Question

Do all parts A-i

The Accounting Cycle: Statements and Closing Entries Chapter 6 Case Study CS-1 LO 1 2 3 4 Grindstone Paving provides residential and commercial paving services. Its balance sheet at the end of June 2018 is shown below, along with its chart of accounts Grindstone Paving Balance Sheet As at June 30, 2018 Assets Liabilities Cash $7.580 Accounts Payable $15,800 Accounts Receivable 6,000 Unearned Revenue 6,200 Prepaid Insurance 1,800 Notes Payable 22.000 Equipment 55,000 Total Liabilities 44,000 Owner's Equity Stone, Capital 26,380 Total Assets $20.380 Total Liabilities and Owner's Equity $70 380 Account Account 400 101 105 110 120 125 Account Description ASSETS Cash Accounts Receivable Prepaid Insurance Equipment Accumulated Depreciation Equipment LIABILITIES Accounts Payable Interest Payable Salary Payable Unearned Revenue Notes Payable OWNER'S EQUITY Stone, Capital Stone Withdrawals Income Summary Account Description REVENUE Service Revenue EXPENSES Advertising Expense Depreciation Expense Insurance Expense Interest Expense Salaries Expense Telephone Expense SOO $10 515 520 545 550 200 205 210 215 220 300 310 315 For the month of July 2018, Grindstone Paving had the following transactions Jul 1 The owner invested $8,000 cash into the business Jul 2 Received $2.530 cash for work that will be provided in August Jul 5 Received an advertising bill for $600, which will be paid next month Jul 8 Paid the $350 telephone bill with cash Jul 10 Provided $4,680 worth of services to customers who will pay later Jul 14 Purchased equipment with $8,200 cash Jul 20 Received $2,350 in payment from customers paying their accounts Jul 22 Pald $1,970 toward accounts payable Jul 24 Paid $1,300 toward principal of the note payable Jul 28 Pald salary of $2.400 to an employee Jul 30 The owner withdrew $2,200 cash for personal use 259

Answer 1

84 Debit Credit 85 8,000 Date Account Title & Explanation 01-Jul Cash Stone, Capital (To record amount invested in business) 86 8,000 87 88 2,530 89 90 02-Jul Cash Accounts Receivable (To record cash received) 2,530 91 92 93 600 94 05-Jul Advertising expense Accounts Payable (To record accrued advertising expense) 600 95 96 97 350 98 08-Jul Telephone expense Cash (To record payment of Telephone bill) 350 99 100 101 4,680 10-Jul Accounts Receivable Service Revenue (To record services provided on account) 102 103 4,680

105 8,200 106 14-Jul Equipment Cash (To record purchase of Equipment) 8,200 107 108 109 2,350 110 20-Jul Cash Accounts Receivable (To record cash received) 2,350 111 112 113 1,970 114 22-Jul Accounts Payable Cash (To record amount paid to accounts payable) 1,970 115 1,300 24-Jul Notes Payable Cash (To record amount paid to accounts payable) 1,300 116 117 118 119 120 121 122 123 2,400 28-Jul Salaries expense Cash (To record salaries expense) 2,400 124 2,200 125 126 127 30-Jul Stone, Withdrawls Cash (To record amount withdrawn) 2,200

129 Solution of part A and B 130 PR DR. 8,000 2,530 131 GENERAL LEDGER 132 Cash 133 Date Description 134 01-Jul Balance 135 01-Jul Stone's Capital 136 02-Jul Accounts Receivable 137 08-Jul Telephone expense 138 14-Jul Equipment 139 20-Jul Accounts Receivable 140 22-Jul Accounts Payable 141 24-Jul Notes Payable 142 28-Jul Salaries expense 143 30-Jul Stone, Withdrawls 144 145 Accounts Receivable 146 Date Description 147 01-Jul Balance 148 02-Jul Cash 149 10-Jul Service Revenue 150 20-Jul Cash GL No.101 CR. Balance 7,580 Dr. 15,580 Dr. 18,110 Dr. 350 17,760 Dr. 8,200 9,560 Dr. 11,910 Dr. 1,970 9,940 Dr. 1,300 8,640 Dr. 2,400 6,240 Dr. 2,200 4,040 Dr. 2,350 PR DR. GL No. 105 CR. Balance 6,000 Dr. 2,530 3,470 Dr. 8,150 Dr. 2,350 5,800 Dr. 4,680

