During its first month of operation the Melvin Plumbing Corporation which

During its first month of operation the melvin

This preview shows page 3 - 9 out of 17 pages.

During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing,completed the following transactions.July 1Began business by making a deposit in a company bank account of $90,000, in exchangefor 9,000 shares of $10 par value common stock.July 3Paid the current month's rent, $5,500.July 5Paid the premium on a 1-year insurance policy, $4,800July 7Purchased supplies on account from Little Company, $900.July 10Paid employee salaries, $3,300July 14Purchased equipment from Lake Company, $11,500. Paid $1,500 down and the balance wasplaced on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.Note: Use accounts payable for the balance due.July 15Received cash for plumbing revenue for the first half of July, $7,700July 19Made payment on account to Lake Company, $500.July 31Received cash for plumbing revenue for the last half of July, $8,505July 31Declared and paid cash dividends of $600Prepare journal entries to record the July transactions in the General Journal below.
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This Sheet will be used for Requirements 2, 5, and 9. Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Revenue (411) July 1 90,000 Jul 3 5,500 Jul-15 7,700 July 15 7,700 Jul 5 4,800 July-31 8,505 Jul 31 8,505 Jul 10 3300 Jul-14 1500 Bal 16,205 Jul-19 500 Jul-31 600 Bal 90,005 Prepaid Insurance (117) Rent Expense (511) Jul-5 4,800 Jul-31 400 Jul-13 5,500 (Adj) Bal 4,800 Adj Bal 4,400 Bal 5,500 Supplies (119) Salaries Expense (512) Jul-7 900 Jul-31 375 July-10 3,300 (Adj) Bal 900 Adj Bal 525 Bal 3,300 Equipment (144) Insurance Expense (513) Jul 14 11,500 Jul-31 400 (Adj) Bal 11,500 Adj Bal 400
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Accumulated Depreciation-Equipment (145) Supplies Expense (514) Jul-31 375 (Adj) Bal 375 Accounts Payable (212) Depreciation Expense (515) Jul 19 500 Jul 7 900 Jul-31 150 Jul 14 10000 (Adj) Bal 10400 Adj Bal 150 Income Tax Payable (213) Income Tax Expense (516) Common Stock (311) Jul-1 90,000 Retained Earnings (312) Bal 90,000 Dividends (313 July 31 600 Bal 600
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Requirement #3:Prepare a trial balance for July in the space below. Melvin Plumbing Corporation Trial Balance July 31 Melvin Plumbing Corporation Trial Balance July 31 Account Debit Credit Cash 90,005 Supplies 900 Prepaid Insurance 4,800 Equipment 11,500 Account Payable 10,400 Common Stock 90,000 Revenue 16,205 Rent Expense 5,500 Accumulated Dep- Equ Dep Exp Salaries Expense 3,300 Supply Expense Income Tax Expense Income Tax Payable Insurance Expense Dividends 600 116,605 116,605
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