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Neko Case decides to open a cleaning and laundry service near the local college campus that
will operate as a sole proprietorship. Neko Case incurred the following transactions during the
month of June 2020.
June 1 Neko Case invested $20,000 in cash to start a cleaning and laundry business on June 1.
June 2 Purchased equipment for $5,000 paying $3,000 in cash and the remainder due in 30
days.
June 5 Purchased supplies for $1,200 cash.
June 10 Received a bill from College News for $300 for advertising in the campus newspaper.
June 12 Cash receipts from customers for cleaning and laundry amounted to $2,400.
June 20 Billed the Lion Soccer Team $450 for cleaning and laundry services.
June 25 Paid $300 to College News for advertising that was previously billed in Transaction 4.
June 28 Neko Case withdrew $1,500 from the business for living expenses.
June 30 Incurred utility expenses for month on account, $500.
June 30 Paid salaries of $600 to student workers.
Other data:
a) The office equipment has an estimated useful life of 50 months with zero salvage value
b) The physical count revealed $200 supplies on hand at the end of the month.
Requirements:
5) Prepare necessary adjusting entries on June 30, 2020
6) Enter the trial balance on a worksheet and complete the worksheet.
7) Prepare an income statement for the month ended June 30, 2020, an owners equity
statement on June 30, 2020 and a balance sheet on June 30, 2020.
8) Prepare necessary closing entries on June 30, 2020.
9) Prepare a post-closing trial balance on June 30, 2020
Answer & Explanation
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