kathy herman opened kwick cleaners on march 1 2010 during 240144

Kathy Herman opened Kwick Cleaners on March 1, 2010. During March, the following transactions were completed.

Mar. 1 Issued 10,000 shares of common stock for $15,000 cash.

1 Purchased used truck for $8,000, paying $3,000 cash and the balance on account.

3 Purchased cleaning supplies for $1,200 on account.

5 Paid $2,400 cash on 1-year insurance policy effective March 1.

14 Billed customers $3,700 for cleaning services.

18 Paid $1,500 cash on amount owed on truck and $500 on amount owed on cleaning supplies.

20 Paid $1,750 cash for employee salaries.

21 Collected $1,600 cash from customers billed on March 14.

28 Billed customers $4,200 for cleaning services.

31 Paid $350 for gas and oil used in truck during month.

31 Declared and paid a $900 cash dividend.

The chart of accounts for Kwick Cleaners contains the following accounts: Cash, Accounts Receivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Salaries Payable, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Gas & Oil Expense, Cleaning Supplies Expense, Depreciation Expense, Insurance Expense, Salaries Expense.

Instructions

(a) Journalize the March transactions.

(b) Post to the ledger accounts. (Use T accounts.)

(c) Prepare a trial balance at March 31.

(d) Journalize the following adjustments.

1. Earned but unbilled revenue at March 31 was $600.

2. Depreciation on equipment for the month was $250.

3. One-twelfth of the insurance expired.

4. An inventory count shows $280 of cleaning supplies on hand at March 31.

5. Accrued but unpaid employee salaries were $830.

(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 March and a classified balance sheet at March 31.

(h) Journalize and post closing entries and complete the closing process.

(i) Prepare a post-closing trial balance at March 31.

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