Prepare a trial balance and income statement, Financial Accounting

Cleaning Co. began business on March 1, 2011. The company provides specialized cleaning services to corporate clients. Listed below are the transactions entered into by Cleaning Co. during its first month of operations:

1. Borrowed $200,000 and signed a 10-year note at the bank.

2. Issued 1,000 shares for $100,000 in cash.

3. Signed a 1-year lease for space in a strip mall on March 1and paid the first month's rent of $1,000 in cash.

4. Acquired cleaning equipment at a cost of $100,000. The company paid $25,000 in cash and will pay the remainder during the next year. The equipment is expected to last ten years.

5. Provided services to 25 clients who were charged fees of $200 each for the month. 20 clients paid the monthly fees. 5 clients were provided services but have not paid yet.

6. Paid employees' wages of $4,000.

7. Purchased a computer for $1,000 on credit.

8. Received a power bill for $200 which has not yet been paid.

9. Received a phone bill for $100 which was paid.

10. Contracted a company to print flyers and distribute them for a fixed fee of $500. The flyers have been printed and distributed but an invoice has not yet been received from the company.

11. Paid dividends of $1,000 to shareholders.

Cleaning Co. has a chart of accounts which includes the following accounts:

Accounts payable

Accounts receivable

Advertising expense

Capital stock

Cash

Computers

Cleaning equipment

Cleaning service fees

Dividends paid

Notes payable

Prepaid expense

Rent expense

Retained earnings

Unearned revenue

Utilities expense

Wages expense

Required:

a. Prepare the general journal for Cleaning Co. for the month of March 2011 and record all journal entries.

b. Post all journal entries to ledger accounts (hint - use T accounts).

c. Prepare a trial balance as at March 31, 2011.

d. Prepare a Balance Sheet, Income Statement and Statement of Retained Earnings for the month of March 2011.

e. What does the Income Statement tell you about Cleaning Co's first month of operations?

Posted Date: 3/18/2013 3:33:53 AM | Location : United States







Related Discussions:- Prepare a trial balance and income statement, Assignment Help, Ask Question on Prepare a trial balance and income statement, Get Answer, Expert's Help, Prepare a trial balance and income statement Discussions

Write discussion on Prepare a trial balance and income statement
Your posts are moderated
Related Questions
Is there two type of way to do balance sheet?

Ask questiJohn’s away at the moment, and his email provider has a size limit on the data that can be sent via email. What is a potential solution for John, and name a provider that

I want to do a custom dissertation on IAS 40 investment property which needs to include a brief outline, positive as well as negative international critique with respect to the sta

You have just started work for Warren Co. as part of the controller's group involved in current financial reporting problems. Jane Henshaw, controller for Warren, is interested in

GHH, Inc. has two classes of stock authorized: $100,000 par preferred and $1.00 par value common. As the begining of 20C, 200 shares of preffered stock and 300,000 shares of common

The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is con

“Ledger is said to be the principal book entry and the transactions can even be directly entered into the ledger account.” Elaborate and explain why journal is necessary.

On January 1, 2012, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January

Surviving Spouse - This is a person whose wife or husband died during tax year. A surviving spouse can file a JOINT RETURN for the year in which death occurred. Additionally a join

How to prepare a bond amortization sheet