60.1K

Verified Solution

Link Copied!

Problem 3-8A Complete the full accounting cycle (LO3-3, 3-4, 3-5, 3-6, 3-7)

The general ledger of Red Storm Cleaners at January 1, 2021, includes the following account balances:

Accounts	Debits				Credits
Cash	$	17,500
Accounts Receivable		7,500
Supplies		3,500
Equipment		12,500
Accumulated Depreciation					$	4,000
Salaries Payable						6,000
Common Stock						22,500
Retained Earnings						8,500
Totals	$	41,000			$	41,000

The following is a summary of the transactions for the year:

1.		March		12		Provide services to customers, $55,000, of which $20,500 is on account.
2.		May		2		Collect on accounts receivable, $17,500.
3.		June		30		Issue shares of common stock in exchange for $4,000 cash.
4.		August		1		Pay salaries of $6,000 from 2020 (prior year).
5.		September		25		Pay repairs and maintenance expenses, $12,500.
6.		October		19		Purchase equipment for $7,500 cash.
7.		December		30		Pay $1,200 cash dividends to stockholders.

Problem 3-8A Parts 1, 3, 6 and 10

Required:

1., 3., 6., & 10. Post the transactions, adjusting entries and closing entries to the T-accounts. Be sure to include beginning balances.

Answer & Explanation Solved by verified expert

See Answer