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Chapter 6 The Accounting Cycle: Statements and Closing Entries AP-8B LO 123 Space Jam Storage offers storage space and delivery services for customers. Space Jam Storage has already completed most of the transactions for the month and posted them to the general ledger. The following transactions during December 2019 have not yet been prepared. Dec 2 Prepaid $12,000 for one year of insurance in advance Dec 5 Paid $1,400 cash for regular maintenance on delivery vehicles Dec 12 The owner, Stephen Bugs, withdrew $3,500 cash from the business for personal use Dec 18 Received $2,200 cash payment from a customer for future storage services Dec 23 Paid $1,000 to reduce the bank loan, of which $870 was principal and the rest was interest Dec 28 Received S450 cash from a customer who owed money for previous services Required a) Prepare the journal entries for the transactions for the month of December. The chart of accounts is on the next page Date Account Title and Explanation PR Debit Credit 101 The Accounting Cycle: Statements and Closing Entries Chapter b) Post the journal entries from parta) to the general ledger. The chart of accounts is shown below for your reference Account Description Account # Account Description Account + ASSETS OWNER'S EQUITY Cash Bugs. Capital 300 Accounts Receivable 105 Bugs. Withdrawals 310 Prepaid Insurance 110 Income Summary 315 Equipment 120 Accumulated Depreciation-Equipment 125 REVENUE Service Revenue 400 LIABILITIES Accounts Payable 200 EXPENSES Salaries Payable 2101 Maintenance Expense 500 Unearned Revenue 220 Depreciation Expense 520 Bank Loan 250 Interest Expense 540 Insurance Expense 560 Salaries Expense 570 General Ledger Account: Cash GL No: 101 Date Description PR DR CR Balance 2019 Opening Balance 18,500 DR Account: Accounts Receivable Date Description 2019 Opening Balance PR DR CR GL No: 105 Balance 3,200 DR Account: Prepaid Insurance Date Description 2019 Opening Balance PR DR CR GL No: 110 Balance 1,00d DR PR DR CR GL No: 120 Balance 285 000 DR Account: Equipment Date Description 2019 Opening Balance Account: Accumulated Depreciation-Equipment Date Description 2019 Opening Balance PR DR CR GL No: 125 Balance 45,000 CR Account: Accounts Payable Date Description 2019 Opening Balance PR DR CR GL No: 200 Balance 5.500 CR Account: Salaries Payable Date Description 2019 Opening Balance PR DR CR GL No: 210 Balance d CR Account: Unearned Revenue Date Description 2019 Opening Balance PR DR CR GL No: 220 Balance 1,400 CR Account: Bank Loan Date Description 2019 Opening Balance PR DR CR GL No: 250 Balance 192.550 CR Account: Bugs, Capital Date Description 2019 Opening Balance PR DR CR GL No: 300 Balance 46,200 CR Account: Bugs. Withdrawals Date Description 2019 Opening Balance PR DR CR GL No: 310 Balance 10,000 DR Account: Income Summary Date Description 2019 Opening Balance PR DR CR GL No: 315 Balance CCR Account: Service Revenue Date Description 2019 Opening Balance PR DR CR GL NO: 400 Balance 78.000 CR Account: Maintenance Expense Date Description 2019 Opening Balance PR DR CR GL No: 500 Balance 3,800 DR Account: Depreciation Expense Date Description 2019 Opening Balance PR DR CR GL No: 520 Balance 4,000 DR The Accounting Cycie: Statements and Closing Entries Chapter 6 Account: Interest Expense Date Description 2019 Opening Balance PR DR CR GL No: 540 Balance 1.150 DR Account: Insurance Expense Date Description 2019 Opening Balance PR DR CR GL No: 560 Balance 11.000 DR Account: Salaries Expense Date Description 2019 Opening Balance PR DR CR GL No: 570 Balance 31,000 DR c) Prepare a six-column worksheet, starting with the account balances from the general ledger in part b). Space Jam Storage had the following year-end adjustments. Dec 31Provided $1,500 worth of services to customer who had previously paid in advance Dec 310ne month of insurance worth $1,000 has been used Dec 310ne month of depreciation is $500 Dec 31Accrued salaries owed to employees worth $3.370 Adjustments Unadjusted Trial Balance DR CR Adjusted Trial Balance DR CR Account Title DR CR Chapter 6 d) Prepare the income statement for Space Jam Storage The Accounting Oy Statements and Closing Entes .) Prepare the statement of owner's equity for Space Jam Storage 1) Prepare the balance sheet for Space Jam Storage The Accounting Cycle: Statements and Closing Entries Chapter 6 g) Record the journal entries for the adjusting and closing transactions. Use the income summary method. Post these entries in the general ledger above from part b). Date Account Title and Explanation PR Debit Credit

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