Sparkling Clean Dry Cleaners Inc began operations on

January 1 #3654
Sparkling Clean Dry Cleaners Inc. began operations on January 1, 2011. In its first year, the
following transactions occurred:1. Issued common shares for $150,000 cash.2. Purchased dry
cleaning equipment for $75,000 cash.3. Purchased cleaning supplies, on account, for $9,600.4.
Used $8,400 of the supplies in cleaning operations.5. Collected $124,000 from customers for
dry cleaning.6. Borrowed $15,000 from the bank on July 1, 2011, at an interest rate of 8% per
year.7. Paid wages of $49,000 to employees. In addition to this, $1,000 of wages were owed to
employees at the end of the year.8. Amortized the equipment by $3,000 for the year.9. Paid
$22,000 for utilities (telephone, electricity, and water).10. Paid interest on the bank loan
described in transaction 6.Required:a. Prepare journal entries to record each of the above
transactions.b. Create T accounts and post the journal entries to the T accounts.c. Prepare a
December 31, 2011, trial balance.View Solution:
Sparkling Clean Dry Cleaners Inc began operations on January 1

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