ASSIGNMENT #5 (Ch.

6 Question AP-11B, page 324 of the Workbook)

a) Prepare the journal entries for the transactions for the month of December. The chart of accounts is found on page 325 of
Date Account Title and Explanation PR Debit Credit
2022
2-Dec Prepaid insurance 110 $12,000.00
Cash 101 $12,000
To record insurance expense

5-Dec Maintenance expense 500 $1,400

Cash 101 $1,400
To record maintenance expense

12-Dec Bugs, Withdrawals 310 $3,500.00

Cash 101 $3,500
To record owner's withdrawals

18-Dec Cash 101 $2,200

Unearned revenue 220 $2,200
To record payment from customer for future services

23-Dec Bank Loan 250 $870

Cash 101 $870
To record payment for bank loan

23-Dec Interest expense 540 $130

Cash 101 $130
To record interest expense

28-Dec Cash 101 $450

Accounts receivable 105 $450
To record payment from customer who owned
he Workbook)
accounts is found on page 325 of the workbook.
b) Post the journal entries from part a) to the general ledger.

GENERAL LEDGER
Account: Cash
Date Description PR DR CR
2022 Opening Balance
12-Dec To record insurance expense 101 $12,000
5-Dec To record maintenance expense 101 $1,400
12-Dec To record owner's withdrawals 101 $3,500
18-Dec To record payment from customer for future services 101 $2,200
23-Dec To record payment for bank loan 101 $870
23-Dec To record interest expense 101 $130
28-Dec To record payment from customer who owned 101 $450

Account: Accounts Receivable

Date Description PR DR CR
2022 Opening Balance
28-Dec Accounts receivable 105 450

Account: Prepaid Insurance

Date Description PR DR CR
2022 Opening Balance
2-Dec To record insurance expense 110 12,000

Account: Equipment
Date Description PR DR CR
2022 Opening Balance 120

Account: Accumulated Depreciation-Equipment

Date Description PR DR CR
2022 Opening Balance 520

Account: Accounts Payable

Date Description PR DR CR
2022 Opening Balance 200

Account: Salaries Payable

Date Description PR DR CR
2022 Opening Balance 210

Account: Unearned Revenue

 Date Description PR DR CR
2022 Opening Balance
18-Dec To record payment from customer for future services 220 2,200

Account: Bank Loan

Date Description PR DR CR
2022 Opening Balance
23-Dec To record payment for bank loan 250 870

Account: Bugs, Capital

Date Description PR DR CR
2022 Opening Balance 300

Account: Bugs, Withdrawals

Date Description PR DR CR
2022 Opening Balance
12-Dec To record owner's withdrawals 310 3,500

Account: Income Summary

Date Description PR DR CR
2022 Opening Balance

Account: Service Revenue

Date Description PR DR CR
2022 Opening Balance 400

Account: Maintenance Expense

Date Description PR DR CR
2022 Opening Balance
5-Dec To record maintenance expense 500 1,400

Account: Depreciation Expense

Date Description PR DR CR
2022 Opening Balance 520
Account: Interest Expense
Date Description PR DR CR
2022 Opening Balance
23-Dec To record interest expense 540 130

Account: Insurance Expense

Date Description PR DR CR
2022 Opening Balance 560

Account: Salaries Expense

Date Description PR DR CR
2022 Opening Balance 570
 GL No: 101
Balance
18,500 DR
6,500
5,100
1,600
3,800
2,930
$2,800
3,250 DR

GL No: 105
Balance
3,200 DR
2,750

GL No: 110
Balance
1,000 DR
13,000

GL No: 120
Balance
285,000 DR

GL No: 125
Balance
45,000 CR

GL No: 200
Balance
5,500 CR

GL No: 210
Balance
0 CR

GL No: 220
 Balance
1,400 CR
3,600

GL No: 250
Balance
192,550 CR
191,680

GL No: 300
Balance
46,200 CR

GL No: 310
Balance
10,000 DR
13,500 DR

GL No: 315
Balance
0 CR

GL No: 400
Balance
78,000 CR

GL No: 500
Balance
3,800 DR
5,200 DR

GL No: 520
Balance
4,000 DR
GL No: 540
Balance
1,150 DR
1,280

GL No: 560
Balance
11,000 DR

GL No: 570
Balance
31,000 DR
c) Prepare 6 column worksheet

Space Jam Storage

Worksheet
31-Dec-22

Unadjusted Trial Adjusted Trial

Balance Adjustments Balance
Account Title DR CR DR CR DR CR
Cash 3,250 3,250
Accounts receivable 2,750 2,750
Prepaid insurance 13,000 1,000 12,000
Equipment 285,000 285,000
Accumulated depreciation 45,000 500 45,500
Accounts payable 5,500 5,500
Salaries Payable 0 3,370 3,370
Unearned revenue 3,600 1,500 2,100
Bank Loan 191,680 191,680
Bugs, Capital 46,200 46,200
Bugs, Withdrawals 13,500 13,500
Service revenue 78,000 1,500 79,500
Maintenance expense 5,200 5,200
Depreciation expense 4,000 500 4,500
Interest expense 1,280 1,280
Insurance expense 11,000 1,000 12,000
Salaries expense 31,000 3,370 34,370

Total 369,980 369,980 6,370 6,370 373,850 373,850

d) Prepare the income statement

Space Jam Storage

Income Statement
For the Month Ended December 31, 2022
Service revenue 79,500
Expenses
Maintenance expense 5,200
Depreciation expense 4,500
Interest expense 1,280
Insurance expense 12,000
Salaries expense 34,370

Total expenses 57,350

Net income (Loss) 22,150
e) Prepare the statement of owner's equity

Space Jam Storage

Statement of owner's equity
For the Month Ended December 31, 2022
Bugs, Capital at December 1, 2022 46,200
Add:
Net income (Loss) 22,150 22,150
Subtotal 68,350
Less:
Bugs, Withdrawals 13,500

Bugs, Capital at December 31, 2022 54,850

f) Prepare the balance sheet

Space Jam Storage

Balance sheet
For the Month Ended December 31, 2022
Assets
Cash 3,250
Accounts receivable 2,750
Prepaid insurance 12,000
Equipment 285,000
Accumulated Depreciation- Equipment 45,500 239,500
Total Assets 257,500

Liabilities
Accounts payable 5,500
Salaries payable 3,370
Unearned revenue 2,100
Bank Loan 191,680
Total liabilities 202,650

Owner's equity
Bugs, Capital 54,850
Total Liabilities and Owner's Equity 257,500
g) Record the journal entries for the adjusting and closing transactions. Use the Income Summary method. Post these entries

Date Account Title and Explanation PR Debit Credit

2022
31-Dec Unearned revenue 1,500
Service revenue 1,500
To record perform work that is already paid

31-Dec Insurance expense 1,000

Prepaid insurance 1,000
Month of insurance used

31-Dec Depreciation expense 500

Accumulated Depreciation-Equipment 500
Depreciation of equipment

31-Dec Salaries expense 3,370

Salaries payable 3,370
Accrued salaries owed to employees

31-Dec Service revenue 79,500

Income summary 79,500
To close revenue

31-Dec Income summary 57,350

Maintenance expense 5,200
Depreciation expense 4,500
Interest expense 1,280
Insurance expense 12,000
Salaries expense 34,370
To close expenses

31-Dec Income summary 22,150

Bugs, Capital 22,150
To close income summary

31-Dec Bugs, Capital 13,500

Bugs, Withdrawals 13,500
To close owner's withdrawals
method. Post these entries in the general ledger from part b)