principle of accounting

| September 29, 2018

Comprehensive
Problem for Extra Credit – ACC 211 – Spring 2015

The following problem is available for a
maximum of 15 extra credit points.
This problem is due Monday, March 30th
at the beginning of your class session.
This is a long problem and should not be
completed in one sitting. I would
suggest preparing a part at a time. It
takes you through the complete accounting cycle – from journalizing to closing.

While the problem does not have to be
typed, presentation does influence grading.
I would suggest working the problem and
then recopying/typing the problem for grading.
You must just the blank journal pages
for journalizing and the blank ledger pages for posting. Both of these are located on Sakai under the
resources tab.

Kristin Malone opened Kristin’s Maids Cleaning
Service on July 1, 2014. During July,
the company completed the following transactions.

July 1 Invested $14,000 cash in the business.

1 Purchased a used truck for $10,000,
paying $3,000 cash and the balance on account.
3 Purchased cleaning supplies for $800
on account.
5 Paid $1,800 on a 1-year insurance
policy, effective July 1.
12 Billed customers $3,800 for cleaning
services.
18 Paid $1,000 of amount owed on truck, and
$400 of amount owed on cleaning supplies.
20 Paid $1,600 for employee salaries.
21 Collected $1,400 from customers billed on
July 12.
25 Billed customers $1,500 for cleaning
services.
31 Paid gasoline for the month on the
truck, $400.
31 Withdrew $600 cash for personal use.

The chart of accounts for Kristin’s Maids Cleaning
Service contains the following accounts: No. 101 Cash, No. 112 Accounts
Receivable, No. 126 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No.
158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212
Salaries and Wages Payable, No. 301 Owner’s Capital, No. 306 Owner’s Drawings,
No. 350 Income Summary, No. 400 Service Revenue, No. 631 Supplies Expense, No.
633 Gasoline Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense,
and No. 726 Salaries and Wages Expense.

Instructions
(a) Journalize
and post the July transactions. Use page
J1 for the journal. Use blank journal pages and blank ledger pages for
posting. These are available on Sakai.
(b) Prepare
a trial balance
(c) Record adjusting journal entries based on
the information below. Use page J2 for
the journal.
(1)
Unbilled fees for services performed at July 31 were $1,300.
(2)
Depreciation on equipment for the month was $200.
(3)
One-twelfth of the insurance expired.
(4)
An inventory count shows $100 of cleaning supplies on hand at July
31.
(5)
Accrued but unpaid employee salaries were $500.
(d)
Post
the adjusting journal entries to the ledger.
(e) Prepare an adjusted trial balance.
(f) Prepare the
income statement and owner’s equity statement for July, and a classified
balance sheet
at July 31, 2014.
(g)
Journalize
and post the closing entries to the ledger, and complete the closing process.
Use page J3 for the journal.
(h)
Prepare
a post-closing trial balance at July 31.

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