P4-5ALaura Eddy opened Eddy's Carpet Cleaners on March 1. During March, the following transactions were completed.Mar. 1 Issued stock for $10,000 in cash.1 Purchased used truck for $6,000, paying $3,000 cash and the balance on account.3 Purchased cleaning supplies for $1,200 on account.5 Paid $1,200 cash on one-year insurance policy effective March 1.14 Billed customers $4,800 for cleaning services.18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies.20 Paid $1,800 cash for employee salaries.21 Collected $1,400 cash from customers billed on March 14.28 Billed customers $2,500 for cleaning services.31 Paid gas and oil for month on truck $200.31 Declared and paid a $700 cash dividend.The chart of accounts for Eddy's Carpet Cleaners contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable, No. 311 Common Stock, No. 320 Retained Earnings, No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries ExpenseJournalize the March transactions. Use page J1 for the journal. (List amounts from largest to smallest eg 10, 5, 3, 2. If amounts are the same list alphabetically.)General JournalJ1Date Description Debit CreditMar. 1Mar. 1Mar. 3Mar. 5Mar. 14Mar. 18Mar.20Mar. 21Mar. 28Mar. 31Mar. 31Prepare a trial balance at March 31 on a worksheet. Enter the following adjustments on the worksheet and complete the worksheet. (If answer is zero, please enter 0. Do not leave any fields blank.)Earned but unbilled revenue at March 31 was $700.Depreciation on equipment for the month was $250.One-twelfth of the insurance expired.An inventory count shows $400 of cleaning supplies on hand at March 31.Accrued but unpaid employee salaries were $500.EDDY'S CARPET CLEANERSWorksheetFor the Month Ended March 31, 2008Trial BalanceAdjustmentsAdjusted Trial BalanceIncome StatementBalance SheetAccount Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.CashAccounts ReceivableCleaning SuppliesPrepaid InsuranceEquipmentAccounts PayableCommon stockDividendsService RevenueGas & Oil ExpenseSalaries ExpenseTotalsDepreciation ExpenseAccumulated DepreciationInsurance ExpenseCleaning Supplies ExpenseSalaries PayableTotalsNet IncomeTotalsPrepare the income statement and retained earnings statement for March and a classified balance sheet at March 31. (List amounts from largest to smallest eg 10, 5, 3, 2. List assets in order of liquidity and liabilities from largest to smallest eg 10, 5, 3, 2. If answer is zero, please enter 0. Do not leave any fields blank.)EDDY'S CARPET CLEANERSIncome StatementFor the Month Ended March 31, 2008Revenues$Expenses$Total expensesNet income$EDDY'S CARPET CLEANERSRetained Earnings StatementFor the Month Ended March 31, 2008$Add:Less:$EDDY'S CARPET CLEANERSBalance SheetMarch 31, 2008AssetsCurrent Assets$Total current assetsProperty, plant and equipment$Less:Total assets$Liabilities and Stockholders' EquityCurrent liabilities$Total current liabilitiesStockholders' Equity$Total stockholders' equityTotal liabilities and stockholders' equity$Journalize adjusting entries. Use page J2 for the journal.General JournalJ2Date Description Debit CreditMar. 31(To adjust accounts receivable.)Mar. 31(To adjust depreciation.)Mar. 31(To adjust insurance.)Mar. 31(To adjust cleaning supplies.)Mar. 31(To adjust salaries.)Journalize the closing entries. Use page J3 for the journal. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)General JournalJ3Da Optional Information:Level/Year: 2011Subject: financial accounting
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Professor of Finance & Business Mathematics