Question:
Because Aqua Elite, Inc. is a new startup business, the
beginning balances in all the general ledger accounts are
zero to start.
n The length of the accounting periods are three months
using a fiscal calendar year. (A fiscal calendar is on a
yearly basis other than a calendar year—January 1st to
December 31st. For example, a fiscal calendar year can
be May 1, 2009, through April 30, 2010). Therefore,
posting to the general ledger, adjustments and closing
entries are made on a fiscal quarterly basis.
n Accounts Receivable and Accounts Payable subsidiary
ledgers aren’t being used. Any references to invoicing,
receipts, or payments “on account” assume changes to
the running balance in the Accounts Receivable and
Accounts Payable general ledger accounts.
n Payroll calculations aren’t necessary. Assume the salary
is the gross pay with no deductions taken. Therefore, the
net pay is the same as the gross pay, requiring a simplified journal entry to record the expense.
n Use the information in the Chart of Accounts that’s provided after the Requirements section below. Add general
ledger accounts if necessary.
Requirements
1. Journalize the transactions. Omit explanations.
2. Post the transactions to the general ledger, creating new
ledger accounts as necessary. Calculate the new general
ledger account balances.
3. Prepare the unadjusted trial balance for Aqua Elite, Inc.,
at the end of July.
4. Journalize and post the adjusting entries for July based
on the following adjustment information:
a. Record the expired rent.
b. Supplies on hand, $350.
c. Depreciation: $400 equipment, $210 furniture, $650
vehicles.
d. Services performed but unbilled, $1,900.
e. Accrued salaries, $675.
f. Unearned service revenue earned as of July 31, $800.
5. Prepare an adjusted trial balance for Aqua Elite, Inc., at
the end of July.
6. Prepare the Income Statement, Statement of Retained
Earnings, and Balance Sheet for the three-month period
May through July 20XX.
7. Prepare, journalize, and post closing entries.
8. Prepare a Post-Closing Trial Balance for the end of the
period.
May
1
Mike invested $15,000 cash and a used truck worth $13,500 in the business in exchange
for company stock.
3 Paid $4,700 cash to purchase office equipment.
7 Purchased $860 of supplies on account.
12 Performed services for cash customers and received $850.
15 Paid salaries of $675 to the office receptionist.
16 Sold the company truck for $13,500.
18 Signed a note payable for $31,000 to purchase a new truck.
21 Performed $3,200 of services on account for a local hotel chain.
27 Paid $500 of the amount owed from the purchase of supplies on May 7.
30 Received $2,000 on account from credit customers.
31
Received the utility bill for the month of May, $480. The bill is not due until the 15th
of June.
31 Paid $1,000 dividends to the shareholder, XXXXX XXXXXson.
June
1 Paid receptionist’s salary, $675.
2 Paid cash to acquire land for a future office site, $15,000.
3 Moved into a new location for the business and paid the first month’s rent, $1,800.
4 Performed service for a customer and received cash, $1,700.
5 Received $500 on account.
8 Purchased $750 of supplies on account.
11 Billed customers for services performed, $3,800.
13 Sold an additional $10,000 of stock to XXXXX XXXXXson.
16 Paid receptionist’s salary, $675.
17 Received $1,350 cash for services performed.
18 Received $1,500 from customers on account.
19 Paid $325 to be listed in the yellow pages telephone directory.
21 Paid $1,000 on account.
22 Purchased office furniture on account, $3,300.
24 Paid miscellaneous expenses, $275.
26 Billed customers for services provided, $1,000.
28 Received $300 from customers on account.
30 Paid utility bill, $745.
30 Paid receptionist’s salary, $675.
30 Paid $1,800 of dividends.
July
1 Paid three months’ rent, $4,500.
4 Performed service for a customer and received cash, $2,100.
9 Received $3,600 from customers for services to be performed later.
12 Purchased $750 of supplies on account.
15 Billed customers for services performed, $2,800.
16 Paid receptionist’s salary, $675.
22 Received $3,100 on account.
25 Paid $2,800 on account.
28 Received $1,200 cash for services performed.
30 Paid $600 of dividends.
NEEDED
Balance Sheet
Income Statement
Statement of Retained Earnings
Post-Closing Trial Balance
please help...i am stuck and have been working on this for 2 wks now
To answer this question and complete the requirements, you will need to follow a series of steps. I will provide a brief overview of each step, but it is important to carefully read the instructions and refer to the information given in the question.
Step 1: Journalize the transactions.
For each transaction listed in the question, you need to record them in the general journal. Make sure to omit explanations.
Step 2: Post the transactions to the general ledger.
Create a general ledger with the necessary accounts from the Chart of Accounts provided. Record the transactions from the general journal to the appropriate ledger accounts. Calculate the new balances for each account.
Step 3: Prepare the unadjusted trial balance.
List all the general ledger accounts and their respective balances from the general ledger. Calculate the total debit and credit amounts to ensure they are equal.
Step 4: Journalize and post the adjusting entries for July.
Based on the adjustment information provided, make the necessary adjusting entries in the general journal. Then, post these entries to the general ledger. Recalculate the balances for each account.
Step 5: Prepare an adjusted trial balance.
Similar to step 3, list all the general ledger accounts and their balances from the adjusted general ledger. Calculate the total debit and credit amounts to ensure they are equal.
Step 6: Prepare the Income Statement, Statement of Retained Earnings, and Balance Sheet.
Using the information from the adjusted trial balance, create the Income Statement to calculate the net income/loss. Then, prepare the Statement of Retained Earnings to show the beginning and ending retained earnings. Finally, prepare the Balance Sheet to list the assets, liabilities, and equity.
Step 7: Prepare, journalize, and post closing entries.
Close the temporary accounts (revenue, expense, and dividends) by transferring their balances to the retained earnings account. Journalize these closing entries in the general journal and post them to the general ledger.
Step 8: Prepare a Post-Closing Trial Balance.
List all the general ledger accounts and their balances from the post-closing adjusted general ledger. Calculate the total debit and credit amounts to ensure they are equal.
By following these steps, you should be able to complete the requirements and prepare the necessary financial statements. Remember to refer to the Chart of Accounts provided for the appropriate accounts. Good luck!