On May 5, 2013, Gina Ennabeortiz started a carpet cleaning business called Ennabeortiz

On May 5, 2013, Gina Ennabeortiz started a carpet cleaning business called Ennabeortiz Family Carpet Cleaning. She completed the following transactions during the month:

 

a.Gina invested $16,500 cash and a small truck with a value of $8,000 to start her business.

b.Prepaid $3,500 cash for 12 months’ rent on a small office.

c.Purchased office supplies for cash, $575.

d.Purchased equipment on account, $4,000.

e.Received cash for services performed, $3,350.

f.Performed services on credit, $2,350.

g.Purchased truck supplies on account, $125.

h.Received $15,350 cash in advance of providing cleaning services to a customer.

i.Paid $2,500 cash for the premium on a 6-month insurance policy.

j.Paid salary of employee, $1,550.

k.Purchased $2,500 of additional equipment by paying $400 cash and signing a long-term note payable for $2,100.

l.Paid for repairs to truck, $225.

m.Received $1,350 for the services performed in transaction f.

n.Paid utilities, $315.

o.Completed cleaning services and immediately collected $10,500.

p.Paid creditor $675 on the purchase in transaction g.

q.Provided $2,000 of cleaning services from transaction h.

r.Gina withdrew cash for personal use, $2,775.

s.Paid $5,000 cash for advertisements on the local television station during May.

 

Required:

 

1.  Prepare general journal entries to record these transactions (use the account titles listed in part 2).

 

2.  Open a set of T accounts with the following titles: Cash (101), Accounts Receivable (106); Office Supplies (124); Truck Supplies(128); Equipment (131); Prepaid Rent (140); Prepaid Insurance (150); Truck (163); Accounts Payable (201); Notes Payable (202); Unearned Cleaning Revenue (203); Gina Ennabeortiz, Capital (301); Gina Ennabeortiz, Drawing (302); Cleaning Revenue (403); Salaries Expense (620); Truck Expense (630); Utilities Expense (640) and Advertising Expense (650). Post journal entries from Part 1 to the T accounts and calculate the account balance for each account.

 

3.  Prepare a trial balance as of the end of this month’s operations.

 

4.  Using the trial balance created above, prepare an income statement, statement of owner’s equity and a balance sheet for the month ended May 31st.