Problem P3-5A
On September 1, 2002, the account balances of Rijo Equipment Repair Corp. were as follows:
Nbr: Debits Nbr: Credits
101 Cash $4,880 154 Accumulated depreciation $1,500
112 Accounts receivable 3,520 201 Accounts payable 3,400
126 Supplies 2,000 209 Unearned service revenue 1,400
153 Store equipment 15,000 212 Salaries payable 500
311 Common stock 10,000
320 Retained earnings 8,600
$25,400 $25,400
During September the following summary transactions were completed:
Sep 8 Paid salaries due employees, of which a portion was for September. $1,100 Total paid
600 September amount
Sep 10 Received cash from customers on account. 1,200
Sep 12 Received cash for services performed in September. 3,400
Sep 15 Purchased store equipment on account. 3,000
Sep 17 Purchased supplies on account. 1,500
Sep 20 Paid creditors on account. 4,500
Sep 22 Paid September rent. 500
Sep 25 Paid salaries. 1,050
Sep 27 Performed services on account and billed customers for services rendered. 700
Sep 29 Received cash from customers for future services. 650
Adjustment data consists of:
1 Supplies on hand at the end of the month: $1,700
2 Accrued salaries payable: 400
3 Depreciation rate per month: 200
4 Unearned services revenue which was earned during the month: 1,450
Instructions:
(a) Enter the September 1 balances in the ledger accounts. The ledger is found after the journal in instruction (e).
(b) Journalize the September transactions. The journal is found after instruction (e). Utilize J1 as a reference. J1
(c) Post to the ledger accounts. Use J1 for the posting reference. Use the following accounts:
407 Service revenue 726 Salaries expense
615 Depreciation expense 729 Rent expense
631 Supplies expense
(d) Prepare a trial balance at September 30. (This form will be utilized for instruction (f) as well.) (e) Journalize and post the adjusting entries. Continue these following your last journal entry required by instruction (b).
(f) Prepare an adjusted trial balance. Use the next columns in the trial balance created in instruction (d), above.
(g) (1) Prepare an income statement for September.
(g) (2) Prepare a retained earnings statement for September.
(g) (3) Prepare a balance sheet for September 30, 2002.
Thanks
On August 1, 2018, the account balances of Rand Equipment Repair were as follows: No. Debits No. Credits Accumulated Depreciation Accounts Payable 101 Cash $4,880 154 $1,500 112 Accounts Receivable 3,520 201 3,400 126 Supplies 2,000 209 Unearned Service Revenue 1,400 Salaries Payable J. Rand, Capital 153 Store Equipment 15,000 212 500 301 18,600 $25,400 $25.400 During August the following summary transactions were completed. Aug. 2 Rand Equipment Repair added capital introduce $10,000 in business. 8 Paid $1,400 for salaries due employees for July, of which $900 is for August. 10 Received $1,200 cash from customers on account. 12 Received $3,400 cash for services performed in August. 15 Purchased store equipment on account $3,000. 17 Purchased supplies on account $1,200. 20 Paid creditors $4,500 on account. 22 Paid August rent $500. 25 Paid salaries $1,250. 27 Performed services on account and billed customers for services provided S1,500. 29 Received $650 from customers for future service (Unearned Service Revenue). On 31 August the business made the following transactions: 1. Supplies used for company is $2,000. 2. Accrued salaries payable $400. 3. Depreciation is $100 per month. 4. Unearned service revenue of $1,450 is earned. 5. Owner drawing $500 for personal use. You use the following additional accounts: No. 407 Service Revenue, No. 615 Depreciation Expense, No. 631 Supplies Expense, No. 726 Salaries Expense, and No. 729 Rent Expense, No.302 J. Rand, Drawing, No.303 Income Summary Required (1) Analyze to all transactions in this company from 2 August to 29 August. (2) Journalize the August transactions. (3) Post to the ledger accounts (Use T-account). (4) Prepare a trial balance at August 30. (5) Journalize and post adjusting entries. (6) Prepare an adjusted trial balance. (7) Prepare a Profit or loss Statement and a Change Owner's Equity Statement for August and a Statement of Financial Position at August 31. Prepare closing entry for August, 2018. Prepare post-closing trial balance at 31 August, 2018.
To solve this problem, we need to perform several steps. Let's go through each step one by one:
(a) Enter the September 1 balances in the ledger accounts:
- The account balances given on September 1 are:
- Cash: $4,880 (Debit)
- Accumulated depreciation: $1,500 (Credit)
- Accounts receivable: $3,520 (Debit)
- Accounts payable: $3,400 (Credit)
- Supplies: $2,000 (Debit)
- Unearned service revenue: $1,400 (Credit)
- Store equipment: $15,000 (Debit)
- Common stock: $10,000 (Credit)
- Retained earnings: $8,600 (Credit)
(b) Journalize the September transactions:
- For each transaction given, record them in the journal. Use "J1" as reference.
(c) Post to the ledger accounts:
- After journalizing the transactions, update the ledger accounts with the transaction details. Use "J1" as the posting reference. The accounts to be used are:
- Cash (101)
- Accumulated depreciation (154)
- Accounts receivable (112)
- Accounts payable (201)
- Supplies (126)
- Unearned service revenue (209)
- Store equipment (153)
- Common stock (311)
- Retained earnings (320)
- Service revenue (407)
- Salaries expense (726)
- Rent expense (729)
- Supplies expense (631)
(d) Prepare a trial balance at September 30:
- Compile the balances of all the ledger accounts to prepare a trial balance. This will help ensure that the total debit and credit balances are equal.
(e) Journalize and post the adjusting entries:
- Take the adjustment data given and journalize the adjusting entries, following the last journal entry in instruction (b). Use "J2" as reference.
- Post the adjusting entries to the ledger accounts, using "J2" as the posting reference.
(f) Prepare an adjusted trial balance:
- Update the trial balance prepared in instruction (d) with the adjusted balances after posting the adjusting entries. Use the next columns in the trial balance.
(g) Prepare financial statements:
- (1) Prepare an income statement for September by summarizing the revenue and expense accounts. This will show the net income or loss for the month.
- (2) Prepare a retained earnings statement for September to show the changes in retained earnings during the month, considering net income/loss and any dividends.
- (3) Prepare a balance sheet for September 30, 2002, to present the financial position of the company at the end of the month.
Following these steps will help you solve Problem P3-5A.