Sanlucas, Inc., provides home inspection services to its clients. The company’s trial balance dated

 

June 1, 2011, is shown below:

 

 

 

 

 

SANLUCAS, INC. TRIAL BALANCE JUNE 1, 2011

 

Cash   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $ 5,100

 

Accounts receivable   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             2,600

 

Inspection supplies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               800

 

Accounts payable   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                            $     850

 

Notes payable  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                2,000

 

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                600

 

Capital stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                3,000

 

Retained earnings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               1,800

 

Inspection revenue   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                               8,350

 

Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             4,900

 

Advertising expense   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               300

 

Testing expense   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .             1,700

 

$16,000      $16,000

 

 

 

 

Sanlucas engaged in the following transactions in June:

 

June  4    Borrowed cash from Community Bank by issuing a $1,500 note payable.

 

June  9    Collected a $1,600 account receivable from Nina Lesher.

 

 

 

June 10    Purchased $150 of inspection supplies on account.

 

June 17    Billed home owners $1,650 for inspection services. The entire amount is due on July 17.

 

June 25    Paid WLIR Radio $200 for ads to be aired on June 27.

 

June 28    Recorded and paid $1,300 for testing expenses incurred in June.

 

June 30    Recorded and paid June salaries of $1,100.

 

 

 

Instructions

 

a.       Record the company’s June transactions in general journal form. Include a brief explanation of the transaction as part of each journal entry.

 

b.       Post each entry to the appropriate ledger accounts (use the T account format illustrated in Exhibit 3–8 on page 108).

 

c.       Prepare a trial balance dated June 30, 2011. (Hint: Retained Earnings will be reported at the same amount as on June 1. Accounting for changes in the Retained Earnings account resulting from revenue, expense, and dividend activities is discussed in Chapter 5.)

 

d.       Has the company paid all of the dividends that it has declared? Explain.