John’s House Painting Company has the following transactions for the year
1. December 1 – Issued capital stock for $100,000 to start a house painting business.
2. December 1 - Paid one year insurance premium costing $4,800.
3. December 1 - Paid gas expense $200.
4. December 1 - Purchased equipment costing $4,800 on credit.
5. December 12 - Purchased supplies costing $800 on credit.
6. December 18 - Painted three houses totaling $12,000 and billed customers.
7. December 23 - Painted three rooms and billed customers $500.
8. December 28 - Received $2,000 for houses painted in #6.
9. December 31 - Paid for equipment purchased in #4.
10. December 31 - Received $1,000 for a job to paint a house in January next year.
11. December 31 - Paid a $1,000 dividend.
Required:
1. Prepare journal entries for the above transactions.
2. Post the above transactions to T Accounts.
3. Prepare a Trial Balance.
4. Prepare adjusting entries in journal format and post to T Accounts.
Supplies on Hand December 31 was $400.
The Equipment is to be depreciated over 48 months starting with December.
(HINT; Record one month depreciation expense).
Wages owed but not paid on December 31 was $200.
One month of insurance has expired.
5. Prepare an Adjusted Trial Balance.
6. Prepare an Income Statement, Statement of Retained Earnings and a Balance Sheet.
7. Prepare closing entries in journal format and post to the T Accounts.
8. Prepare a Post-Closing Trial Balance.