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    Leonardo Wagster Decided To Open Wagster's Window Washing On September 1, 2020. in September, The Following Transactions Took Place

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    JohnMurray111
    Leonardo Wagster opened Wagster's Window Washing on September 1, 2020. During the month, he invested $29,000 cash and purchased a truck for $26,400, paying $6,400 cash and financing the remainder. Various business transactions occurred, including paying expenses, earning revenue, and withdrawing cash. Adjusting entries were made for insurance used, unbilled revenue, inventory, accrued salaries, interest on financing, and services provided in advance. Financial statements were prepared, including an income statement, balance sheet, and calculations of working capital and current ratio to assess the business's liquidity.

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    Leonardo Wagster Decided To Open Wagster's Window Washing On September 1, 2020. in September, The Following Transactions Took Place

    Uploaded by

    JohnMurray111
    278 views12 pages
    Leonardo Wagster opened Wagster's Window Washing on September 1, 2020. During the month, he invested $29,000 cash and purchased a truck for $26,400, paying $6,400 cash and financing the remainder. Various business transactions occurred, including paying expenses, earning revenue, and withdrawing cash. Adjusting entries were made for insurance used, unbilled revenue, inventory, accrued salaries, interest on financing, and services provided in advance. Financial statements were prepared, including an income statement, balance sheet, and calculations of working capital and current ratio to assess the business's liquidity.

    Original Title

    AccountingCycleSummative2021v1

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    Leonardo Wagster opened Wagster's Window Washing on September 1, 2020. During the month, he invested $29,000 cash and purchased a truck for $26,400, paying $6,400 cash and financing the remainder. Various business transactions occurred, including paying expenses, earning revenue, and withdrawing cash. Adjusting entries were made for insurance used, unbilled revenue, inventory, accrued salaries, interest on financing, and services provided in advance. Financial statements were prepared, including an income statement, balance sheet, and calculations of working capital and current ratio to assess the business's liquidity.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    278 views12 pages

    Leonardo Wagster Decided To Open Wagster's Window Washing On September 1, 2020. in September, The Following Transactions Took Place

    Uploaded by

    JohnMurray111
    Leonardo Wagster opened Wagster's Window Washing on September 1, 2020. During the month, he invested $29,000 cash and purchased a truck for $26,400, paying $6,400 cash and financing the remainder. Various business transactions occurred, including paying expenses, earning revenue, and withdrawing cash. Adjusting entries were made for insurance used, unbilled revenue, inventory, accrued salaries, interest on financing, and services provided in advance. Financial statements were prepared, including an income statement, balance sheet, and calculations of working capital and current ratio to assess the business's liquidity.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    You are on page 1of 12

    Leonardo Wagster decided to open Wagster's Window Washing on

    September 1, 2020. In September, the following transactions took place:

    September
    1 Leonardo invested $29,000 cash into the business.
    1 Purchased a truck for $26,400, paying $6,400 cash and signing a note payable for the
    balance. The note payable will be due in 4 months.
    2 Purchased a 1 year insurance policy for the truck for $3,000 cash.
    3 Purchased cleaning supplies for $2850 on account from Hamilton Cleaning Supplies.
    4 Cleaned Jose Martin's windows for $3,800, on account.
    6 Paid on account, $400 to Hamilton Cleaning Supplies.
    9 Paid $1,600 cash for employee salaries.
    10 Jose Martin paid $700, on account.
    12 Purchased gas for the truck, paying $175 in cash.
    17 Purchased cleaning equipment for the business, on account from Hamilton Cleaning
    Supplies. This equipment cost $7,500.
    25 Clearned windows for some cash customers, for $1,500.
    26 Leonardo withdrew $950 from the business for his own personal use.
    27 Received a $1275 advance cash payment for window washing services to be
    provided in the future.
    29 Purchased advertising on account from K-Lite Fm for $175.

    Instructions:
    1. Record the above transactions in the journal.
    2. Set up the account names in the T-Accounts. Post the transactions from the journal to the
    ledger.
    3. Prepare a Trial Balance as at September 30, 2020.
    4. Record the following adjusting entries in the journal for the month of September:
    (a) Adjustment for insurance used.
    (b) Earned but unbilled revenue at September 30, were $1,500.
    (c) An inventory count shows $575 of cleaning supplies on hand at September 30.
    (d) Accrued but unpaid employee salaries were $400.
    (e) The note payable has a 6% interest rate.
    (f) At September 30, $500 worth of window cleaning had been done from the September
    27th transaction.
    5. Post the adjusting entries to the ledger.
    6. Prepare an Adjusting Trial Balance.
    7. Prepare an Income Statement for the Month-Ended September 30, 2020.
    8. Prepare a Classified Balance Sheet at September 30, 2020.
    9. Calculate the Working Capital & Current Ratio. What do these numbers say about the
    business? How would a user of the financial statements use this information to help them
    make a decision regarding this business?
    10. Journalize the Closing Entries for the month of September.
    11. Post the Closing Entries to the Ledger. Update all account balances.
    12. Prepare a Post-Closing Trial Balance.
    Date Particulars P.R. Debit Credit
    - -
    .
    DR = CR
    0 0
    BAF3M
    Closing Entries Process

    Debit Credit
    BAF3M
    Closing Entries Process

    Debit Credit
    Income Statement
    Balance Sheet

    Calculate the Working Capital & Current Ratio. What do these numbers say about the business?
    How would a user of the financial statements use this information to help them make a decision
    regarding this business?
    Debit Credit

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