Accounting Information Systems ♦ 201
4. Part A
From the following General Journal T-accounts, prepare the closing entries in the general journal
and post them to the Ledger T-Accounts for Mac’s Mobile Wash.
CASH
ACCOUNTS RECEIVABLE
9/2
58,000
9/3
26,200
9/30
2,800
9/4
1,000
5,000
9/8
350
9/4
3,600
2,200
9/12
19,200
9/5
4,200
420
9/30
2,800
9/12
1,500
2,620
9/15
2,600
9/28
1,500
SUPPLIES
9/30
500
3,000
9/30
2,400
9/30
2,000
600
Bal.
37,250
PREPAID INSURANCE
PREPAID ADVERTISING
9/4
3,600
9/30
600
4,200
9/30
1,400
Bal.
3,000
2,800
EQUIPMENT
ACCUMULATED DEPREC-EQUIP
9/3
26,200
9/30
437
ACCOUNTS PAYABLE
WAGES PAYABLE
9/15
2,600
9/3
3,000
9/30
430
9/30
250
Bal
430
Bal.
650
UNEARNED WASHING REVENUE
CAPITAL STOCK
9/30
175
9/8
350
9/30
58,000
Bal.
175
Bal
58,000430
RETAINED EARNINGS
DIVIDENDS
2,000
WASHING REVENUE
WAGES EXPENSE
9/12
19,200
1,500
9/30
5,000
1,500
Bal.
24,200
3,000
9/30
420
430
9/30
175
3,430
Bal.
24,795
202 ♦ Chapter 4
RENT EXPENSE
INSURANCE EXPENSE
9/4
1,000
9/30
600
0
Bal.
1,000
Bal.
600
SUPPLIES EXPENSE
UTILITIES EXPENSE
9/30
2,400
9/30
500
Bal.
2,400
9/30
250
Bal.
750
.
ADVERTISING EXPENSE
DEPREC EXPENSE-EQUIP
9/30
1,400
9/30
437
60
Bal.
1,400
Bal.
437
GENERAL JOURNAL
Accounting Information Systems ♦ 203
Part B
Prepare the post closing trial blance for Mac’s Mobile Wash.
Mac’s Mobile Wash, Inc.
Post-Closing Trial Balance
204 ♦ Chapter 4
Accounting Information Systems ♦ 205
206 ♦ Chapter 4
5. Given the following information, prepare the statement of cash flows for Mac’s Mobile Wash,,
Inc.
Collected Cash Data
cash collections from customers
21,975
cash dividends
2,000
cash payments for operations
14,525
cash purchase of equipment
26,200
Issue of capital stock for cash
58,000
Accounting Information Systems ♦ 207
Mac’s Mobile Wash, Inc
STATEMENT OF CASH FLOW
Month ended September 30, 2006
Cash flows from operating activities:
cash received from customers
deduct cash payments for operating expenses
Net cash from operating activities
Net cash flows used for investing activities:
purchase of equipment
Net cash flows used for financing activities:
payment of dividends
issued capital stock
Net change in cash
Beginning cash, September 1
Ending cash, September 30
208 ♦ Chapter 4
6. Part A
These transactions are provided for Lou’s Laundry and Dry Cleaning. Record these entries in the
general journal provided.
Jan.
2
Lou’s Laundry and Dry Cleaning began business by depositing $30,000 in a checking account
in the name of Lou’s Laundry and Dry Cleaning, Inc. and issued capital stock.
2
Borrowed $6,000 from City Bank for 5 years and signed a promissory note with an annual
interest rate of 9%.
3
Purchased equipment from Washers Wholesale, $16,200 for cash.
3
Purchased supplies costing $3,000 from Suds ‘n Stuff on account.
4
Paid one month’s rent for business space in Pine Plaza, $1,000.
4
Paid cash for the purchase a 6-month insurance policy, $3,600.
5
Paid $2,400 for advertising to appear in the Pine Press newspaper during the next three
months.
8
Received $150 from customers who paid in advance for laundry services for January and
February.
12
Services provided to customers during the first half of January totaled 6,700. Dry cleaning
services were $4,700 and laundry services were $2,000. Cash received totaled $5,400 and
services on account were $1,300.
Paid employees for hours worked during the first two weeks of January, $1,120.
15
Paid $2,600 on account to Suds ‘n Stuff.
28
Paid wages for January 15 – 28, $1,120.
31
Services provided the second half of January totaled $16,500. Dry cleaning services were
$11,500 and laundry services were $5,000. Cash received totaled $13,800 and services on
account were $2,700.
31
Received and paid the utility bill, $500.
31
Received but did not pay the telephone bill, $250.
31
Received cash of $2,800 on accounts receivable.
31
Declared and paid dividends to the stockholders, $2,140.
