On December 1st Curt Williamson began an auto repair shop, Williamsons Quality Automotive. The following information about December’s transactions, accounts, and adjustment data is available.
Transactions:
Dec. 1 Williamson contributed $50,000 cash to the business in exchange for capital.
1 Purchased $10,800 of equipment paying cash.
1 Paid $4,500 for a 9-month insurance policy starting on December 1.
9 Paid $18,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $3,000.
19 Borrowed $28,000 from the bank for business use. Williamson signed a note payable to the bank inthe name of the business.
22 Paid $800 for advertising expenses.
26 Paid $1,000 on account.
28 The business received a bill for utilities to be paid in January, $280.
31 Revenues earned during the month included $17,500 cash and $2,700 on account.
31 Paid employees' salaries $3,600 and building rent $700. Record as a compound entry.
31 The business received $1,440 for auto screening services to be performed next month.
31 Williamson withdrew cash of $3,000.Accounts
Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated DepreciationEquipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable;Williamson, Capital; Williamson, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense;Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation ExpenseEquipment.
Adjustment Data
a) Office Supplies used during the month, $600.
b) Depreciation for the month, $180.
c) One-month insurance has expired.
Requirements:
Complete the following,
1) Prepare General Journal Entries and T- Accounts.
2) Prepare an unadjusted trial balance.
3) Prepare the adjusting entries and post to the T-accounts.
4) Prepare an adjusted trial balance.
Answers
Accountancy
Explanation:
Pls refer to the attached document for answer.
Answer:
Explanation:
GENERALJOURNAL
Dec. 1 Cash 50,000
Williamson Capital 50,000
Cash in exchange for capital
Dec. 1 Equipment 10,800
Cash 10,800
Paid cash for equipment
Dec. 1 Prepaid Insurance 4,500
Cash 4,500
Prepaid insurance premium with cash
Dec. 9 Land 18,000
Cash 18,000
Paid cash for land
Dec. 10 Office Supplies 3,000
Accounts Payable 3,000
Purchased office supplies on account
Dec. 19 Cash 28,000
Notes Payable 28,000
Borrowed cash for business use
Dec. 22 Advertising Expense 800
Cash 800
Paid cash for advertising
Dec. 26 Accounts Payable 1,000
Cash 1,000
Paid cash on account
Dec. 28 Utilities Expense 280
Utilities Payable 280
To record future payment for utilities
Dec. 31 Cash 17,500
Accounts Receivable 2,700
Service Revenue 20,200
To record service revenue
Dec. 31 Salaries Expense 3,600
Rent Expense 700
Cash 4,300
To record expenses
Dec. 31 Cash 1,440
Unearned Revenue 1,440
To record unearned revenue
Dec. 31 Williamson, Withdrawals 3,000
Cash 3,000
To record owner’s draw
Dec. 31 Supplies Expense 600
Office Supplies 600
To record used office supplies
Dec.31 Depreciation Expense –Equipment 180
Accumulated Depreciation –Equipment 180
To record depreciation of equipment
Dec. 31 Insurance Expense 500
Prepaid Insurance 500
To record expired insurance
Dec. 31 Interest Expense 75
Interest Payable 75
To accrue interest expense
Dec. 31 Income Summary 6,735
Salaries Expense 3,600
Rent Expense 700
Utilities Expense 280
Advertising Expense 800
Supplies Expense 600
Insurance Expense 500
Interest Expense 75
Depreciation Expense –Equipment 180
To close expenses
Dec. 31 Service Revenue 20,200
Income Summary 20,200
To close revenue
Dec 31 Income Summary 13,465
Williamson, Capital 13,465
To close Income Summary
Dec. 31 Williamson, Capital 3,000
Williamson, Withdrawals 3,000