Question

Jan Haley owns and operates Haley’s Dry Cleaners. The following occurred during December:

a. On December 1, Haley prepaid rent on her store for December and January with $2,000 cash.

b. On December 1, Haley purchased insurance with cash in the amount of $2,400 that will last six months.

c. Haley paid $900 of her accounts payable balance.

d. Haley paid off all of her salaries payable balance.

e. Haley purchased supplies on account in the amount of $2,400.

f. Haley paid a salary to her assistant of $1,000 in cash for work done in the first two weeks of December.

g. Haley dry-cleaned clothes for customers on account in the amount of $8,000.

h. Haley collected $6,300 of her accounts receivable balance.

i. Haley paid tax of $750 in cash.

Required: A. Prepare the journal entry for each transaction.

B. Prepare all necessary T-accounts. Numbers already under the accounts represent the prior balance in that account.

Figure 5.13 Opening T-Account Balances

C. Prepare a trial balance dated 12/31/XX.

D. Make the following adjusting entries for the month of December and post them to the T-accounts:

j. Rent expense.

k. Insurance expense.

l. Haley owes her assistant $1,000 for work done during the last two weeks of December.

m. An inventory of supplies shows $400 in supplies remaining on December 31.

E. Prepare an adjusted trial balance dated 12/31/XX.

F. Prepare an income statement, statement of retained earnings, and balance sheet for the month ending December 31, 20XX.

Answer 1