Question
Question 1 Lars Linken opened Indigo Cleaners on March 1, 2022. During March, the following transactions were completed. Mar. 1 Issued 11,600 shares of common
Question 1
Lars Linken opened Indigo Cleaners on March 1, 2022. During March, the following transactions were completed.
Mar. 1 | Issued 11,600 shares of common stock for $17,400 cash. | ||
---|---|---|---|
1 | Borrowed $7,200 cash by signing a 6-month, 6%, $7,200 note payable. Interest will be paid the first day of each subsequent month. | ||
1 | Purchased used truck for $9,300 cash. | ||
2 | Paid $1,800 cash to cover rent from March 1 through May 31. | ||
3 | Paid $2,700 cash on a 6-month insurance policy effective March 1. | ||
6 | Purchased cleaning supplies for $2,320 on account. | ||
14 | Billed customers $4,290 for cleaning services performed. | ||
18 | Paid $580 on amount owed on cleaning supplies. | ||
20 | Paid $2,030 cash for employee salaries. | ||
21 | Collected $1,860 cash from customers billed on March 14. | ||
28 | Billed customers $4,870 for cleaning services performed. | ||
31 | Paid $410 for gas and oil used in truck during month (use Maintenance and Repairs Expense). | ||
31 | Declared and paid a $1,040 cash dividend. |
The chart of accounts for Indigo Cleaners contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated DepreciationEquipment, Accounts Payable, Salaries and Wages Payable, Notes Payable, Interest Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Rent Expense, and Interest Expense.
Adjustments:
e) Post adjusting entries to the T-accounts.
Sr. Date Account Titles and Explanation Debit Credit 1. Mar. 31 - Accounts Receivable 230 > Service Revenue 230 2. Mar. 31 - Depreciation Expense 290 Accumulated Depreciation Equipment 290 3. Mar. 31 Insurance Expense 450 Prepaid Insurance 450 4. Mar. 31 - Supplies Expense 2000 Supplies 2000 5. Mar. 31 - Salaries and Wages Expense 1,250 Salaries and Wages Payable 1,250 6. Mar. 31 - Rent Expense 600 Prepaid Rent 600 7. Mar. 31 - Interest Expense 36 Interest Payable 36 Cash 3/1 3/1 3/21 17,400 3/1 7,2003/2 1,860 3/3 9,300 1,800 2,700 580 2,030 410 3/18 3/20 3/31 3/31 8,600 Accounts Receivable 4,290/3/21 1,040 3/31 Bal. 3/14 1,860 3/28 4,870 Supplies 3/6 2,320 Prepaid Rent 3/2 1,800 Prepaid Insurance 3/3 2,700 3/1 Equipment 9,300 9,300 Accumulated Depreciation-Equipment 3/31 Bal. Notes Payable 3/1 7,200 7,200 3/31 Bal. Accounts Payable 3/18 580 3/6 2,320 1,740 3/31 Bal. Salaries and Wages Payable Interest Payable Common Stock 3/1 17,400 17,400 3/31 Bal. Dividends 3/31 1,040 Service Revenue 3/14 4,290 3/28 4,870 Maintenance and Repairs Expense 3/31 410 Supplies Expense Depreciation Expense Insurance Expense Salaries and Wages Expense 3/20 2,030 Rent Expense Interest ExpenseStep by Step Solution
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