PART A

Alamein opened Alamein Cleaning Services (ACS) on July 1, 2017. During July, the following transactions took place:

July 1Alamein invested $20,000 in the business.

July 1ACS purchased a used truck for $12,000, paying $4,000 cash, with the balance on account. The truck is expected to be used for 5 years and after which it will disposed off for $2,000.

July 3ACS purchased cleaning supplies for $2,100 on account.

July 5ACS paid $1,800 cash on 1-year insurance policy effective July 1st.

July 12ACS billed customers $4,500 for cleaning services.

July 18ACS paid $1,500 cash on amount owed on truck and $1,400 on amount owed on cleaning supplies.

July 20ACS paid $2,800 cash for employee salaries.

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

July 25ACS billed customers $6,000 for cleaning services.

July 31ACS paid $350 for the monthly gasoline bill for the truck.

July 31ACS withdrew $5,600 cash for personal use.

Required

1. Prepare journal entries for the above transactions.

2. Post the journal entries into the ledger.

3. Extract a trial balance as at July 31st 2017.

PART B

ACS discovered the following data on July 31st after preparing the trial balance in Part A above:

1. Unbilled and uncollected revenue for services performed at July 31st were $2,700.

2. No provision has been made for depreciation.

3. No adjustment for insurance has been made.

4. Only $600 of cleaning supplies are on hand.

5. Employee salaries of $1,000 have not been paid.

Required:

1. Prepare journal entries for the above adjustments and post them to the ledger.

2. Prepare a worksheet and make the above adjustments in the worksheet.

3. Prepare the following financial statements:

a. The income statement for the period ended July 31st2017.

b. Statement of changes in owners equity for the period ended July 31st 2017.

c. Statement of cash flows for the period ended July 31st2017.

d. Statement of financial position as at July 31st 2017.

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