Accounting Information Systems ♦ 209
General Journal
Date
Description
Debit
Credit
210 ♦ Chapter 4
General Journal
Date
Description
Debit
Credit
Part B
Using the journal entries and general journal from Part A, post the entries to the following ledger
accounts. (Hint: not all of the accounts are used now. Some will be used for adjusting and closing
entries).
General Ledger T-Accounts
CASH
ACCOUNTS RECEIVABLE
SUPPLIES
Accounting Information Systems ♦ 211
PREPAID INSURANCE
PREPAID ADVERTISING
EQUIPMENT
ACCUMULATED DEPREC-EQUIP
ACCOUNTS PAYABLE
NOTES PAYABLE
UNEARNED WASHING REVENUE
WAGES PAYABLE
UTILITIES PAYABLE
INTEREST PAYABLE
INCOME TAXES PAYABLE
COMMON STOCK
RETAINED EARNINGS
DIVIDENDS
212 ♦ Chapter 4
DRY CLEANING REVENUE
LAUNDRY REVENUE
WAGES EXPENSE
RENT EXPENSE
INSURANCE EXPENSE
SUPPLIES EXPENSE
UTILITIES EXPENSE
ADVERTISING EXPENSE
INTEREST EXPENSE
DEPREC EXPENSE-EQUIP
INCOME TAX EXPENSE
Accounting Information Systems ♦ 213
Part C
Use the ending balances in the ledger accounts from Part B to prepare the following unadjusted
trial balance.
Lou’s Laundry and Dry Cleaning, Inc.
Unadjusted Trial Balance
January 31, 2006
214 ♦ Chapter 4
216 ♦ Chapter 4
Accounting Information Systems ♦ 217
7. Part A
Prepare these adjusting journal entries in the following general journal (all A-Gs are dated January
31).
(a)
Depreciation on the equipment is $270.
(b)
Supplies used during January have a cost of $2,400.
(c)
Record insurance expired for one month, $600.
(d)
Laundry services of $240 and dry cleaning services of $560 were performed at the end of January
but have not yet been billed.
(e)
Wages of $340 are owed to employees for hours they worked January 29-31.
(f)
One month of the unearned revenue from the customer who paid in advance for laundry services has
been earned, for $75.
(g)
Record advertising expired for the month of January, $800.
Cash
Accounts Receivable
Supplies
Prepaid Insurance
Prepaid Advertising
Equipment
Accounts Payable
Notes Payable
Unearned Laundry Revenue
Capital Stock
Dividends
Dry Cleaning Revenue
Laundry Revenue
Wages expense
Rent expense
Utilities expense
218 ♦ Chapter 4
General Journal
Date
Description
Debit
Credit
Part B
Post the journal entries from Part A into the general ledger T-accounts.
CASH
ACCOUNTS RECEIVABLE
1/2
30,000
1/3
16,200
1/12
1,300
1/31
2,800
1/2
6,000
1/4
1,000
1/31
2,700
1/8
150
1/4
3,600
Bal.
1,200
1/12
5,400
1/5
2,400
1/31
13,800
1/12
1,120
Bal.
1/31
2,800
1/15
2,600
1/28
1,120
SUPPLIES
1/31
500
1/3
3,000
1/31
2,140
Bal.
3,000
Bal.
27,470
Accounting Information Systems ♦ 219
PREPAID INSURANCE
PREPAID ADVERTISING
1/4
3,600
2,400
Bal.
3,600
2,400
Bal.
EQUIPMENT
ACCUMULATED DEPREC-EQUIP
1/3
16,200
ACCOUNTS PAYABLE
NOTES PAYABLE
1/15
2,600
1/3
3,000
1/2
6,000
1/31
250
Bal.
650
UNEARNED WASHING REVENUE
WAGES PAYABLE
1/8
150
0
Bal.
150
CAPITAL STOCK
1/2
30,000
RETAINED EARNINGS
DIVIDENDS
2,140
2,400
DRY CLEANING REVENUE
LAUNDRY REVENUE
1/12
4,700
1/12
2,000
1/31
11,500
1/31
5,000
Bal.
16,200
Bal.
7,000
0
WAGES EXPENSE
RENT EXPENSE
1/12
1,120
1,000
0
1/28
1,120
1,000
Bal.
2,240
220 ♦ Chapter 4
INSURANCE EXPENSE
SUPPLIES EXPENSE
UTILITIES EXPENSE
ADVERTISING EXPENSE
1/31
500
0
1/31
250
Bal.
750
1
DEPREC EXPENSE-EQUIP
Part C
Prepare the adjusted trial balance for Lou’s Laundry and Dry Cleaning, Inc. in the following
Adjusted Trial Balance sheet.
Lou’s Laundry and Dry Cleaning, Inc.
Adjusted Trial Balance
January 31, 2006