Joeâs Snow PlowingCompany has the following transactions for theyear:
December 1 â Issued 10,000 shares of capital stock for $100,000to start a snow plowing business.
December 1 - Paid a one year insurance premium costing$7,200.
December 1 - Purchased a snow plow costing $42,000. Paid cash of$22,000 and signed a 3 year, 6% note for the balance. Interest isto be paid annually. The balance of the note will be paid at theend of its term. It is estimated that the snow plow last 4 yearsand will have a $6,000 value after 4 years.
December 3 â Purchased $8,000 of supplies on credit. Picked upthe supplies on the same day.
December 10 - Paid gas expense of $2,000.
December 12 - Purchased supplies costing $1,800 on credit.Picked up the supplies on the same day.
December 18 â Plowed 18 driveways totaling $32,000 and billedcustomers.
December 23 â Plowed 3 driveways and billed customers$1,800.
December 28 - Received $22,000 from customers for drivewaysplowed in #7..
December 28 â Ordered supplies costing $8,000 to be delivered inJanuary.
December 31 - Paid for supplies purchased in #6.
Paid employees $6,000 wages.
December 31 - Received $5,000 for a snow plowing job to be donein January next year.
December 31 - Paid a $0.25 per share dividend.
Required:
1. Prepare journal entries for the abovetransactions.
2. Post the above transactions to the ledger (use TAccounts).
3. Prepare a Trial Balance.
4. Prepare adjusting entries in journal format and postto the ledger (T Accounts). Following additional information isprovided:
Supplies on Hand December 31 was $4,000.
Wages owed but not paid on December 31 was$2,000.
Hint: Plus adjusting entries for depreciation, insuranceand interest.
5. Prepare an Adjusted Trial Balance.
6. Prepare an Income Statement, Statement of RetainedEarnings and a Balance Sheet.
7. Prepare closing entries in journal format and post tothe ledger (T Accounts).
8. Prepare a Post-Closing Trial Balance.