How do i do this practice math problem?
Julie Molony opened Julie’s Maids Catering Service on July 1, 2010. During July the company completed the following transactions:
July 1 Invested $14,000 in common stocks in the business.
1 Purchased a delivery truck for $10,000, paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $800 on account.
5 Paid $1,800 on a one-year insurance policy, effective July 1.
12 Billed customers $3,800 for catering services.
18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.
20 Paid $1,600 for employee salaries.
21 Collected $1,400 for customers billed on July 12.
25 Billed customers $1,500 for catering services.
31 Paid gas and oil for the month on the truck for $400.
31 Paid dividends $600 cash.
The chart of accounts for Julie’s Maid Catering Service contains the following accounts: No.101 Cash, No. 112 Account Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation – Equipment, No. 201 Account Payable, No. 212 Salaries Payable, No. 301 Common Stocks, No. 306 Dividends, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Catering Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.
INSTRUCTIONS:
a)Journalize and post the July transactions.Use J1 for the journal reference.
b)Prepare a trial balance at July 31 on a worksheet.
ADJUSTMENTS:
1) Earned but unbilled fees at July 31 were $1,300.
2) Depreciation on equipment for the month was $200.
3) One-twelfth of the insurance expired.
4) An inventory count shows $100 of catering supplies on hand at July 31.
5) Accrued but unpaid employee salaries were $500.
c) Journalize and post the adjusting entries. Use J2 for the journal reference.
d) Prepare the income statement and retained earnings statement for July and a balance sheet at July 31, 2010.
Just do it yourself... you will never learn if you don't practice... CHEATERS NEVER PROSPER!;)
To solve this practice math problem, you need to journalize and post the July transactions, prepare a trial balance, journalize and post the adjusting entries, and finally prepare the income statement, retained earnings statement, and balance sheet. Here's how you can approach each step:
a) Journalizing and posting the July transactions:
1. Identify each transaction and the accounts involved.
2. Use the information provided to determine the appropriate amount for each account.
3. Decide whether the account is increasing or decreasing based on the nature of the transaction (i.e., whether it's an asset, liability, or revenue account).
4. Record each transaction in a journal entry format, using the journal reference J1.
5. Post the journal entries to the respective accounts in the general ledger.
b) Preparing a trial balance at July 31:
1. List all the accounts from the chart of accounts.
2. Record the balances of each account after posting the July transactions.
3. Calculate the total debit and credit balances.
4. Compare the total debit and credit balances to ensure they are equal.
c) Journalizing and posting the adjusting entries:
1. Review the instructions for the adjusting entries and identify each adjustment and the accounts involved.
2. Determine the amount to be adjusted and the appropriate accounts.
3. Record the adjusting entries in a journal entry format, using the journal reference J2.
4. Post the adjusting entries to the respective accounts in the general ledger.
d) Preparing the income statement, retained earnings statement, and balance sheet:
1. Calculate the net income by subtracting the total expenses from the total revenue.
2. Determine the ending balance of retained earnings by adding the net income to the beginning balance.
3. Prepare the income statement by listing the revenue and expense accounts and their respective balances.
4. Prepare the retained earnings statement by showing the beginning balance, net income, and ending balance.
5. Prepare the balance sheet by listing the assets, liabilities, and equity accounts and their respective balances.
By following these steps, you will be able to solve the practice math problem.