Question

Transaction Entries, Posting, Trial Balance, and Adjusting Entries Mark Ladd opened Ladd Roofing Service on April 1. Transactions for April are as follows:

1	Ladd contributed his personal funds in exchange for
	common stock to begin the business.	$11,600
2	Purchased a used truck for cash.	6,200
3	Purchased ladders and other equipment for a total of	3,200
	Paid cash of $1,100, with the balance due in 30 days.
4	Paid two-year premium on liability insurance.	2,880
5	Purchased supplies on account	1,300
6	Received an advance payment from a customer for
	roof repair work to be done in April and May.	1,900
7	Billed customers for roofing services.	5,600
8	Collected on account from customers.	5,000
9	Paid bill for truck fuel used in April.	85
10	Paid April newspaper advertising.	200
11	Paid assistants' wages.	2,600
12	Billed customers for roofing services.	4,100

Required
a. Set up a general ledger with the following accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Trucks; Accumulated Depreciation-Trucks; Equipment; Accumulated Depreciation-Equipment; Accounts Payable; Unearned Roofing Fees; Common Stock; Retained Earnings; Roofing Fees Earned; Fuel Expense; Advertising Expense; Wages Expense; Insurance Expense; Supplies Expense; Depreciation Expense-Trucks; and Depreciation Expense-Equipment.

b. Record these transactions in the general journal and post to the ledger accounts.

c. Prepare an unadjusted trial balance as of April 30.

d. Prepare the journal entries to adjust the books for insurance expense, supplies expense, depreciation expense on the truck, depreciation expense on the equipment, and roofing fees earned. Supplies on hand on April 30 amounted to $500. Depreciation for April was $125 on the truck and $35 on the equipment. One-fourth of the roofing fee received in advance was earned by April 30. Post the adjusting entries.

Answer 1

b.

No.	Account Titles and Explanation	Debit	Credit
1	Cash	11600
	Common stock		11600
	(To record issue of common stock)
2	Trucks	6200
	Cash		6200
	(To record purchase of truck)
3	Equipment	3200
	Cash		1100
	Accounts payable		2100
	(To record equipment purchased)
4	Prepaid insurance	2880
	Cash		2880
	(To record prepaid insurance)
5	Supplies	1300
	Accounts payable		1300
	(To record supplies purchased on credit)
6	Cash	1900
	Unearned roofing fees		1900
	(To record advance received from customer)
7	Accounts receivable	5600
	Roofing fees earned		5600
	(To record billing to customers for fees earned)
8	Cash	5000
	Accounts receivable		5000
	(To record collection on account)
9	Fuel expense	85
	Cash		85
	(To record fuel expenses paid)
10	Advertising expense	200
	Cash		200
	(To record advertising expense paid)
11	Wages expense	2600
	Cash		2600
	(To record wages paid)
12	Accounts receivable	4100
	Roofing fees earned		4100
	(To record billing to customers for fees earned)

a.,b. & e.

Cash					Accounts Receivable
1	11600	6200	2		7	5600	5000	8
6	1900	1100	3		12	4100
8	5000	2880	4
		85	9		Bal.	4700
		200	10
		2600	11
Bal.	5435
Supplies					Prepaid Insurance
5	1300	800	Apr. 30		4	2880	120	Apr. 30
Bal.	500				Bal.	2760
Trucks					Accumulated Depreciation-Trucks
2	6200						125	Apr. 30
Equipment					Accumulated Depreciation-Equipment
3	3200						35	Apr. 30
Accounts Payable					Unearned Roofing Fees
		2100	3		Apr. 30	475	1900	6
		1300	5
Bal.		3400			Bal.		1425
Common Stock					Retained Earnings
		11600	1
Roofing Fees Earned					Fuel Expense
		5600	7		9	85
		4100	12
		475	Apr. 30
Bal.		10175
Advertising Expense					Wages Expense
10	200				11	2600
Insurance Expense					Supplies Expense
Apr. 30	120				Apr. 30	800
Depreciation Expense-Trucks					Depreciation Expense-Equipment
Apr. 30	125				Apr. 30	35

c.

Ladd Roofing Service
Unadjusted Trial Balance
April 30
Account	Debit	Credit
Cash	5435
Accounts receivable	4700
Supplies	1300
Prepaid insurance	2880
Trucks	6200
Accumulated depreciation-trucks		0
Equipment	3200
Accumulated depreciation-equipment		0
Accounts payable		3400
Unearned roofing fees		1900
Common stock		11600
Retained earnings
Roofing fees earned		9700
Fuel expense	85
Advertising expense	200
Wages expense	2600
Insurance expense	0
Supplies expense	0
Depreciation expense-trucks	0
Depreciation expense-equipment	0
Total $	26600	26600

d.

Date	Account Titles and Explanation	Debit	Credit
Apr. 30	Insurance expense ($2880/24)	120
	Prepaid insurance		120
	(To record prepaid insurance expired)
30	Supplies expense ($1300 - $500)	800
	Supplies		800
	(To record supplies used)
30	Depreciation expense-trucks	125
	Accumulated depreciation-trucks		125
	(To record depreciation on trucks)
30	Depreciation expense-equipment	35
	Accumulated depreciation-equipment		35
	(To record depreciation on equipment)
30	Unearned roofing fees	475
	Roofing fees earned ($1900/4)		475
	(To record roofing fees earned)