Post the journal entries to the T-accounts and calculate the account balances.
Prepare an unadjusted trial balance. Check figure: Total Debits = $425,495.
Prepare adjusting journal entries in the general journal based on the following
information (all AJEs are dated June 30):
a) The building (barn and office space) has an estimated useful life of 25
years. Record depreciation for one month.
b) The equipment has an estimated useful life of 7 years. Record depreciation for one
c) Record insurance expired for one month.
d) Supplies on hand at the end of June have a cost of $1,305.
e) Accrue employee wages for 5 days from Monday June 24 through Friday June 28
(payroll is $5,500 for the two week pay period totaling 10 days for a Monday-Friday
f) Accrue interest for June on the $234,000 Mountain High Bank note payable. The
annual interest rate is 4%.
g) As of the end of June, $1,365 of the services have been performed for
customers for which payment had been received in advance on June 18.
h) In June, entered into a contact with Barr & Associates, CPAs to provide gear
transport services for the firm’s professionals. Larry’s Llama Livery will bill Barr &
Associates in the following month for services provided. Services totaling
$1,100 were performed in June and will be billed in July 2016.
i) Income taxes to accrue for June are estimated to be $1,855.
Post the adjusting entries to the T-accounts and calculate the account balances.
Prepare an adjusted trial balance. Check figure: Total Debits = $433,335.
Prepare the financial statements:
a) Income Statement
b) Statement of Retained Earnings
c) Balance Sheet:
Prepare the closing entries in the general journal (all CJEs are dated June 30).
Post the closing entries to the T-accounts and calculate account balances.
June 3 Larry’s Llama Livery, Inc. sold 50,000 shares of $3 par value common stock for
3 Found the perfect building with barn and office space in which to locate the
business. Negotiated a price of $330,000; Larry’s Llama Livery paid $96,000 in
cash and signed a long term promissory note for the $234,000 remainder to
Mountain High Bank.
4 Purchased equipment for the business for $21,420 on account (credit) from Llama
4 Paid the $2,700 premium for a 1-year insurance policy.
5 Paid $850 for advertising in the Tree Tops Press Newspaper to run throughout the
6 Purchased $2,235 of supplies on account.
7 Paid $8,000 on account to Llama Equipment Company for the equipment
purchased on June 4.
10 Employee wages are paid every two weeks on the Monday following the payroll
period (Monday- Friday workweek). Paid employee wages of $5,760 for the payroll
period ending June 7.
11 Gear transport services provided to customers on account totaled $7,950.
14 Gear transport services provided to customers for cash during the first half of June
18 Received $2,500 cash in advance (deposits) from customers for services to be
performed in late June and early July.
21 Paid utility bills (water, electric, telephone) for the month totaling $870.
24 Received $3,680 from customers for payments on their accounts.
24 Paid employee wages of $5,890 for the payroll period ending June 21.
27 Gear transport services provided to customers for cash during the second half of
June totaled $6,750.
28 Declared and paid cash dividends to the stockholders, $1,100