Glorious Garden Lawn Service
1. Prepare the entries using the list of transactions. Put them in the general journal.
2. Post the journal entries from the general journal to the general ledger.
3. Prepare a trial balance using the general ledger totals.
4. Complete the work sheet using the information for adjustments.
5. Prepare financial statements from the worksheet.
6. Make the adjusting journal entries in the general journal.
7. Post the adjustments to the general ledger.
8. Make the appropriate closing entries in the general journal.
9. Post the closing entries to the general ledger.
10. Prepare a post-closing trial balance.
NARRATIVE OF TRANSACTIONS
1) 7/1 Jay opened two accounts at Union State Bank, using $3000 of his own money. He deposited 2,500 in a checking account and $500 into savings.
2) 7/2 Jay borrowed $6,000 from his Aunt Emma and signed a note with 8% interest. Under the terms of the note, he must make payments of $250 plus accrued interest on the first day of each month. Jay put $4,500 into his checking account and $1,500 into savings.
3) 7/3 Jay purchased a 2004 Nissan pickup truck by writing a check for $4,820.
4) 7/3 Jay purchased insurance for the pickup truck at a cost of $150 per month. He paid for the month of July.
5) 7/3 Jay established a cell phone account for the business. The phone was free, and he paid $75 for the first month's service.
AND SO ON
30) 7/24 A check for $150 was received from Mrs. Sanchez as partial payment on the work Jay completed on July 14.
31) 7/24 Jay charged (on his VISA) another $65 for landscaping supplies.
32) 7/25 Mrs. Yee paid Jay $140 to mow, weed, and put new mulch in her garden beds.
33) 7/26 Jay wrote for $85 for more fuel for his truck and mower.
34) 7/27 Jay purchased an additional $45 of office supplies.
35) 7/30 Jay paid another $75 on his account at Lovell Home & Garden.
7/31 Now that Jay has completed his first month in business he wants to prepare financial statements. He has gathered the information needed to make adjustments for the mother ended July 31.
Information for Adjustments
AI) Jay estimates that his truck will last four years and have an estimated salvage value of $500. ( Jay is using straight-line depreciation for all assets.)
A2)The lawn mower and tools should last three years, with no salvage value.
A3) Jay needs to accrue one month’s interest on his loan from Aunt Emma.
A4) By July 31, Jay had mowed Mr. Adams’ yard three of the six agreed-upon times.
A5, A6 & A7) As of July 31, Jay had $25 of office supplies, $75 of landscaping supplies, and 200 advertising flyers still on hand.
A8) Jay’s bank statement showed that his savings account had earned $5 in interest revenue.
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