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Problem 3-8A Complete the full accounting cycle (LO3-3, 3-4, 3-5, 3-6, 3-7)
The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances:
| Accounts | Debits | | Credits |
| Cash | $ | 17,500 | | | | | |
| Accounts Receivable | | 7,500 | | | | | |
| Supplies | | 3,500 | | | | | |
| Equipment | | 12,500 | | | | | |
| Accumulated Depreciation | | | | | $ | 4,000 | |
| Salaries Payable | | | | | | 6,000 | |
| Common Stock | | | | | | 22,500 | |
| Retained Earnings | | | | | | 8,500 | |
| Totals | $ | 41,000 | | | $ | 41,000 | |
| |
The following is a summary of the transactions for the year:
| 1. | | March | | 12 | | Provide services to customers, $55,000, of which $20,500 is on account. |
| 2. | | May | | 2 | | Collect on accounts receivable, $17,500. |
| 3. | | June | | 30 | | Issue shares of common stock in exchange for $4,000 cash. |
| 4. | | August | | 1 | | Pay salaries of $6,000 from 2020 (prior year). |
| 5. | | September | | 25 | | Pay repairs and maintenance expenses, $12,500. |
| 6. | | October | | 19 | | Purchase equipment for $7,500 cash. |
| 7. | | December | | 30 | | Pay $1,200 cash dividends to stockholders. |
Problem 3-8A Parts 1, 3, 6 and 10
Required:
1., 3., 6., & 10. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.
Answer & Explanation
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