complete the accounting cycle, assignment help

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Description

During its first month of operation, the Rawls Repair Company, which specializes in bicycle repairs, completed the following transactions:

Oct. 1   Owner, John Rawls, began business by investing $12,000 in exchange for common stock.

Oct. 1   Paid the premium on a one-year insurance policy, $1,200.

Oct. 1   Paid the current month's rent, $1,040.

Oct. 3   Purchased repair equipment from Conklin Company, $4,400 by signing a 2-year note.

Oct. 8   Purchased repair supplies from McKenna Company on credit, $390.

Oct. 19    Made partial-payment to McKenna Company, $200.

Oct. 20  Paid wages to part-time assistant, $500.

Oct. 31   Cash bicycle repair revenue for October, $2,672. (for simplicity, record this all at once,   rather than daily)

Oct. 31   The owner (and sole stockholder), John Rawls, was paid a dividend of $400.

Oct. 31 Received a bill for October utilities, $185, to be paid in November.

REQUIREMENT #1:

Prepare journal entries to record the October transactions in the Journal.

REQUIREMENT #2:

Post the October journal entries to the T-Accounts and compute ending balances.

REQUIREMENT #3:

Prepare a trial balance at October 31.

REQUIREMENT #4:

Prepare Oct. 31 adjusting entries in the Journal using the following information.

a) One month's worth of prepaid insurance has expired.

b) The remaining amount of repair supplies at month-end is $194.

c) The estimated monthly depreciation on repair equipment is $70.

d) Unpaid wages at Oct. 31 are $100.

Requirement #5:

Post your adjustments to the T-accounts and compute adjusted balances.

 (Just add to the October T-accts.)

Requirement #6:

Prepare an Adjusted Trial Balance.

Requirement #7:

Prepare the financial statements for Rawls Repair Company as of October 31:

Income Statement

Retained Earnings Statement

Classified Balance Sheet

Requirement #8:

Prepare the closing entries at October 31 in the Journal.

Requirement #9:

Post the closing entries to the T-accounts and compute ending balances.  (Just add to the adjusted balances already listed.)

Requirement #10:

Prepare a post-closing trial balance as of October 31.

project123.docx 

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Explanation & Answer

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Rawls Repair Company
Requirement # 1
Date

Description
1-Oct Cash

journal entries
Dr.
Cr.
12,000

Common stock
(to record investment in business)

12,000

1-Oct Prepaid insurance expense
cash
(to record prepaid isurance premium

1,200

1-Oct Rent

1,040

1,200

Cash
(to record rent expense)
3-Oct Repair equipment
Note payable
(to record purchase of equipment)
8-Oct Supplies
Account payable
(to record purchase of supplies)

1,040

4,400
4,400

390
390

19-Oct Accounts payable
Cash
(to record payment of accounts payable)

200

20-Oct Wages
Cash
(to record payment of wages)

500

31-Oct Cash

200

500

2,672

Revenue
(to record cash sales)

2,672

31-Oct Dividend
cash
(to record dividend payment)

400

31-Oct utilities
utilities payable

185

Requirement # 2

400

185

T-Accounts
Dr.
Common stock
Revenue

Cash
12,000 Prepaid insurance
2,672 Rent
Accounts payable
Wages
dividend
closing balnce(bal.)
14,672

Cr.
1,200
1,040
200
500
400
11,3...


Anonymous
Very useful material for studying!

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