Reference no: EM132674500

Problem - Dennis' Concrete Finishing completed the following transactions during the month of August of the current year:

Aug 1 Purchased a new mixing machine for $22,500 paying cash of $2,500 and signing a 6 month note payable for the remainder at 5% interest. Interest and principle due at maturity. The machine will have a 5 year useful life and then it will have a value of $0.

Aug 4 Dennis (owner) withdrew $12,000 excess cash from the company to purchased a new snowmobile for personal use.

Aug 4 Completed finishing work for a client. $1,700 on account.

Aug 5 Purchased finishing tools for $1,100 on account.

Aug 10 Received payment of $800 in advance for work to be performed next month.

Aug 15 Paid annual insurance premiums of $3,500 which provides coverage for a one-year period expiring next year.

Aug 21 Paid for items purchased on August 5.

Instructions -

a) Prepare journal entries to record the transactions. You may omit explanations of the transactions.

b) Prepare the adjusting entries required for the Dec 31 year end.

c) Prepare T accounts on the attached page.

d) Prepare the appropriate closing entries.