Business Finance Homework Help

Roth Contractors Corporation was incorporated on December 1, 2019
and had the following transactions during December:
Part A

a. Issued common stock for $5,000 cash

b. Paid $1,200 cash for three months’ rent: December 2019;
January and February 2020

c. Purchased a used truck for $10,000 on credit (recorded as an
account payable)

d. Purchased $1,000 of supplies on credit. These are expected to
be used during the month (recorded as expense)

e. Paid $1,800 for a one-year truck insurance policy, effective
December 1

f. Billed a customer $4,500 for work completed to date

g. Collected $800 for work completed to date

h. Paid the following expenses in cash: advertising, $350; interest,
$100; telephone, $75; truck operating, $425; wages, $2,500

i. Collected $2,000 of the amount billed in f above

j. Billed customers $6,500 for work completed to date

k. Signed a $9,000 contract for work to be performed in January
2020

l. Paid the following expenses in cash: advertising, $200; interest,
$150; truck operating, $375; wages, $2,500

m. Collected a $2,000 advance on work to be done in January (the
policy of the corporation is to record such advances as revenue
at the time they are received)

n. Received a bill for $100 for electricity used during the month
(recorded as utilities expense).

Required:

1. Open general ledger T-accounts for the following: Cash, Accounts
Receivable, Prepaid Insurance, Prepaid Rent, Truck, Accounts
Payable, Common Stock, Repair Revenue, Advertising Expense,
Interest Expense, Supplies Expense, Telephone Expense, Truck
Operating Expense, Utilities Expense, and Wages Expense. General
ledger account numbers are not necessary.

2. Prepare journal entries to record the December transactions.
General ledger account numbers and descriptions are not needed.

3. Post the entries to general ledger T-accounts.

Part B
The following information relates to December 31, 2019:

o. One month of the prepaid insurance has expired.

p. The December portion of the rent paid on December 1 has
expired.

q. A physical count indicates that $350 of supplies is still on hand.

r. The amount collected in transaction m is unearned at December
31.

s. Three days of wages for December 29, 30, and 31 are unpaid,
amounting to $1,500. These will be paid in January.

t. The truck has an estimated useful life of 4 years.

u. Income taxes expense is $500. This amount will be paid in the
next fiscal year.

Required:

4. Open additional general ledger T-accounts for the following:
Unused Supplies, Accumulated Depreciation, Wages Payable,
Unearned Revenue, Income Taxes Payable, Depreciation Expense,
Insurance Expense, Rent Expense, and Income Taxes Expense.
General ledger account numbers are not necessary.

5. Prepare all necessary adjusting entries. General ledger account
numbers and descriptions are not necessary.

6. Post the entries to general ledger T-accounts and calculate
balances.

7. Prepare an adjusted trial balance at December 31.

8. Assume the fiscal year-end is December 31, 2019. Prepare an
income statement, statement of changes in equity, and balance
sheet.

9. Prepare closing entries and a post-closing trial balance at
December 31, 2019.