Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
a.
Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock.
b.
The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance.
c.
Paid $750 cash for the first monthâs rent.
d.
Purchased shop equipment for $8,000 cash.
e.
Purchased shop supplies costing $3,000 on account.
f.
Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note.
g.
Received $1,750 from customers for repair work done.
h.
Joe invested another $5,000 into the business and took another 1,000 shares of stock.
i.
Paid $300 cash for radio advertising for the first month.
j.
Paid $200 cash for gas, oil, and service costs on the wrecker.
k.
Paid $3,000 on accounts payable.
l.
Repaired a truck for Ace Trucking for $1,200 on account.
m.
Paid $70 for the installation of the telephone.
n.
Paid $180 for repairs on the wrecker.
o.
Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered.
p.
Paid $150 for cleaning and minor maintenance on the building.
q.
Received $1,500 cash from customers for repair services rendered.
r.
Purchased shop supplies for $2,500 cash.
s.
Purchased a computer for the office for $1,250 cash.
t.
Received payment of $1,200 from Ace Trucking.
u.
Paid the monthly utility bill, $900.
v.
Paid $350 for gas and oil for the wrecker.
Required:
Journalize the transactions for the month. Use the accounts listed in the chart of accounts on the back side of this page.
Post the information to accounts.
Determine end of the month balances in all accounts.
Prepare a trial balance.
Record the adjusting journal entry for insurance.
Make an adjusted trial balance.
Prepare the income statement.
Prepare the statement of retained earnings.
Prepare the balance sheet.
Write a short letter to Joe that describes what you have done and how the business did in the first month of operations. Provide some recommendations for Honest Joeâs Garage.
Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
| a. | Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock. |
| b. | The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance. |
| c. | Paid $750 cash for the first monthâs rent. |
| d. | Purchased shop equipment for $8,000 cash. |
| e. | Purchased shop supplies costing $3,000 on account. |
| f. | Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note. |
| g. | Received $1,750 from customers for repair work done. |
| h. | Joe invested another $5,000 into the business and took another 1,000 shares of stock. |
| i. | Paid $300 cash for radio advertising for the first month. |
| j. | Paid $200 cash for gas, oil, and service costs on the wrecker. |
| k. | Paid $3,000 on accounts payable. |
| l. | Repaired a truck for Ace Trucking for $1,200 on account. |
| m. | Paid $70 for the installation of the telephone. |
| n. | Paid $180 for repairs on the wrecker. |
| o. | Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered. |
| p. | Paid $150 for cleaning and minor maintenance on the building. |
| q. | Received $1,500 cash from customers for repair services rendered. |
| r. | Purchased shop supplies for $2,500 cash. |
| s. | Purchased a computer for the office for $1,250 cash. |
| t. | Received payment of $1,200 from Ace Trucking. |
| u. | Paid the monthly utility bill, $900. |
| v. | Paid $350 for gas and oil for the wrecker. |
Required:
Journalize the transactions for the month. Use the accounts listed in the chart of accounts on the back side of this page.
Post the information to accounts.
Determine end of the month balances in all accounts.
Prepare a trial balance.
Record the adjusting journal entry for insurance.
Make an adjusted trial balance.
Prepare the income statement.
Prepare the statement of retained earnings.
Prepare the balance sheet.
Write a short letter to Joe that describes what you have done and how the business did in the first month of operations. Provide some recommendations for Honest Joeâs Garage.
Related questions
Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
| a. | Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock. |
| b. | The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance. |
| c. | Paid $750 cash for the first monthâs rent. |
| d. | Purchased shop equipment for $8,000 cash. |
| e. | Purchased shop supplies costing $3,000 on account. |
| f. | Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note. |
| g. | Received $1,750 from customers for repair work done. |
| h. | Joe invested another $5,000 into the business and took another 1,000 shares of stock. |
| i. | Paid $300 cash for radio advertising for the first month. |
| j. | Paid $200 cash for gas, oil, and service costs on the wrecker. |
| k. | Paid $3,000 on accounts payable. |
| l. | Repaired a truck for Ace Trucking for $1,200 on account. |
| m. | Paid $70 for the installation of the telephone. |
| n. | Paid $180 for repairs on the wrecker. |
| o. | Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered. |
| p. | Paid $150 for cleaning and minor maintenance on the building. |
| q. | Received $1,500 cash from customers for repair services rendered. |
| r. | Purchased shop supplies for $2,500 cash. |
| s. | Purchased a computer for the office for $1,250 cash. |
| t. | Received payment of $1,200 from Ace Trucking. |
| u. | Paid the monthly utility bill, $900. |
| v. | Paid $350 for gas and oil for the wrecker. |
Required:
Prepare the income statement.
Prepare the statement of retained earnings.
Prepare the balance sheet.
Write a short letter to Joe that describes what you have done and how the business did in the first month of operations. Provide some recommendations for Honest Joeâs Garage.
Joe Jackson decides to go into the car repair business by opening Honest Joeâs Garage. The following events occurred during January 2017, the first month of operations:
| a. | Joe contributed $15,000 from his savings to the business and took 3,000 shares of no par value common stock. |
| b. | The business paid $3,000 for a six-month insurance policy. Record as Prepaid Insurance. |
| c. | Paid $750 cash for the first monthâs rent. |
| d. | Purchased shop equipment for $8,000 cash. |
| e. | Purchased shop supplies costing $3,000 on account. |
| f. | Purchased a used wrecker for $11,500 by paying $1,500 down and financing the balance on a three-year note. |
| g. | Received $1,750 from customers for repair work done. |
| h. | Joe invested another $5,000 into the business and took another 1,000 shares of stock. |
| i. | Paid $300 cash for radio advertising for the first month. |
| j. | Paid $200 cash for gas, oil, and service costs on the wrecker. |
| k. | Paid $3,000 on accounts payable. |
| l. | Repaired a truck for Ace Trucking for $1,200 on account. |
| m. | Paid $70 for the installation of the telephone. |
| n. | Paid $180 for repairs on the wrecker. |
| o. | Collected $1,000 cash and accepted a 60-day notes receivable of $1,450 from Speedy Trucking for repair services rendered. |
| p. | Paid $150 for cleaning and minor maintenance on the building. |
| q. | Received $1,500 cash from customers for repair services rendered. |
| r. | Purchased shop supplies for $2,500 cash. |
| s. | Purchased a computer for the office for $1,250 cash. |
| t. | Received payment of $1,200 from Ace Trucking. |
| u. | Paid the monthly utility bill, $900. |
| v. | Paid $350 for gas and oil for the wrecker. |
Required:
Record the adjusting journal entry for insurance.
Make an adjusted trial balance.
