Prepare an income statement and a statement of owner equity

Assignment Help Accounting Basics

Reference no: EM132473555

Question - Alou Equipment Repair has a September 30 year end. The company adjusts and closes its accounts on an annual basis. On August 31, 2021, the account balances of Alou Equipment Repair were as follows:

ALOU EQUIPMENT REPAIR Trial Balance August 31, 2021
	Debit	Credit
Cash	$2,790
Accounts receivable	7,910
Supplies	8,500
Equipment	9,000
Accumulated depreciation-equipment		$1,800
Accounts payable		3,100
Unearned revenue		400
J. Alou, capital		21,200
J. Alou, drawings	15,600
Service revenue		49,600
Rent expense	5,500
Salaries expense	24,570
Telephone expense	2,230
	$76,100	$76,100

During September, the following transactions were completed:

Sept. 1 Borrowed $10,000 from the bank and signed a two-year, 5% note payable.

Sept. 2 Paid September rent, $500.

Sept. 8 Paid employee salaries, $1,050.

Sept. 12 Received $1,500 cash from customers on account.

Sept. 15 Received $5,700 cash for services performed in September.

Sept. 17 Purchased additional supplies on account, $1,300.

Sept. 20 Paid creditors $2,300 on account.

Sept. 21 Paid September telephone bill, $200.

Sept. 22 Paid employee salaries, $1,050.

Sept. 27 Performed services on account and billed customers for services provided, $900.

Sept. 29 Received $550 from customers for services to be provided in the future.

Sept. 30 Paid J. Alou $800 cash for personal use.

Adjustment data consist of the following:

Supplies on hand at September 30 cost $1,000.

Accrued salaries payable at September 30 total $630.

The equipment has an expected useful life of five years.

Unearned revenue of $450 is still not earned at September 30.

Interest is payable on the first of each month.

Required -

a. Prepare T accounts and enter the August 31 balances.

b. Journalize the September transactions.

c. Post to T accounts.

d. Prepare a trial balance at September 30.

e. Journalize and post adjusting entries.

f. Prepare an adjusted trial balance at September 30.

g. Prepare an income statement and a statement of owner's equity, and a classified balance sheet.

h. Prepare and post closing entries.

i. Prepare post-closing trial balance at September 30.

Reference no: EM132473555

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