Q1) In its first month of operation, Rawls Repair Corporation, that specializes in bicycle repairs, completed transactions given below:
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Oct. 1
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Began business by making a deposit in a company bank account of $12,000, in exchange for 1,200 shares of $10 par value common stock.
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Oct. 1
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Paid the premium on a one-year insurance policy, $1,200.
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Oct. 1
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Paid the current month's rent, $1,040.
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Oct. 3
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Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance was placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.
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Oct. 8
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Purchased repair supplies from McKenna Company on credit, $390.
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Oct. 12
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Paid utility bill for October, $154.
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Oct. 16
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Cash bicycle repair revenue for the first half of October, $1,362.
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Oct. 19
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Made payment to McKenna Company, $200.
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Oct. 31
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Cash bicycle repair revenue for the last half of October, $1,310.
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Oct. 31
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Declared and paid cash dividend of $800.
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A. Make adjusting entries by using information given below in General Journal below. Illustrate calculations.
a) One month's insurance has expired.
b) Remaining inventory of repair supplies is $194.
c) Estimated depreciation on repair equipment is $70.
d) Estimated income taxes are $40.
B. Post adjusting entries to General Ledger T-accounts and find out adjusted balances.