Problem
During the month of October of the current year, Dan's Accounting Service was opened. The following transactions occurred.
Oct 1- Dan sold $70,000 worth of stock (50 shares) to start the business.
Oct 1- Dan purchased $9,500 worth of office equipment on account from Noe's Furniture Supply.
Oct 1- Dan paid October's rent on the office. He wrote a check for $2,500.
Oct 2- Dan purchased $400 worth of office supplies for cash.
Oct 4-The telephone was installed. We paid $95 (Utilities Expense).
Oct 4- Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).
Oct 4- Dan started a petty cash fund with $50 for a fund balance.
Oct 5- We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).
Oct 5- A three-month umbrella insurance policy was purchased for $720 (cash).
Oct 7- Pola's Automotive Supply Company paid us $2,800 (cash) for setting up their books.
Oct 9- We earned $3,200 from Esparsen's Fine Furniture Company for setting up their books. They will pay us later.
Oct 12- We paid a part-time employee $90 for running errands. There are no taxes to be withheld.
Oct 14- Frisque's Food Service, Inc. paid us $1,700 for helping them with their taxes. The actual bill was for $3,500. They will pay us the rest next month.
Oct 19- We paid our part-time employee $80 for running errands. There are no taxes to be withheld.
Oct 23- We sent a check for $1,000 to Noe's Furniture Supply for the office equipment purchased on October 1st.
Oct 26- We earned $800 for consulting with Strodthoff's Clothing Outlet. They will pay us later.
Oct 26- We paid our part-time employee $50 for running errands. There are no taxes withheld.
Oct 30- Esparsen's Fine Furniture Company paid us $900 on account for the work we did for them on October 9.
Oct 30- Dan paid the stockholders $600 in dividends.
Oct 31- Dan paid the electric bill which was $90.
Oct 31- Dan replenished the petty cash fund. He had used $12 for office supplies and $18 for miscellaneous expenses.
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CHART OF ACCOUNTS TO USE.....
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101. Cash
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102 Petty Cash
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108 Accounts Receivable
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112 Office Supplies
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118 Prepaid Insurance
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201 Office Equipment
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202 Accumulated Depreciation-Office Equipment
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301 Accounts Payable
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511 Contributed Capital
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512 Retained Earnings
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513 Dividends
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611 Professional Fees
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810 Advertising Expense
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815 Depreciation Expense
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820 Insurance Expense
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825 Miscellaneous Expense
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830 Office Supplies Expense
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835 Rent Expense
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840 Utilities Expense
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845 Wages Expense
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308 Wages Payable
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QUESTIONS:
1. Prepare an Income Statement (don't forget the earnings per share), Statement of Retained Earnings, and a Classified Balance Sheet.
2. Journalize the closing entries
3. Post the closing entries
4. Prepare a post-closing trail balance.