparing the income statement. (If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.) Walton's Quality Automotive Income Statement Month Ended December 31, 2016 Walton's Quality Automotive Statement of Owner's Equity Month Ended December 31, 2016 Walton, Capital, December 1, 2016 Walton, Capital, December 31, 2016 Prepare the classified balance sheet in report form as of December 31, 2016. Begin by preparing the asset section of the balance sheet and then prepare the liabilities and owner's equity sections. (If a box is not used in the balance sheet, leave the box empty; do not select a label or enter a zero.) Walton's Quality Automotive Balance Sheet December 31, 2016 Assets Less Liabilities Requirement 7. Prepare the closing entries and post to the T-accounts. Begin by preparing the closing entries. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Start by closing revenues. Date Dec. 31 Clos. (1) Close expenses for the period. Nate Accounts and Explanation Debit Credit Accounts and Fynlanation Debit Credit Close expenses for the period. Date Dec. 31 Clos. (2) Close Income Summary. Date Accounts and Explanation Debit Credit Accounts and Explanation Debit Credit Close income Summary. Date Dec. 31 Clos. (3) Close withdrawals. Date Dec. 31 Clos. (4) Accounts and Explanation Debit Credit Accounts and Explanation Debit Credit Post the closing entries to the T-accounts. First, enter "Bal." and the adjusted balance of each account from requirement 4. Then, use "Clos" and the corresponding number as shown in the journal entry as posting references "Clos. (1)", "Clos (2)", etc. Post any closing entries to the accounts and then calculate the post-closing balance ("Bal") of each account (including those that were not closed). For any accounts with a zero balance after closing, enter a "0" on the normal side of the account. For Income Summary, calculate and enter the balance ("Bal.") before posting the entry to close out the account. Post the entry to close Income Summary account on the same line as you entered the balance prior to closing (the second line) and then show the post-closing balance ("Bal.") on the last (third) line of the account Cash Accounts Payable Service Revenue Utilities Payable Salaries Expense Accounts Receivable Interest Payable Rent Expense Office Supplies Unearned Revenue Utilities Expense Prepaid Insurance Notes Payable Advertising Expense Equipment Walton, Capital Supplies Expense Accumulated Depr.-Equipment Walton, Withdrawals Insurance Expense Land Income Summary Interest Expense Depreciation Expense-Equipment Requirement 8. Prepare a post-closing trial balance. Walton's Quality Automotive Post-Closing Trial Balance December 31, 2016 Account Title Balance Debit Credit