Because Aqua Elite, Inc. is a new startup business, thebeginning balances in all the general ledger accounts arezero to start.
The length of the accounting periods are three months using a fiscal calendar year. (A fiscal calendar is on ayearly basis other than a calendar yearâ€”January 1st toDecember 31st. For example, a fiscal calendar year canbe May 1, 2009, through April 30, 2010). Therefore,posting to the general ledger, adjustments and closingentries are made on a fiscal quarterly basis.
Accounts Receivable and Accounts Payable subsidiaryledgers arenâ€™t being used. Any references to invoicing,receipts, or payments â€œon accountâ€ assume changes tothe running balance in the Accounts Receivable andAccounts Payable general ledger accounts.Payroll calculations arenâ€™t necessary. Assume the salaryis the gross pay with no deductions taken. Therefore, thenet pay is the same as the gross pay, requiring a simplifiedjournal entry to record the expense.
Use the information in the Chart of Accounts thatâ€™s providedafter the Requirements section below. Add generalledger accounts if necessary.
1. Journalize the transactions. Omit explanations.
2. Post the transactions to the general ledger, creating newledger accounts as necessary. Calculate the new generalledger account balances.
3. Prepare the unadjusted trial balance for Aqua Elite, Inc.,at the end of July.
4. Journalize and post the adjusting entries for July basedon the following adjustment information:
a. Record the expired rent.
b. Supplies on hand, $350.
c. Depreciation: $400 equipment, $210 furniture, $650vehicles.
d. Services performed but unbilled, $1,900.
e. Accrued salaries, $675.
f. Unearned service revenue earned as of July 31, $800.
5. Prepare an adjusted trial balance for Aqua Elite, Inc., atthe end of July.
6. Prepare the Income Statement, Statement of Retained
Earnings, and Balance Sheet for the three-month periodMay through July 20XX.
7. Prepare, journalize, and post closing entries.
8. Prepare a Post-Closing Trial Balance for the end of theperiod.
1 Mike invested $15,000 cash and a used truck worth $13,500 in the business in exchange
for company stock.
3 Paid $4,700 cash to purchase office equipment.
7 Purchased $860 of supplies on account.
12 Performed services for cash customers and received $850.
15 Paid salaries of $675 to the office receptionist.
16 Sold the company truck for $13,500.
18 Signed a note payable for $31,000 to purchase a new truck.
21 Performed $3,200 of services on account for a local hotel chain.
27 Paid $500 of the amount owed from the purchase of supplies on May 7.
30 Received $2,000 on account from credit customers.
31 Received the utility bill for the month of May, $480. The bill is not due until the 15th
31 Paid $1,000 dividends to the shareholder, XXXXX XXXXXson.
1 Paid receptionistâ€™s salary, $675.
2 Paid cash to acquire land for a future office site, $15,000.
3 Moved into a new location for the business and paid the first monthâ€™s rent, $1,800.
4 Performed service for a customer and received cash, $1,700.
5 Received $500 on account.
8 Purchased $750 of supplies on account.
11 Billed customers for services performed, $3,800.
13 Sold an additional $10,000 of stock to XXXXX XXXXXson.
16 Paid receptionistâ€™s salary, $675.
17 Received $1,350 cash for services performed.
18 Received $1,500 from customers on account.
19 Paid $325 to be listed in the yellow pages telephone directory.
21 Paid $1,000 on account.
22 Purchased office furniture on account, $3,300.
24 Paid miscellaneous expenses, $275.
26 Billed customers for services provided, $1,000.
28 Received $300 from customers on account.
30 Paid utility bill, $745.
30 Paid receptionistâ€™s salary, $675.
30 Paid $1,800 of dividends.
1 Paid three monthsâ€™ rent, $4,500.
4 Performed service for a customer and received cash, $2,100.
9 Received $3,600 from customers for services to be performed later.
12 Purchased $750 of supplies on account.
15 Billed customers for services performed, $2,800.
16 Paid receptionistâ€™s salary, $675.
22 Received $3,100 on account.
25 Paid $2,800 on account.
28 Received $1,200 cash for services performed.
30 Paid $600 of dividends.
â€¢ Balance Sheet
â€¢ Income Statement
â€¢ Statement of Retained Earnings
â€¢ Post-Closing Trial Balance