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    Tom Smith Opened XYZ Cleaning Services

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    See attached Excel file.

    Tom Smith opened XYZ Cleaning Services, Inc. on July 1, 2012.

    During July the following transactions were completed.

    July 1 Issued 15,000 shares of common stock for $15,000 cash.
    1 Purchased a truck for $12,000 , paying $2,500 cash
    and the balance on account.
    3 Purchased cleaning supplies for $1,400 on account.
    5 Paid $2,400 cash on 1-year insurance policy effective July 1.
    12 Billed customers $5,600 for cleaning services.
    18 Paid $2,600 cash on amount owed on truck and
    $800 on account owed on cleaning supplies.
    20 Paid $2,350 cash for employee salaries.
    21 Collected $4,600 cash from customers billed on July 12.
    25 Billed customers $3,800 for cleaning services.
    31 Paid $455 for maintenance of the truck during the month.
    31 Declared and paid $800 cash dividend.

    The chart of accounts for XYZ Cleaning Services contains the
    following accounts: Cash, Accounts Receivable, Supplies,
    Prepaid Insurance, Equipment, Accumulated Depreciation - Equipment,
    Accounts Payable, Salaries and Wages Payable, Common Stock,
    Retained Earnings, Dividends, Income Summary, Service Revenue,
    Maintenance and Repairs Expense, Supplies Expense, Depreciation
    Expense, Insurance Expense, Salaries and Wages Expense.

    Instructions:

    (a) Journalize the July transactions.
    (b) Post to the ledger accounts. (Use T accounts).
    (c) Prepare a trial balance at July 31.
    (d) Journalize the following adjustments.
    (1) Services provided but unbilled and uncollected at July 31 $1,900
    (2) Depreciation on equipment for the month was $250
    (3) One-twelfth of the insurance expired.
    (4) An inventory count shows $275 of cleaning supplies on hand at July 31.
    (5) Accrued but unpaid employee salaries were $650
    (e) Post adjusting entries to the T accounts.
    (f) Prepare an adjusted trial balance.
    (g) Prepare the income statement and a retained earnings statement for
    July and a classified balance sheet at July 31.
    (h) Journalize and post closing entries and complete the closing process
    (i) Prepare a post-closing trial balance at July 31.

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    https://brainmass.com/business/trial-balance/tom-smith-opened-xyz-cleaning-services-454254

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    Solution Summary

    The solution discusses how Tom Smith opened XYZ cleaning services, including journalizing transactions, posting ledgers, preparing trial balances, and adjusting entries.

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