At June 30, 2017, the end of its most recent fiscal year, Blue Computer Consulta
ID: 2552329 • Letter: A
Question
At June 30, 2017, the end of its most recent fiscal year, Blue Computer Consultants’ post-closing trial balance was as follows:
The company underwent a major expansion in July. New staff was hired and more financing was obtained. Blue conducted the following transactions during July 2017, and adjusts its accounts monthly.
Adjustment data:
The chart of accounts for Blue Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, Supplies Expense, and Utilities Expense.
Journalize the July transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Debit Credit Cash $6,380 Accounts receivable 1,460 Supplies 840 Accounts payable $490 Unearned service revenue 1,370 Common stock 4,400 Retained earnings 2,420 $8,680 $8,680Explanation / Answer
Blue Computer Consultants
Journal entries for the month of July:
Date
Account Titles and Explanation
Debit
Credit
1-Jul
Equipment
$28,800
Cash
$4,400
Notes Payable
$24,400
(To record purchase of equipment, partly with cash and partly signing notes payable)
2-Jul
Cash
$61,000
Common Stock
$61,000
(To record issue of 24,400 shares of common stock)
3-Jul
Prepaid Insurance
$4,200
Cash
$4,200
(To record payment of prepaid insurance)
3-Jul
Prepaid Rent
$9,800
Cash
$9,800
(To record prepaid rent for two months – 4,900 x 2 =$9,800)
6-Jul
Supplies
$4,600
Cash
$4,600
(To record supplies bought)
9-Jul
No Entry
10-Jul
Cash
$1,460
Accounts Receivable
$1,460
(To record collections from customers billed previously)
13-Jul
Unearned Revenue
$1,370
Service Revenue
$1,370
(To record recognition of unearned revenue on services performed)
14-Jul
Utilities Payable
$490
Cash
$490
(To record payment of June utility bill)
16-Jul
Cash
$14,600
Unearned Revenue
$14,600
(To record advance received from client for services to be performed)
18-Jul
Salaries Expense
$13,400
Cash
$!3,400
(To record payment of semi-monthly salaries)
20-Jul
Accounts Receivable
$34,200
Service Revenue
$34,200
(To record services rendered on account)
20-Jul
Advertising Expense
$2,700
Advertising Payable
$2,700
(To record advertising bill due)
23-Jul
Unearned Revenue
$12,200
Service Revenue
$12,200
(To record recognition of revenue of the advance received on July 16)
27-Jul
Cash
$18,300
Accounts Receivable
$18,300
(To record collections from customers)
Adjusting Entries -
31-Jul
Insurance Expense
$350
Prepaid Insurance
$350
(To record insurance expense for July - 4,200 x 1/12 = $350)
31-Jul
Rent Expense
$4,900
Prepaid Rent
$4,900
(To record rent expense for July, 9,800/2 = $4,900)
31 Jul
Supplies Expense
$1,550
Supplies
$1,550
(To record cost of supplies used)
31-Jul
Depreciation Expense – Equipment
$600
Accumulated Depreciation - Equipment
$600
(To record depreciation expense on equipment)
31 Jul
Interest Expense
$122
Interest Payable
$122
(To record interest expense on notes payable - 6% x 24,400 x 1/12 = $122)
31-Jul
Salaries Expense
$13,400
Salaries Payable
$13,400
(To record salaries expense due for second half of July)
31-Jul
Utilities Expense
$980
Utilities Payable
$980
(To record utilities expense due but unpaid)
31-Jul
Income Tax Expense
$1,460
Income Tax Payable
$1,460
(To record income tax expense due but unpaid)
Date
Account Titles and Explanation
Debit
Credit
1-Jul
Equipment
$28,800
Cash
$4,400
Notes Payable
$24,400
(To record purchase of equipment, partly with cash and partly signing notes payable)
2-Jul
Cash
$61,000
Common Stock
$61,000
(To record issue of 24,400 shares of common stock)
3-Jul
Prepaid Insurance
$4,200
Cash
$4,200
(To record payment of prepaid insurance)
3-Jul
Prepaid Rent
$9,800
Cash
$9,800
(To record prepaid rent for two months – 4,900 x 2 =$9,800)
6-Jul
Supplies
$4,600
Cash
$4,600
(To record supplies bought)
9-Jul
No Entry
10-Jul
Cash
$1,460
Accounts Receivable
$1,460
(To record collections from customers billed previously)
13-Jul
Unearned Revenue
$1,370
Service Revenue
$1,370
(To record recognition of unearned revenue on services performed)
14-Jul
Utilities Payable
$490
Cash
$490
(To record payment of June utility bill)
16-Jul
Cash
$14,600
Unearned Revenue
$14,600
(To record advance received from client for services to be performed)
18-Jul
Salaries Expense
$13,400
Cash
$!3,400
(To record payment of semi-monthly salaries)
20-Jul
Accounts Receivable
$34,200
Service Revenue
$34,200
(To record services rendered on account)
20-Jul
Advertising Expense
$2,700
Advertising Payable
$2,700
(To record advertising bill due)
23-Jul
Unearned Revenue
$12,200
Service Revenue
$12,200
(To record recognition of revenue of the advance received on July 16)
27-Jul
Cash
$18,300
Accounts Receivable
$18,300
(To record collections from customers)
Adjusting Entries -
31-Jul
Insurance Expense
$350
Prepaid Insurance
$350
(To record insurance expense for July - 4,200 x 1/12 = $350)
31-Jul
Rent Expense
$4,900
Prepaid Rent
$4,900
(To record rent expense for July, 9,800/2 = $4,900)
31 Jul
Supplies Expense
$1,550
Supplies
$1,550
(To record cost of supplies used)
31-Jul
Depreciation Expense – Equipment
$600
Accumulated Depreciation - Equipment
$600
(To record depreciation expense on equipment)
31 Jul
Interest Expense
$122
Interest Payable
$122
(To record interest expense on notes payable - 6% x 24,400 x 1/12 = $122)
31-Jul
Salaries Expense
$13,400
Salaries Payable
$13,400
(To record salaries expense due for second half of July)
31-Jul
Utilities Expense
$980
Utilities Payable
$980
(To record utilities expense due but unpaid)
31-Jul
Income Tax Expense
$1,460
Income Tax Payable
$1,460
(To record income tax expense due but unpaid)
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