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