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Tidy & Cleaning Services provides cleaning and housekeeping services to both households and businesses. The entity prepares financial statements at the end of each month.

Tidy & Cleaning Services provides cleaning and housekeeping services to both households and businesses. The entity prepares financial statements at the end of each month. The following information is provided in relation to the businesss operations in the month of May 2021.

1. On 1 May 2021, the business signed an advertising agreement, that costs $6,000 for six (6) months plus $1 per each click on their advertisements, with an online website to promote its business for the next six months. The agreement stated $1000 per month will need to be paid in advance at the beginning of each month, $1 per each click on their ads will be paid at the end of the 6th month agreement. A $1000 advance was paid on 1 May.

2. On 2 May, annual rent of $48,000 is paid for the period from 1 May 2021 to 30 April 2022.

3. Cleaning supplies account had a debit balance of $550 at the beginning of the month. On 10 May, the business purchased $3,550 cleanings supplies. At the end of the month, a physical count shows that $850 of supplies are still on hand.

4. On 12 May, Marco Motel paid the business $25,000 in advance to do the cleaning of their guest rooms for the next five months. By the end of May, 20% of the cleaning work has been completed.

5. The business has 10 part-time employees who each earn $180 per day. They all worked 20 days in the month of May. They were paid for 19 days on 30 May, but not for the last day in May for which they have worked.

Required:

  1. Record the transactions occurred in the month of May in the general journal. (5 marks)
  2. Prepare the necessary adjusting entries at the end of the month. (5 marks)

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