Waters Landscaping, Inc., completed the following transactions during its first month of operations for January 2012:

a. Gary Waters invested $7,500 cash and a truck valued at $1 5,000 to start Waters Landscaping, Inc. The business issued common stock in exchange for these assets.

b. Purchased $300 of supplies on account.

c. Paid $1,200 for a six-month insurance policy.

d. Performed landscape services for a customer and received $800 cash.

e. Completed a $4,500 landscaping job on account.

f. Paid employee salary, $600.

g. Received $1,100 cash for performing landscaping services.

h. Collected $1,500 in advance for landscaping service to be performed later.

i. Collected $2,500 cash from a customer on account.

j. Purchased fuel for the truck, paying $80 with a company credit card. Credit Accounts Payable.

k. Performed landscaping services on account, $1,600.

l. Paid the current month’s office rent, $750.

m. Paid $50 on account.

n. Paid cash dividends of $500.

Requirements

1. Record each transaction in the general journal. Use the letter corresponding to each transaction as the transaction date. Explanations are not required.

2. Post the transactions that you recorded in Requirement 1 in the following T-accounts.

3. Prepare an unadjusted trial balance as of January 31, 2012.
4. Journalize and post the adjusting journal entries on January 31, 2012 based on the following information:
a. Accrued salaries expense, $600.
b. Depreciation expense, $375.
c. Record the expiration of one month’s insurance.
d. Supplies on hand, $75.
e. Earned 1/3 of the Unearned Service Revenue during January.
5. Prepare an adjusted trial balance as of January 31 , 2012. Use the adjusted trial balance to prepare Waters Landscaping’s income statement and statement of retained earnings for the month ending January 31, 2012, and balance sheet at January 31, 2012. On the income statement list expenses in decreasing order by amount—that is, the largest expense first, the smallest expense last.
6. Journalize and post the closing entries.
7. Prepare a post-closing trial balance at January 31,2012.

Transcribed Image Text:

Cash Accounts Receivable Supplies Prepaid Insurance Truck Accumulated Depreciation Accounts Payable Salaries Payable Unearned Service Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Depreciation Expense Insurance Expense Fuel Expense Rent Expense Supplies Expense