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Flash Cleaning Services
Flash Cleaning Services commenced operations on 1 July 2018. The company opened a cleaning business – providing cleaning services to local schools, preschools and childcare centers. During its first month of operations, the following transactions occurred:
|
Date |
Transaction details |
|
1 July 2018 |
Sally Flash invested $30,000 into the business, and the money was deposited into the bank account. Sally Flash operates the business as a sole-trader. |
|
1 July 2018 |
Flash Cleaning Services borrowed $20,000 from the bank. The loan is interest- only, and interest is charged at 12% p.a. |
|
1 July 2018 |
Flash Cleaning Services purchased a motor vehicle – a van that will be used for the cleaning business. The motor vehicle cost $18,000, and Flash Cleaning Services paid for the vehicles from the bank account. The motor vehicle has an estimated useful life of six years, and an estimated residual value of $3,000. |
|
1 July 2018 |
Flash Cleaning Services paid $3,600 for insurance for the period 1 July 2018 – 30 June 2019. |
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1 July 2018 |
Flash Cleaning Services purchased cleaning equipment for $4,800, paid from the bank account. |
|
9 July 2018 |
Flash Cleaning Services purchased supplies for $2,400, on credit terms. |
|
13 July |
Flash Cleaning Services provided cleaning services to Rainbow Childcare Centre |
|
2018 |
For $500, and the Centre deposited this money into Flash Cleaning Services’ bank account. |
|
20 July 2018 |
Flash Cleaning Services paid wages of $1,600 to employees, for services to 20 July. |
|
25 July 2018 |
Flash Cleaning Services received $5,500 for cleaning services to be provided to ABC Public School between 25 July 2018 and 30 September 2018. |
|
27 July 2018 |
Flash Cleaning Services paid $2,000 of the money owing to the supplier in relation the supplies purchased on 9 July 2018. |
|
31 July 2018 |
Interest of $300 on the bank loan is charged, and it is paid from the bank account. |
|
31 July 2018 |
Flash Cleaning Services paid advertising costs of $1,600 to the local newspaper, for July advertising. |
Additional information:
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Flash Cleaning Services owes wages of $2,200 to employees, for services to 31 July.
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Flash Cleaning Services has invoiced a number of customers for cleanings services provided during July, and needs to accrue service revenue of $12,600.
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Accrued expenses as at 31 July include: fuel ($190) and telephone ($100) for the month of July.
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Supplies on hand at 31 July 2018 amount to $2,100.
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Flash Cleaning Services provided cleaning services to ABC Public School on 28 July 2018, earning $500 of the $5,500 that was paid to Flash Cleaning Services on 25 July 2018.
Required:
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Prepare the journal entries for the twelve transactions listed above that occurred during July 2018.
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Prepare T-accounts and post all of the above journal entries to the T-accounts. Total all of the T-accounts to determine their balances at the end of the month.
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Based on the balances in the T-accounts above, prepare the ‘Unadjusted Trial Balance’ in an Excel spreadsheet.
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Explain what the five types of adjusting entries are. Prepare all of the adjusting entries for Flash Cleaning Services as at 31 July 2018.
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Using your ‘Unadjusted Trial Balance’ and adjusting entries prepared above, prepare the ten column worksheet in Excel for the month ended 31 July 2018.