The following balances appeared in the general ledger of Owens Truck Rentals Incorporated at May 1, 2015.
|
Cash |
$1,600 |
Accounts payable |
$4,000 |
|
Unused supplies |
400 |
Share capital |
8,000 |
|
Equipment |
3,000 |
||
|
Trucks |
7,000 |
The following transactions occurred during May:
|
a. |
Collected $5,000 cash for truck rentals during the month |
|
b. |
Paid $500 rent expense |
|
c. |
Paid $1,500 to a creditor |
|
d. |
Paid $600 for a one–year insurance policy effective May 1 |
|
e. |
Purchased a rental truck for $5,000 on credit |
|
f. |
Paid the following expenses: advertizing, $300; salaries, $2,500; telephone, $150; truck repairs, $550 |
|
g. |
Transferred the amount of May’s insurance ($50) to Insurance Expense. |
|
h. |
Estimated $200 of supplies to have been used during May (record as supplies expense) |
|
i. |
Issued additional share capital for $2,000 cash |
|
j. |
Paid dividends of $50. |
Required:
- Open general ledger T-accounts for the following and enter the May 1 balances (account numbers are indicated in brackets): Cash (101), Prepaid Insurance (161), Unused Supplies (173), Equipment (183), Trucks (184), Accounts Payable (210), Share Capital (320), Rent Earned (440), Advertizing Expense (610), Insurance Expense (631), Rent Expense (654), Salaries Expense (656), Supplies Expense (668), Telephone Expense (669), and Truck Operating Expense (670).
- Prepare journal entries to record the May transactions including general ledger account numbers.
- Post the journal entries to the T-accounts. Total each account.
- Prepare a trial balance at May 31, 2015.
- Prepare an interim income statement and statement of changes in equity for the month ended May 31, 2015 and an interim balance sheet at May 31, 2015.
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