PR DR. GL No.110 CR. Balance 1,800 Dr. 100 1,700 Dr. PR DR. GL No.120 CR. Balance 55,000 Dr. 63,200 Dr. 8,200 152 Prepaid Insurance 153 Date Description 154 01-Jul Balance 155 31-Jul Insurance expense 156 157 Equipment 158 Date Description 159 01-Jul Balance 160 14-Jul Cash 161 162 Accumulated Depreciation - Equipment 163 Date Description 164 31-Jul Depreciation expense 165 166 Accounts Payable 167 Date Description 168 01-Jul Balance 169 05-Jul Advertising expense 170 22-Jul Cash 171 172 Interest Payable 173 Date Description 174 31-Jul Interest expense PR DR. GL No.125 CR. Balance 450 450 Cr PR DR. GL No.200 CR. Balance 15,800 Cr. 600 16,400 Cr. 14,430 Cr. 1,970 PR DR. GL No.205 CR. Balance 75 75 Cr.

PR DR. GL No.210 CR. Balance 500 500 Cr. PR DR. GL No.215 CR. Balance 6,200 Cr. 5,580 Cr. 620 PR DR. 176 Salary Payable 177 Date Description 178 31-Jul Salaries expense 179 180 Unearned Revenue 181 Date Description 182 01-Jul Balance 183 31-Jul Sevice Revenue 184 185 Notes Payable 186 Date Description 187 01-Jul Balance 188 24-Jul Cash 189 190 Stone , Capital 191 Date Description 192 01-Jul Balance 193 01-Jul Cash 194 195 Stone, Withdrawls 196 Date Description 197 30-Jul Cash GL No.220 CR. Balance 22,000 Cr. 20,700 Cr. 1,300 PR DR. GL No.300 CR. Balance 26,380 Cr. 8,000 34,380 Cr. PR DR. GL No.310 CR. Balance 2,200 Dr. 2,200

GL No. 315 CR. Balance PR DR. PR DR. GL No.400 CR. Balance 4,680 4,680 Cr. 620 5,300 Cr. PR DR. GL No.500 CR. Balance 600 Dr. 600 200 Income Summary 201 Date Description 202 203 Service Revenue 204 Date Description 205 10-Jul Accounts Receivable 206 31-Jul Unearned Revenue 207 208 Advertising Expense 209 Date Description 210 05-Jul Accounts Payable 211 212 Depreciation expense 213 Date Description 214 31-Jul Accumulated Depreciation - Equipment 215 216 Insurance expense 217 Date Description 218 03-Jul Prepaid Insurance 219 220 Interest expense 221 Date Description 222 31-Jul Interest Pavable GL No.510 CR. Balance PR DR. 450 450 Dr. PR DR. GL No.515 CR. Balance 100 Dr. 100 PR DR. GL No.520 CR. Balance 75 Dr. 75

PR DR. GL No.545 CR. Balance 2,400 Dr. 2,900 Dr. 2,400 500 224 Salaries expense 225 Date Description 226 28-Jul Cash 227 31-Jul Salaries Payable 228 229 Telephone expense 230 Date Description 231 08-Jul Cash PR DR. GL No.550 CR. Balance 350 Dr 350

Solution of Part C Adjustments Dr. Cr. 233 234 235 236 237 238 239 240 241 242 243 244 245 Unadjusted Trial Balance Dr. Cr. 4,040 5,800 1,800 63,200 100 450 14,430 Adjusted Trial Balance Dr. Cr. 4,040 5,800 1,700 63,200 450 14,430 75 500 5,580 20,700 34,380 2,200 5,300 600 75 500 Cash Accounts Receivable Prepaid Insurance Equipment Accumulated Depreciation - Equipment Accounts Payable Interest Payable Salary Payable Unearned Revenue Notes Payable Stone , Capital Stone, Withdrawls Service Revenue Advertising Expense Depreciation expense Insurance expense Interest expense Salaries expense Telephone expense Total 620 6,200 20,700 34,380 246 247 2,200 248 4,680 620 249 600 450 450 250 251 100 100 252 75 75 2,900 2,400 500 253 254 255 350 350 80.390 80.390 1.745 1.745 81.415 81.415

571 58 Note; As per HOMEWORKLIB POLICY We are allowed to answer first question when there are multiple questions. However I have solved first three questions. 59 60 61