We have created a service company called "ZANO Plumbing and Heating Services" which offers repairs and installation for water heaters, water pipes and sewers$/$drains$.$

Here is a series of transactions and subsequent steps based on what we must outline.

$1.$ Transactions:

January $1$: Invested $$100,000$ cash to start the business.

$$ January $5$: Received $$20,000$ cash from a client for plumbing services to be provided.

$$ January $10$: Paid $$4,000$ for office rent for the month.

$$ January $15$: Purchased office supplies for $$1000.$

$$ January $20$: Provided plumbing and heating services to clients on credit, totaling $$16,000.$

$$ January $25$: Received $$10,000$ from clients for services provided earlier.

$$ January $30$: Paid $$6,000$ for salaries to employees.

$($To process and post these transactions to the ledger, let's first understand each transaction and its effect on the accounting equation. The accounting equation is Assets$=$Liabilities$+$Equity.

$2.$ Journalizing the Transactions:

Date Account Debit Credit

Jan $1$ Cash $$100,000$

Jan $1$ Investment $($capital$)$ $$100,000$

Jan $5$ Cash $$20,000$

Accounts Receivable $$20,000$

Jan $10$ Rent Expense $$4,000$

Cash $$4,000$

Jan $15$ Office Supplies $$1000$

Accounts Payable $$1000$

Jan $20$ Accounts Receivable $$16,000$

Unearned Revenue $$16,000$

Jan $25$ Cash $$10,000$

Accounts Receivable $$10,000$

Jan $30$ wages Expense $$6,000$

Cash $$6,000$

$3.$ Posting to the Ledger

Cash Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $1$ Investment $100,000100,000$

Jan $5$ Plumbing services revenue $20,000120,000$

Jan $10$ Rent Expense $4,000116,000$

Jan $15$ Office Supplies $1,000115,000$

Jan $25$ Cash $10,000125,000$

Jan $30$ Salaries Expense $6,000119,000$

Investment $($Capital$)$ Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $1$ Investment $100,000100,000$

Accounts Receivable Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $20$ Plumbing services on credit $16,00016,000$

Jan $25$ Cash $10,00026,000$

Rent Expense Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $10$ Payment for office rent $4,0004,000$

Office Supplies Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $15$ Purchase of office supplies $1,0001,000$

Unearned Revenue Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $20$ Plumbing services on credit $16,00016,000$

Salaries Expense Account:

Date Description Debit $($$$)$ Credit $($$$)$ Balance $($$$)$

Jan $30$ Payment for salaries $6,0006,000$

$4-$ Unadjusted trail balance

Account Debit $($$$)$ Credit $($$$)$

Cash $37,000$

Investment $($Capital$)100,000$

Accounts Receivable $16,000$

Rent Expense $4,000$

Office Supplies $1,000$

Unearned Revenue $16,000$

Salaries Expense $6,000$

$164,000$

Total $180,000180,000$

Missing Credit $=$ Total Debits $-$ Credit Balance

Missing Credit $=$ $$180,000-$ $$16,000=$ $$164,00$

$5-$ Create and journalize adjustments

Adjustments are made to ensure that revenues and expenses are recognized in the period they are earned or incurred, regardless of when cash is exchanged. Let's make the necessary adjustments:

$$ Accrue Revenue for Services Provided:

o Plumbing services provided on credit on January $20$: $$16,000$

o Adjustment: Recognize revenue for services provided but not yet billed.

$$ Recognize Unearned Revenue:

o Unearned revenue for services yet to be provided as of January $20$: $$16,000$

o Adjustment: Recognize the portion of unearned revenue that represents services provided.

$$ Accrue Expenses for Salaries:

o Salaries incurred but not yet paid as of January $30$: $$6,000$

o Adjustment: Recognize expenses for salaries accrued but not yet paid.

$-$ Adjusted entries:

$$ Accrued Revenue:

o Date: January $31$

o Account: Accounts Receivable

o Debit: $$16,000$

o Account: Plumbing Services Revenue

o Credit: $$16,000$

$$ Recognize Unearned Revenue:

o Date: January $31$

o Account: Unearned Revenue

o Debit: $$16,000$

o Account: Plumbing Services Revenue

o Credit: $$16,000$

$$ Accrued Salaries Expense:

o Date: January $31$

o Account: Salaries Expense

o Debit: $$6,000$

o Account: Salaries Payable

o Credit: $$6,000$

$6-$ Prepare adjusted trial balance

Adjusted Trial Balance:

Account Debit $($$$)$ Credit $($$$)$

Cash $37,000$

Accounts Receivable $32,000$

Rent Expense $4,000$

Office Supplies $1,000$

Unearned Revenue $16,000$

Salaries Expense $6,000$

Salaries Payable $6,000$

Plumbing Rev. $36,000$

Total: $97,000$

$7-$ Prepare financial statements

Income Statement:

Revenue Amount $($$$)$

Plumbing Revenue $36,000$

Expenses:

Expense Amount $($$$)$

Rent $4,000$

Salaries $6,000$

Net Income: $$26,000$

Balance Sheet:

Assets Amount $($$$)$ Liabilities Amount $($$$)$

Cash $37,000$ Accounts Payable

Accounts Receivable $32,000$ Salaries Payable $6,000$

Office Supplies $1,000$

Total: $6,000$

Equity:

Investment $($Capital$)$ Amount $($$$)$ Revenue Amount $($$$)$

$100,000$ Plumbing $36,000$

Total: $36,000$

$8-$ Prepare closing entries:

Closing entries are made to reset temporary accounts $($revenue$,$ expense, and dividends$)$ to zero at the end of IS IT CORRECT