On November 1, 2017, the account balances of Pine Equipment Repair were as follows — Nov following summary transactions completed

On November 1, 2017, the account balances of Pine Equipment Repair were as follows:

During

Nov. 8 November, the following summary transactions were completed.

10 Paid $1,100 for salaries due employees, of which $600 is for November salaries.

12 Received $1,200 cash from customers on account.

15 Received $1,400 cash for services performed in November.

17 Purchased equipment on account, $3,000.

20 Purchased supplies on account, $500.

22 Paid creditors on account, $2,500.

25 Paid November rent of $300. Paid salaries of $1,300.

27 Performed services on account and billed customers for services provided, $900.

29 Received $550 from customers for future service.

Adjustment data consist of:

1. Supplies on hand, $1,000.

2. Accrued salaries payable, $500.

3. Depreciation for the month is $100.

4. Unearned service revenue of $1,150 is earned during the month.

Instructions

(a) Enter the November 1 balances in the ledger accounts (use T accounts).

(b) Journalize the November transactions.

(c) Post the November transactions.

(d) Prepare a trial balance at November 30.

(e) Journalize and post adjusting entries.

(f) Prepare an adjusted trial balance.

(g) Prepare an income statement and a statement of owner’s equity for November and a balance sheet at November 30.

TAKING IT FURTHER

Comment on the company’s results of operations and its financial position. In your analysis, refer to specific items in the financial statements.

SOLUTION

(b) Nov. 8 Salaries Payable 500

Salaries Expense 600

Cash 1,100

10 Cash 1,200

Accounts Receivable 1,200

12 Cash 1,400

Service Revenue 1,400

15 Equipment 3,000

Accounts Payable 3,000

17 Supplies 500

Accounts Payable 500

20 Accounts Payable 2,500

Cash 2,500

22 Rent Expense 300

Cash 300

25 Salaries Expense 1,300

Cash 1,300

27 Accounts Receivable 900

Service Revenue 900

29 Cash 550

Unearned Revenue 550

(d)

PINE EQUIPMENT REPAIR

Trial Balance

November 30, 2017

Debit Credit

Cash $ 740

Accounts receivable 2,210

Supplies 2,500

Equipment 13,000

Accumulated depreciation—equipment $ 500

Accounts payable 3,100

Unearned revenue 1,950

S. Seed, capital 12,800

Service revenue 2,300

Salaries expense 1,900

Rent expense 300 ______

$20,650 $20,650

(e)

Nov. 30 Supplies Expense 1,500

Supplies 1,500

($2,500 - $1,000 = $1,500)

30 Salaries Expense 500

Salaries Payable 500