Completing the Accounting Cycle

The chart of accounts for Anya’s 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

1. Journalize and post the July transactions, Use page J1 for the journal and the three column form of account.
2. Prepare a trial balance at July 31 on a worksheet.
3. Enter the following adjustments on the worksheets and complete the worksheet.
   
   1. Unbilled and uncollected revenue for service performed at July 31 were $2,700.
   2. Depreciation on equipment for the month was $500.
   3. One-twelfth of the insurance expired.
   4. An inventory count shows $600 of cleaning supplies on hand at July 31.
   5. Accrued but unpaid employees salaries were $1,000.
4. Prepare the income statement and owner’s equity statement for July and a classified balance sheet at July 31.
5. Journalize and post adjusting entries. Use page J2 for the journal.
6. Journalize and post closing entries and complete the closing process. Use page J3 for the journal.
7. Prepare a post-closing trial balance at July 31.

Solution