John’s House Painting Company - Financial statements

Unit 3 Assignment

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.