Chapter 2 Problem 1GP
Judy Davis opened Judy’s Maids Cleaning Service on July 1, 20XX.
During July, the company
completed the following transactions:
Invested $14,000 cash in the business in exchange for 5,000 shares of $2 par value
Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.
Purchased cleaning supplies for $800 on account.
Paid $1,800 on a one-year insurance policy, effective July 1.
Billed customers $3,800 for cleaning services.
Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.
Paid $1,600 for employee salaries.
Collected $1,400 from customers billed on July 12.
Billed customers $1,500 for cleaning services.
Paid gas and oil for the month on the truck, $400.
The company declared and paid a $600 cash dividend to Ms. Davis.
The chart of accounts for Judy’s Maids Cleaning Service contains the following accounts:
Cash, Accounts Receivable, Cleaning Supplies, Prepaid Insurance, Equipment, Accumulated
Depreciation – Equipment, Accounts Payable, Salaries Payable, Common Stock, Additional
Paid-In Capital, Retained Earnings, Income Summary, Dividends, Service Revenue, Gas & Oil
Expense, Cleaning Supplies Expense, Depreciation Expense, Insurance Expense, and Salaries