P$4-5$B Jannero Pargo opened Pargo's Cleaning Service on July $1,2012.$ During July the follow$-$

ing transactions were completed.

July $1$ Pargo invested $$20,000$ cash in the business.

$1$ Purchased used truck for $$9,000,$ paying $$4,000$ cash and the balance on account.

$3$ Purchased cleaning supplies for $$2,100$ on account.

$5$ Paid $$1,800$ cash on one$-$year insurance policy effective July $1.$

$12$ Billed customers $$4,500$ for cleaning services.

$18$ Paid $$1,500$ cash on amount owed on truck and $$1,400$ on amount owed on cleaning

supplies.

$20$ Paid $$2,500$ cash for employee salaries.

$21$ Collected $$3,400$ cash from customers billed on July $12.$

$25$ Billed customers $$6,000$ for cleaning services.

$31$ Paid gasoline for month on truck $$350.$

$31$ Withdraw $$5,600$ cash for personal use.

The chart of accounts for Pargo's Cleaning Service contains the following accounts: No$.101$

Cash, No$.112$ Accounts Receivable, No$.128$ Supplies, No$.130$ Prepaid Insurance, No$.157$

Equipment, No$.158$ Accumulated Depreciation$-$Equipment, No$.201$ Accounts Payable,

No$.212$ Salaries and Wages Payable, No$.301$ Owner's Capital, No$.306$ Owner's Drawings, No$.$

$350$ Income Summary, No$.400$ Service Revenue, No$.633$ Gasoline Expense, No$.634$ Supplies

Expense, No$.711$ Depreciation Expense, No$.722$ Insurance Expense, and No$.726$ Salaries and

Wages Expense.

Instructions

$($a$)$ Journalize and post the July transactions. Use page J$1$ for the journal and the three$-$column

form of account.

$($b$)$ Prepare a trial balance at July $31$ on a worksheet.

$($c$)$ Enter the following adjustments on the worksheet and complete the worksheet.

$(1)$ Services provided but unbilled and uncollected at July $31$ were $$2,700.$

$(2)$ Depreciation on equipment for the month was $$500.$

$(3)$ One$-$twelfth of the insurance expired.

$(4)$ An inventory count shows $$600$ of cleaning supplies on hand at July $31.$

$(5)$ Accrued but unpaid employee salaries were $$1,000.$

$($d$)$ Prepare the income statement and owner's equity statement for July and a classified balance

sheet at July $31.$

$($e$)$ Journalize and post adjusting entries. Use page J$2$ for the journal.

$($f$)$ Journalize and post closing entries and complete the closing process. Use page J$3$ for the

journal.

$($g$)$ Prepare a post$-$closing trial balance at July $31.$

Complete all steps in

accounting cycle.

$($SO $1,2,3,4,6$

GLS

$($b$)$ Trial balance $$34,700$

$($c$)$ Adjusted trial balance

$$38,900$

$($d$)$ Net income $$7,200$;

Total assets $$26,800$

$($g$)$ Post$-$closing trial balance

$$27,300$