The chart of accounts for Blue Computer Consultants contains the following accou
ID: 2556209 • Letter: T
Question
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.
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 $8,680
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.
July 1 Purchased equipment, paying $4,400 cash and signing a 2-year note payable for $24,400. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month. 2 Issued 24,400 shares of common stock for $61,000 cash. 3 Paid $4,200 cash for a 12-month insurance policy effective July 1. 3 Paid the first 2 (July and August 2017) months’ rent for an annual lease of office space for $4,900 per month. 6 Paid $4,600 for supplies. 9 Visited client offices and agreed on the terms of a consulting project. Blue will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,460 cash on account from Milani Brothers. This client was billed in June when Blue performed the service. 13 Performed services for Fitzgerald Enterprises. This client paid $1,370 in advance last month. All services relating to this payment are now completed. 14 Paid $490 cash for a utility bill. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $14,600 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $13,400. 20 Performed services worth $34,200 on account and billed customers. 20 Received a bill for $2,700 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $12,200 of revenue from the cash advance received July 16. 27 Received $18,300 cash from customers billed on July 20.
Adjustment data:
1. Adjustment of prepaid insurance. 2. Adjustment of prepaid rent. 3. Supplies used, $1,550. 4. Equipment depreciation, $600 per month. 5. Accrual of interest on note payable. 6. Salaries for the second half of July, $13,400, to be paid on August 1. 7. Estimated utilities expense for July, $980 (invoice will be received in August). 8. Income tax for July, $1,460, will be paid in August.
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.
Explanation / Answer
In the books of Blue Computer Consultants:
Adjusting Entries:
Blue Computer Consultants
Income Statement
For the month ended July 31, 2017
Date Account Titles Debit Credit $ $ July 1 Equipment 28,800 Cash 4,400 Note Payable 24,400 July 2 Cash 61,000 Common Stock 61,000 July 3 Prepaid Insurance 4,200 Cash 4,200 July 3 Prepaid Rent 9,800 Cash 9,800 July 6 Supplies 4,600 Cash 4,600 July 9 No journal entry required July 10 Cash 1,460 Accounts Receivable 1,460 July 13 Unearned Service Revenue 1,370 Service Revenue 1,370 July 14 Accounts Payable 490 Cash 490 July 16 Cash 14,600 Unearned Service Revenue 14,600 July 18 Salaries and Wages Expense 13,400 Cash 13,400 July 20 Accounts Receivable 34,200 Service Revenue 34,200 July 20 Advertising Expense 2,700 Accounts Payable 2,700 July 23 Unearned Service Revenue 12,200 Service Revenue 12,200 July 27 Cash 18,300 Accounts Receivable 18,300Related Questions
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