Solution :
Prepare Journal entries :
Transaction General Journal Debit Credit
a Cash 27,300
Accounts receivable 19,700
Service revenue 47,000
b Cash 16,700
Accounts receivable 16,700
c Cash 6000
Common stock 6000
d Salaries expense 16,6000
salaries payable 8,100
e Repairs and maintenance 11,700
Cash 11,700
f Equipment 6,700
Cash 6,700
g Dividends 1,100
Cash 1,100
Prepare an unadjusted trial balance :
Red Storm Cleaners
Unadjusted Trial balance, December 31, 2015
Accounts Debit Credit
Cash(13500+27300+16700+6000-24700-11700-1100) 19,300
Accounts receivable (6700+19700-16700) 9,700
Supplies 2,700
Equipment (16500+6700) 23,200
Accumulated depreciation 5,600
Salaries payable 0
Common stock (18500+6000) 24,500
Retained earnings 7,200
Dividends 1,100
Service revenue 47,000
Salaries expense 16,600
Repairs and maintenance expense <u> 11,700 </u>
Totals 84,300 84,300
Prepare adjusted entries :
Transaction General Journal Debit Credit
1 Salaries expenses 1,100
Salaries payable 1,100
2. Depreciation expense 3,700
Accumulated depreciation 3,700
3. Supplies expense 1,000
Supplies 1,000
Prepare an adjusted trial balance :
Red Storm Cleaners
Adjusted Trial balance, December 31, 2015
Accounts Debit Credit
Cash(13500+27300+16700+6000-24700-11700-1100) 19,300
Accounts receivable (6700+19700-16700) 9,700
Supplies (2700-1000) 1,700
Equipment (16500+6700) 23,200
Accumulated depreciation (5600+3700) 9,300
Salaries payable 1,100
Common stock (18500+6000) 24,500
Retained earnings 7,200
Dividends 1,100
Service revenue 47,000
Salaries expense(16600+1100) 17,700
Repairs and maintenance expense 11,700
Depreciation 3,700
Supplies expense <u> 1,000 </u>
Totals 89,100 89,100
Prepare Income statement
RS Cleaners
Income statement, Dec 31, 2015
Incomes:
Service revenue 47,000
Total Income 47,000
Expenses :
Dividends 1,100
Repairs and maintenance 11,700
Salaries 17,700
Supplies expense 1,000
Depreciation <u> 3,700 </u>
Total Expenses <u> 35,200 </u>
Net Income 11,800
