1 Requirements: A. Journalize the July transactions. Use the provi...

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1 Requirements: A. Journalize the July transactions. Use the provided Chart of Accounts. Do not invent new accounts. (journal entry forms attached; include a description and PLEASE skip a line between journal entries) B. Post to the general ledger accounts (T accounts) C. Journalize the adjustments and post to the general ledger accounts (use attached journal entries and T accounts) D. Note the ending balances on the general ledger accounts in good form. (T accounts) E. Prepare a trial balance in good form. (Use trial balance form) F. Prepare an Income Statement, Balance Sheet, and Retained Earnings Statement for July. 2 of 12 1. Brett Farve opened Cornelian Window Washing Inc. on July 1, 2011. During July the following transactions were completed. The chart of accounts is given so you do not have to create your own. It is on page 3. July 2011 # Day Description 1 1 Issued $9,000 of common stock for $9,000 of cash. 2 1 Purchased used truck for $6,000, paying $3,000 in cash and the balance on account. 3 3 Purchased cleaning supplies for $900 on account. 4 5 Paid $1,200 cash on a 1-year insurance policy, effective July 1. 5 12 Billed customers $2,500 for cleaning services. 6 13 Brett got a phone call from a manager of a large office building (Axis Building). The manager asked Brett to prepare a bid sheet for washing all of his windows 4 times per month. 7 18 Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies. 8 20 Paid $1,200 cash for employee salaries. 9 20 Brett met with the manager of the large office building (Axis Building) and submitted a bid of $5,500 for complete window washing maintenance 4 times per month. The manager liked the bid but had to discuss this large a contract with the owner. Brett is almost sure the work will come in starting August 1. 10 21 Collected $1,400 cash from customers billed on July 12. 11 25 Billed customers $2,000 for cleaning services. 12 26 Brett got a phone call from the manager of the Axis Building. The owner was willing to pay $5,000 per month for 4 window washings. Brett considered the offer and said it seemed acceptable for him. The manager said to bring over the contract and start during the week of August 5th. 13 31 Paid cash for gas and oil for month for truck of $200. 14 31 When he picked up the truck after servicing the maintenance man told him the truck should be winterized before November. The cost for all the work would be $75. Brett made an appointment for winterization of the truck on September 13. 3 of 12 15 31 Declared and paid a $300 dividend. 16 31 An employee approached Brett with a salary request. The employee was willing to work for $3 less an hour if Brett would pay the salary ‘under the table’. The employee’s spouse had a good job and the salary the employee was getting would put the family into a new income tax bracket. The employee was a good employee and would have to quit if Brett did not oblige. Brett saw the savings opportunity but said he’d have to talk to his advisor. In addition the following adjustments were necessary # Day Description 17 31 Services provided but unbilled and uncollected at July 31 were $1,100. 18 31 Depreciation on equipment for month was $200. 19 31 One-twelfth of the insurance expired. 20 31 An inventory count shows $600 of cleaning supplies on hand. 21 31 Accrued but unpaid employee salaries were $400. 4 of 12 Cornelian Window Washing Inc. Chart of Accounts: 100 Cash Cash in bank and in petty cash funds 120 Accounts Receivable Revenue billed but not yet received 130 Cleaning Supplies Supplies used in the cleaning business 140 Prepaid Insurance Insurance policy for the operations of the business 150 Equipment Equipment used in the operations of the business 155 Accumulated Depreciation - Equipment Amounts of equipment values previously assigned as an expense of business. (Contra Account) 200 Accounts Payable Amounts owed by the business for items purchased and delivered but not paid for. 210 Salaries Payable Amounts owed to employees of business for wages 300 Common Stock Ownership investment 310 Retained Earnings Net income retained in the business 330 Dividends Amounts paid to stockholders during the period. 340 Income Summary Clearing account to close nominal accounts 400 Service Revenue Revenues for operating purpose of the company 500 Gas & Oil Expense Cost of operating equipment fuel and oil 510 Cleaning Supplies Expense Expense of cleaning supplies 520 Depreciation Expense Amounts recognized as equip. expense 530 Insurance Expense Amounts recognized as insurance used 540 Salaries Expense Amounts owed / or paid/ to employees 560 Repair & Maintenance Expense Normal/ordinary costs owed / or paid/ to keep assets in working order 5 of 12 General Journal—always, always, include description. Put debits first, then credits, then one description for entire entry, then skip a space before next journal entry. # DATE Account Titles AND Description Debit Credit 1 1 Cash 9,000 Common stock 9,000 2 1 Equipment - Truck 6,000 Cash 3,000 A/P 3,000 3 3 Cleaning Supplies 900 A/P 900 4 5 Insurance expense 1,200 Cash 1,200 5 12 A/R 2,500 Service revenue 2,500 6 13 No Entry 7 18 A/P (cleaning supply and truck) 1,500 Cash 1,500 8 20 Salaries expense 1,200 Cash 1,200 9 20 No Entry 10 21 Cash 1,400 Service revenue 1,400 Journal entry conventions: 1. List ALL debits first, then credits 2. Always put a journal description on submitted work!! (e.g., exams) 6 of 12 3. Always, always make sure for each journal entry that the total $ in debits = total $ in credits! # DATE Account Titles AND Description Debit Credit 11 25 A/R 2,000 Service revenue 2,000 12 26 No Entry 13 31 Gas & Oil expense 200 Cash 200 14 31 No Entry 15 31 Dividend 300 Cash 300 7 of 12 # DATE Account Titles AND Description Debit Credit 8 of 12 T Accounts Cornelian Window Washing T Accounts Cash Equipment Accounts Receivable Accum. Deprec, Equipment Cleaning Supplies Accounts Payable Prepaid Insurance Salaries Payable 9 of 12 Common Stock Gas & Oil Expense Retained Earnings Cleaning Supplies Expense Dividends Depreciation Expense Service Revenue Insurance Expense Salaries Expense 10 of 12 Cornelian Window Washing Trial Balance July 31, 20___ Account Number Account Title Debit Credit TOTAL 11 of 12 Cornelian Window Washing INCOME STATEMENT July 31, 20___ Cornelian Window Washing STATEMENT OF RETAINED EARNINGS July 31, 20___ 12 of 12 Cornelian Window Washing BALANCE SHEET July 31, 20___

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