Completing the accounting cycle
The trial balance of Road Runner Internet at July 31, 2012, follows:
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ROAD RUNNER INTERNET Trial Balance July 31, 2012 |
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Balance |
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Account |
Debit |
Credit |
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Cash |
$ 4,200 |
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Accounts receivable |
14,600 |
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Prepaid rent |
2,000 |
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Supplies |
1,600 |
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Equipment |
30,900 |
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Accumulated depreciation |
$ 3,900 |
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Accounts payable |
6,700 |
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Salary payable |
5,400 |
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Unearned service revenue |
25,800 |
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Runner, capital |
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Runner, drawing |
3,200 |
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Service revenue |
17,700 |
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Salary expense |
3,000 |
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Rent expense |
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Depreciation expense |
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Supplies expense |
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Total |
$59,500 |
$59,500 |
Adjusting data at July 31, 2012:
- Unearned service revenue still unearned, $1,200.
- Prepaid rent still in force at July 31, $1,900.
- Supplies used during the month, $800.
- Depreciation for the month, $300.
- Accrued salary expense at July 31, $500.
Requirements
1. Journalize adjusting journal entries.
2. Enter the trial balance on a worksheet and complete the worksheet for Road Runner Internet.
3. Prepare the income statement, statement of owner’s equity, and classified balance sheet in report form.
4. Using the worksheet data that you prepared, journalize the closing entries and post the adjusting and closing entries to T accounts. Use dates and show the ending balance of each account.
5. Prepare a post closing trial balance.
6. Calculate the current and debt ratios for the company.