COMPREHENSIVE ACCOUNTING CASE

Basic Accounting
BU1102
Comprehensive Problem
Term 2
Instructor: W.R. Allman, Ed.D.

Student Name:_____________________________________
 New Era Cleaning Service, Inc. opened for business on
July 1, 2010. During the month of July, the following transactions occurred:

July 1 Issued $18,000 of common stock for $18,000 cash.

July 1 Purchased a truck for $11,000. Paid $4,000 in cash and borrowed the rest (long term) from the bank.

July 3 Purchased cleaning supplies for $900 on account.

July 5 Paid $1,800 on a one-year insurance policy, effective July 1.

July 12 Billed customers $4,800 for cleaning services.

July 18 Paid $1,500 of the amount owed on the truck.

July 18 Paid $500 of the amount owed on cleaning supplies.

July 20 Paid $1,700 for employee salaries.

July 21 Collected $1,200 from customers billed on July 12.

July 25 Billed customers $1,900 for cleaning services.

July 31 Paid gas and oil for the month on the truck, $500.

July 31 Paid a $800 dividend.

Instructions:

Unit 2 Post July transactions to the general journal and general ledger 'T' accounts

Unit 3 Prepare an unadjusted trial balance

Unit 3 Post the following adjustments

(a) Earned but unbilled fees at July 31 were $1,400
(b) Depreciation for the month was $200
(c) One-twelfth of the insurance expired
(d) An inventory count showed $300 of cleaning supplies remaining on July 31.
(e) Accrued but unpaid employee salaries were $500.

Unit 3 Prepare an adjusted trial balance

Unit 4 Post closing entries

Unit 4 Prepare a classified balance sheet and an income statement as of July 31.
Journal # Date Accounts and Description Debit Credit
Debit Credit

#1 7/1/2012 Cash $18,000

Issued common stock for Common Stock $18,000
cash

#2 7/1/2012 Truck 11,000

Partially paid in cash with Cash 4,000
balance borrowed from bank Notes Payable 7,000

#3 7/3/2012 Cleaning Supplies 900

Purchased on account Accounts Payable 900

#4 7/5/2012 Insurance Expense 1,800

Annual Insurance, effective Cash 1,800
date July 1, 2012

#5 7/12/2012 Accounts Receivable 4,800

Billed customers for Service Revenue 4,800
cleaning services

#6 7/18/2012 Notes Payable 1,500

Paid toward bank loan of Cash 1,500
of July 1 for truck

#7 7/18/2012 Accounts Payable 500

Paid toward supplies Cash 500
purchased July 3

#8 7/20/2012 Salaries / Payroll 1,700

Paid for employee salaries Cash 1,700

#9 7/21/2012 Cash 1,200

Collected from customers Accounts Receivable 1,200
billed on July 12

#10 7/25/2012 Accounts Receivable 1,900

Billed customers for Service Revenue 1,900
cleaning services

#11 7/31/2012 Gas and Oil Expense 500

Paid gas and oil for truck Cash 500
month of July

#12 7/31/2012 Dividend 800

Paid a dividend Cash 800
Adjusting entries:

(a)

(b)

(c )

(d)

(e)
 Cash Accounts Receivable Pre-Paid Insurance Supplies
Debit Credit Debit Credit Debit Credit Debit Credit
18,000 4,800 1,800 900
4,000 1,200
1,800 1,900
1,500 5,500
500
1,700
1,200
500
800
8,400

Equipment: Truck Accum. Depreciation Accounts Payable Bank Loan

Debit Credit Debit Credit Debit Credit Debit Credit
11,000 500 900 1,500 7,000

400 5,500

Revenue Gas & Oil Expense Salaries Expense

Salaries Payable Debit Credit Debit Credit Debit Credit
Debit Credit 4,800 500 1,700
1,700 1,900

6,700

Insurance Expense Supplies Expense Depreciation Expense Income Summary

Debit Credit Debit Credit Debit Credit Debit Credit
1,800 900
Common Stock Dividend Retained Earnings
Debit Credit Debit Credit Debit Credit
18,000 800
 Happy Workers Cleaning Service

Unadjusted Adjusted
Account Beginnng Balance Trial Balance Adjusting Entries Trial Balance
Debit Credit Debit Credit Debit Credit Debit Credit

Cash 0
Accounts Receivable 0
Cleaning Supplies 0
Prepaid Insurance 0
Equipment 0
Accumulated Deprec. 0

Accounts Payable 0
Salaries Payable 0
Bank Loan 0

Common Stock 0
Retained Earnings 0
Dividends 0

Service Revenue 0
Gas & Oil Expense 0
Cleaning Supplies Exp 0
Depreciation Expense 0
Insurance Expense 0
Salaries Expense 0
New Era Cleaning Service
Income Statement for period of July 1 through July 31, 2010

Revenue

Less: Expenses
Salaries
Cleaning Supplies
Gas & Oil
Depreciation
Insurance
Total Expenses

Net Income
 New Era Cleaning Service
Balance Sheet as of July 31, 2010

Assets
Current Assets
Cash
Accounts Receivable
Cleaning Supplies
Pre-paid Insurance
Total Current Assets

Long Term Assets

Truck-Equipment
less: Accumulated Depreciation
Total Long Term Assets

Total Assets

Liabilities
Current Liabilities
Accounts Payable
Salaries Payable
Total Current Liabilities

Long Term Liabilities

Bank Loan
Total Long Term Liabilities

Total Liabilities

Owners' Equity
Common Stock
Retained Earnings
Beginning Retained Earnings
Net Income
less: Dividends
Ending Retained Earnings

Total Owners' Equity

Total Liabilities and Owners' Equity