COMPREHENSIVE PROBLEM CHAPTERS 2 TO 4 CP4 Kristin Malone ope

COMPREHENSIVE PROBLEM: CHAPTERS 2 TO 4 CP4 Kristin Malone opened Kristin\'s Maids Cleaning Service on July 1, 2017. During July, the company completed the following transactions. July1 Stockholders invested $14,000 cash in the business in exchange for common stock. 1 3 5 12 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account. Purchased cleaning supplies for $800 on account. Paid $1,800 on a 1-year insurance policy, effective July 1. Billed customers $3,800 for cleaning services.

Solution

Journal Entries July 31st Date Particular Amount (DR) Amount(Cr) 1-Jul Cash $         14,000.00      To Common Stock $                        14,000.00 (Being amount contributed by Lougee in exchange of common stock 1-Jul Used Truck $         10,000.00    To Cash $                          3,000.00    To Accounts Payable $                          7,000.00 (Being amount paid for purchase of used truck) 3-Jul Supplies $               800.00       To Accounts Payable $                              800.00 (Being amount of Purchased of Supplies on account) 1-Jul Prepaid Insurance $            1,800.00      To Cash $                          1,800.00 (Being amount paid for 1 years insurance) 12-Jul Accounts Receivable $            3,800.00       To Service Revenue $                          3,800.00 (Being amount due for cleaning service performed ) 18-Jul Accounts Payable $            1,400.00     To Cash $                          1,400.00 (Being amount paid to Creditors) 20-Jul Salaries $            1,600.00       To Cash $                          1,600.00 (Being amount paid for salaries) 21-Jul Cash $            1,400.00     To Accounts receivable $                          1,400.00 (Being amount received from customers) 25-Jul Accounts Receivable $            1,500.00       To Service Revenue $                          1,500.00 (Being amount due for cleaning service performed ) 31-Jul Gasoline Expenses $               400.00      To Cash $                              400.00 (Being amount paid for gasoline expenses) 31-Jul Dividend $               600.00     To Cash $                              600.00 (Being amount paid for dividend) Kristin Malone Adjusted Journal Entries Accounts Title Debit Credit 31-Jul Unbilled Accounts Receivable $            1,300.00      To Service Revenue $                          1,300.00 (Being amount of unbilled fees for service performed at July 31st) 31-Jul Depreciation $               200.00       To Accumulted Depreciation $                              200.00 (Being amount of Depreciation on Equipment) 31-Jul Insurance=($1800*1/12) $               150.00      To Prepaid Insurance $                              150.00 (Being amount of Insurance Expenses) 31-Jul Cleaning Supplies Expenses=($800-$100) $               700.00       To Cleaning Supplies $                              700.00 (Being amount of Supplies Expenses 31-Jul Salary $               500.00     To salay Payable $                              500.00 (Being amount of salary outstanding) T-Accounts Cash A/c Particular Amount   Particular Amount To Common Stock $         14,000.00 By Prepaid Insurance $      1,800.00 To Accounts Receivable $            1,400.00 By Used Truck $      3,000.00 ByAccounts Payable $      1,400.00 By Salary Payable $      1,600.00 By Gasoline $         400.00 By dividend $         600.00 By Bal C/d $      6,600.00 Total $         15,400.00 $   15,400.00 Common Stock Particular Amount   Particular Amount To Balance C/d $         14,000.00 By Cash $   14,000.00 Total $         14,000.00 Total $   14,000.00 Unbilled Accounts Receivable Particular Amount   Particular Amount To Service Revenue $            1,300.00 By Balance c/d $      1,300.00 Total $            1,300.00 Total $      1,300.00 Service Revenue Particular Amount   Particular Amount To B alance C/d $            6,600.00 By Accounts Receivable $      3,800.00 By Accounts Receivable $      1,500.00 By Unbilled service revenue $      1,300.00 Total $            6,600.00 Total $      6,600.00 Accounts Payable Particular Amount   Particular Amount To Cash $            1,400.00 By Used Truck $      7,000.00 To Balance C/d $            6,400.00 By Supplies $         800.00 Total $            7,800.00 Total $      7,800.00 Used Truck Particular Amount   Particular Amount To Cash $            3,000.00 By Balance C/d $   10,000.00 To Accounts Payable $            7,000.00 Total $         10,000.00 Total $   10,000.00 Accumulated Depreciation-Truck Particular Amount   Particular Amount To Balance C/d $               200.00 By Depreciation $         200.00 Total $               200.00 Total $         200.00 Depreciation Particular Amount   Particular Amount To Balance C/d $               200.00 By Depreciation $         200.00 Total $               200.00 Total $         200.00 Cleaning Supplies Particular Amount   Particular Amount To Accounts Payable $               800.00 By Supplies Expenses $         700.00 By Balance C/d $         100.00 Total $               800.00 Total $         800.00 Cleaning Supplies Expenses Particular Amount   Particular Amount To Supplies $               700.00 By Balance C/d $         700.00 Total $               700.00 Total $         700.00 Salary Expenses Particular Amount   Particular Amount To Cash $            1,600.00 By Balance C/d $      2,100.00 To Accounts Payable $               500.00 Total $            2,100.00 Total $      2,100.00 Prepaid Insurance Particular Amount   Particular Amount To Cash $            1,800.00 By Insurance $         150.00 By Balance C/d $      1,650.00 Total $            1,800.00 Total $      1,800.00 Gasoline Expenses   Particular Amount   Particular Amount To Cash $               400.00 By Balance C/d $         400.00 Total $               400.00 Total $         400.00 Dividend A/c Particular Amount   Particular Amount To Cash $               600.00 By Balance C/d $         600.00 Total $               600.00 Total $         600.00 Accounts Receivable Particular Amount   Particular Amount To Service Revenue $            3,800.00 By Cash $      1,400.00 To Service Revenue $            1,500.00 By Balance C/d $      3,900.00 Total $            5,300.00 Total $      5,300.00 Salary Payable Particular Amount   Particular Amount To Balance C/d $               500.00 By Salary $         500.00 Total $               500.00 Total $         500.00 Kristin Malone Uadjusted Trial Balance July 31st Heads   Debit Credit Cash $            6,600.00 Accounts Receivable $            3,900.00 Prepaid Insurace $            1,800.00 Cleaning Supplies $               800.00 Used Truck $         10,000.00 Accounts Payable $                          6,400.00 Common Stock $                        14,000.00 Service Revenue $                          5,300.00 Dividend Paid $               600.00 Salary Expenses $            1,600.00 Gasoline Expense $               400.00 Total $         25,700.00 $                        25,700.00 Kristin Malone Adjusted Trial Balance July 31st Heads   Debit Credit Cash $            6,600.00 Accounts Receivable $            3,900.00 Unbilled Accounts Receivable $            1,300.00 Prepaid Insurace $            1,650.00 Cleaning Supplies $               100.00 Used Truck $         10,000.00 Accounts Payable $                          6,400.00 Salary Payable $                              500.00 Common Stock $                        14,000.00 Accumulated Depreciation $                              200.00 Cleaning Supplies Expenses $               700.00 Service Revenue $                          6,600.00 Dividend Paid $               600.00 Insurance Expenses $               150.00 Salary Expenses $            2,100.00 Gasoline Expense $               400.00 Depreciation $               200.00 Total $         27,700.00 $                        27,700.00