Question

accounting cycle

MARSHALL COMPANY On April 1, Ralph Marshall opened Marshall Company. The company provides services to a variety of clients. The company was organized as a corporation and has a monthly accounting period. The following transactions occurred during April Apr. 1 Apr. 1 Apr. 1 Marshall invested $20,000 cash in the company in exchange for its common stock. The company paid $1,000 cash to rent office space for April The company paid $1,440 cash for the premium on a 12-month insurance policy. Coverage begins on April 1. The company performed services for a client and received $2,000 cash. The company purchased $700 of supplies on account. The company paid $500 cash for salary earned by an employee. The company performed $1,900 in services for a client. The client must pay within 30 Apr. 4 Apr. 7 Apr. 14 Apr. 24 days. Apr. 28 Apr. 30 Apr. 30 The company paid $500 cash for salary earned by an employee. The company paid $200 cash for this month's utility bill. The company paid $800 cash in dividends. The company's chart of accounts follows: CHART OF ACCOUNTS REVENUES Service Revenue ASSETS Cash Accounts Receivable Supplies Prepaid Insurance EXPENSES Salary Expense Rent Expense Supplies Expense Utilities Expense Insurance Expense LIABILITIES Accounts Payable Salary Payable CLEARING Income Summary EQUITY Common Stock Retained Earnings DIVIDENDS Dividends Adjustment Data 1. As of April 30, the company has incurred $100 of unpaid and unrecorded salary. 2. As of April 30, $120 of insurance coverage has expired. 3. As of April 30, the company has $570 of supplies remaining.

Answer 1

Marshall Company
Journal entries
Date	Account	Debit	Credit	Calculation
1-Apr	Cash	$     20,000
	Common Stock		$     20,000
1-Apr	Rent expense	$        1,000
	Cash		$        1,000
1-Apr	Prepaid Insurance	$        1,440
	Cash		$        1,440
4-Apr	Cash	$        2,000
	Service Revenue		$        2,000
7-Apr	Supplies	$           700
	Accounts Payable		$           700
14-Apr	Salary expense	$           500
	Cash		$           500
24-Apr	Accounts Receivable	$        1,900
	Service Revenue		$        1,900
28-Apr	Salary expense	$           500
	Cash		$           500
30-Apr	Utilities expense	$           200
	Cash		$           200
30-Apr	Dividends	$           800
	Cash		$           800
Adjusting entries
30-Apr	Salary expense	$           100
	Salary Payable		$           100
30-Apr	Insurance expense	$           120
	Prepaid Insurance		$           120
30-Apr	Supplies expense	$           130		=700-570
	Supplies		$           130
Closing entries
30-Apr	Service Revenue	$        3,900
	Income Summary		$        3,900
30-Apr	Income Summary	$        2,550
	Salary expense		$        1,100
	Rent expense		$        1,000
	Supplies expense		$           130
	Utilities expense		$           200
	Insurance expense		$           120
30-Apr	Income Summary	$        1,350
	Retained Earnings		$        1,350
30-Apr	Retained Earnings	$           800
	Dividends		$           800

Date Debit Date Credit Accounts Receivable 24-Apr $ 1,900 Date Debit Date Credit Supplies 7-Apr $ 700 30-Apr $ 130 Date Debit Date Credit Prepaid Insurance 1-Apr $ 1,440 30-Apr $ 120 Marshall Company T Accounts Date Debit Date Credit Cash 1-Apr $ 20,000 1-Apr $ 1,000 4-Apr $ 2,000 1-Apr $ 1,440 14-Apr $ 500 28-Apr $ 500 30-Apr $ 200 30-Apr $ 800 Bal. Bal. Bal. $ 17,560 Accounts Payable 7-Apr $ $ 1,900 Salary Payable 30-Apr $ $ 570 Common Stock 1-Apr $ 20,000 Bal. $ 1,320 Retained Earnings 30-Apr $ 800 30-Apr $ 1,350 700 100 700 Bal. $ Dividends 800 30-Apr $ Bal. $ 100 Income Summary 30-Apr $ 2,550 30-Apr $ 3,900 30-Apr $ 1,350 30-Apr $ 800 Bal. $20,000 Service Revenue 4-Apr $ 2,000 24-Apr $ 1,900 30-Apr $ 3,900 Bal. $ 550 Salary expense 14-Apr $ 500 28-Apr $ 500 30-Apr $ 100 30-Apr $ 1,100 S - Bal. S - Bal. $ - Rent expense 1-Apr $ 1,000 30-Apr $1,000 Bal. $ - Supplies expense 30-Apr $ 130 30-Apr $ 130 Utilities expense 30-Apr $ 200 30-Apr $ 200 Insurance expense 30-Apr $ 120 30-Apr $ 120 Bal. $ . Bal. $ . Bal. $ . Bal. $ -

Unadjusted TB Debit Credit 17,560 1,900 700 1,440 700 Adjusted TB Debit Credit 17,560 1,900 570 1,320 700 100 20,000 Marshall Company Account Names Cash Accounts Receivable Supplies Prepaid Insurance Accounts Payable Salary Payable Common Stock Retained Earnings Dividends Service Revenue Salary expense Rent expense Supplies expense Utilities expense Insurance expense Totals Post Closing TB Debit Credit 17,560 1,900 570 1,320 700 100 20,000 550 20,000 800 800 3,900 3,900 1,000 1,000 1,100 1,000 130 200 200 24,600 24,600 120 24,700 24,700 21,350 21,350

3,900 Marshall Company Income Statement For the Month Ended April 30 Revenues Service Revenue Expenses Salary expense Rent expense Supplies expense Utilities expense Insurance expense Total Expenses Net Income 1,100 1,000 130 200 120 2,550 1,350 Statement of Retained Earnings For the Month Ended April 30 Retained Earnings, April 1 + Net Income - Dividends Retained Earnings, April 30 1,350 (800) 550

Marshall Company Balance Sheet As of April 30 Assets Cash Accounts Receivable Supplies Prepaid Insurance Total Assets 17,560 1,900 570 1,320 21,350 Liabilities & Stockholders Equity Liabilities Accounts Payable Salary Payable Total Liabilities 700 100 800 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 20,000 550 20,550 21,350