Use the following transactions to complete the first month of the Billy Bob's Daycare. Jan. 1 Billy Bob Caroll organized the daycare as a corporation and invested his savings of $42,000 cash in the business in return for capital stock. Signed a contract to lease a building for $2,100 per month. Billy paid the first six months in advance. Paid cash for a one-year insurance policy $1,500. Purchased supplies on account for $215. 1 1 1 2 Paid cash for playground equipment and furniture. The playground equipment cost $5,000 and the furniture cost $1,300. 3 Purchased groceries on account for $300 (recorded as food expense). Paid employees' cash of $2,000. 14 17 Provided daycare services for 30 kids at $300/kid from January 3rd through today. Collected cash for 28 kids and the parent of the 2 of the kids agreed to pay in the future. Note: Amounts to be received in the future for services already provided are called account receivable. 21 Collected cash in advance of $900 for daycare services that will not be provided until next month (February). Note: Revenue recognition principle states that revenue is recorded when service is provided. No service will be provided until February so service is owed. Collected cash of $600 from the parent that agreed to pay in the future on January 17th Note: Revenue was already recorded on January 17th Paid employees' cash of $2,000 and Billy a cash salary of $3,500 for time worked at the daycare. 22 28 31 Provided daycare services for 30 kids at $300/kid from January 17th through today. Collected cash for all 30 kids. 31 Paid Billy a dividend of $200. ADJUSTMENT INFORMATION at January 31, 20XX 1. Assets have the following residual values and useful lives: Residual Value Furniture Playground Equipment $100 $200 Useful Life 5 10 2. The employees had worked 24 hours at $10/hour since last being paid on January 28th. Remember that the cash account is NEVER used in the adjustment process. 3. A physical count of supplies revealed that $40 remains in supplies. 4. Utility bills that have been received but not paid totaled $220. 5. Don't forget to record the adjusting entries for one month of expired insurance and rent.