Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018.
ID: 2570136 • Letter: K
Question
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into transactions. In Part 1 of this problem, the accounting cycle was completed up through the preparation of the adjusted trial balance.
10. Prepare a post-closing trial balance. Accounts with zero balances can be left blank.
Kelly Consulting
ADJUSTED TRIAL BALANCE
Score: 77/83
May 31, 2018
1
Cash
44,195.00
2
Accounts Receivable
8,080.00
3
Supplies
715.00
4
Prepaid Rent
1,600.00
5
Prepaid Insurance
1,225.00
6
Office Equipment
14,500.00
7
Accumulated Depreciation
660.00
8
Accounts Payable
895.00
9
Salaries Payable
325.00
10
Unearned Fees
11
Common Stock
30,000.00
12
Retained Earnings
12,300.00
13
Dividends
10,500.00
14
Fees Earned
15
Salary Expense
1,705.00
16
Rent Expense
1,600.00
17
Supplies Expense
1,370.00
18
Depreciation Expense
330.00
19
Insurance Expense
275.00
20
Miscellaneous Expense
1,295.00
21
Totals
87,390.00
87,390.00
CHART OF ACCOUNTSKelly ConsultingGeneral Ledger
Miscellaneous Expense
PAGE 8
JOURNAL
ACCOUNTING EQUATION
1
Closing Entries
2
3
4
5
6
7
8
9
10
11
12
13
14
8. A. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare an income statement. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare an income statement. Refer to the Chart of Accounts and the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred, enter that amount as a negative number using a minus sign. Enter all other amounts as positive numbers. A colon (:) will automatically appear if it is required.
Kelly Consulting
Income Statement
1
2
3
4
5
6
7
8
9
10
8. B. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare a retained earnings statement. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare a retained earnings statement. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Kelly Consulting
Retained Earnings Statement
1
2
3
4
5
8. C. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare a balance sheet. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare a balance sheet. Refer to the Chart of Accounts and the Labels and Amount Descriptions list for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Kelly Consulting
Balance Sheet
1
Assets
2
3
4
5
6
7
8
9
10
11
12
13
14
Liabilities
15
16
17
18
19
20
Stockholders’ Equity
21
22
23
24
10. Prepare a post-closing trial balance. Accounts with zero balances can be left blank.
Kelly Consulting
POST-CLOSING TRIAL BALANCE
May 31, 2018
1
Cash
2
Accounts Receivable
3
Supplies
4
Prepaid Rent
5
Prepaid Insurance
6
Office Equipment
7
Accumulated Depreciation
8
Accounts Payable
9
Salaries Payable
10
Unearned Fees
11
Common Stock
12
Retained Earnings
13
Totals
Required: 8. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare an income statement, a retained earnings statement, and a balance sheet. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare an income statement, a retained earnings statement, and a balance sheet. Be sure to read the instructions for each financial statement carefully. 9. A. Prepare the closing entries on Page 8 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 9. B. Use the spreadsheet to post the closing entries to the ledger of four-column accounts. Add the appropriate posting reference to the journal in CengageNOW.10. Prepare a post-closing trial balance. Accounts with zero balances can be left blank.
Kelly Consulting
ADJUSTED TRIAL BALANCE
Score: 77/83
May 31, 2018
ACCOUNT TITLE DEBIT CREDIT1
Cash
44,195.00
2
Accounts Receivable
8,080.00
3
Supplies
715.00
4
Prepaid Rent
1,600.00
5
Prepaid Insurance
1,225.00
6
Office Equipment
14,500.00
7
Accumulated Depreciation
660.00
8
Accounts Payable
895.00
9
Salaries Payable
325.00
10
Unearned Fees
3210.0011
Common Stock
30,000.00
12
Retained Earnings
12,300.00
13
Dividends
10,500.00
14
Fees Earned
40,000.0015
Salary Expense
1,705.00
16
Rent Expense
1,600.00
17
Supplies Expense
1,370.00
18
Depreciation Expense
330.00
19
Insurance Expense
275.00
20
Miscellaneous Expense
1,295.00
21
Totals
87,390.00
87,390.00
CHART OF ACCOUNTSKelly ConsultingGeneral Ledger
ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary REVENUE 41 Fees Earned EXPENSES 51 Salary Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense 59Miscellaneous Expense
Labels Current assets Current liabilities Expenses For the Month Ended May 31, 2018 May 31, 2018 Property, plant, and equipment Amount Descriptions Change in retained earnings Net income Net loss Retained earnings, May 1, 2018 Retained earnings, May 31, 2018 Total assets Total current assets Total expenses Total liabilities Total liabilities and stockholders’ equity Total property, plant, and equipment Total stockholders’ equity 9. A. Prepare the closing entries on Page 8 of the journal. Refer to the Chart of Accounts for exact wording of account titles. 9. B. Add the appropriate posting reference to the journal in CengageNOW.PAGE 8
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
Closing Entries
2
3
4
5
6
7
8
9
10
11
12
13
14
8. A. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare an income statement. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare an income statement. Refer to the Chart of Accounts and the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred, enter that amount as a negative number using a minus sign. Enter all other amounts as positive numbers. A colon (:) will automatically appear if it is required.
Kelly Consulting
Income Statement
1
2
3
4
5
6
7
8
9
10
8. B. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare a retained earnings statement. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare a retained earnings statement. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Kelly Consulting
Retained Earnings Statement
1
2
3
4
5
8. C. If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures to prepare a balance sheet. If you didn’t complete the end-of-period work sheet in Part 1, use the ledger (the Excel spreadsheet) to prepare a balance sheet. Refer to the Chart of Accounts and the Labels and Amount Descriptions list for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Kelly Consulting
Balance Sheet
1
Assets
2
3
4
5
6
7
8
9
10
11
12
13
14
Liabilities
15
16
17
18
19
20
Stockholders’ Equity
21
22
23
24
10. Prepare a post-closing trial balance. Accounts with zero balances can be left blank.
Kelly Consulting
POST-CLOSING TRIAL BALANCE
May 31, 2018
ACCOUNT TITLE DEBIT CREDIT1
Cash
2
Accounts Receivable
3
Supplies
4
Prepaid Rent
5
Prepaid Insurance
6
Office Equipment
7
Accumulated Depreciation
8
Accounts Payable
9
Salaries Payable
10
Unearned Fees
11
Common Stock
12
Retained Earnings
13
Totals
Explanation / Answer
Income statement Fees earned 40000 Expenses Salary expense 1705 Rent expense 1600 Supplies expense 1370 Depreciation expense 330 Insurance expense 275 Miscellaneous expense 1295 Total expense 6575 Net income 33425 Retained earnings statement Beginning 12300 Net income 33425 Dividend -10500 Ending retained earnings 35225 Balance sheet Assets Cash 44195 Accounts receivable 8080 Supplies 715 Prepaid rent 1600 prepaid insurance 1225 Total current assets 55815 Office equipment 14500 Accumulated depreciation office equipment -660 13840 Total assets 69655 Liabilities and stokholders equity Accounts payable 895 Salaries payable 325 Unearned fees 3210 Total current liabilities 4430 Common stock 30000 Retained earnings 35225 Total stockholders equity 65225 Total liabilities and stockholders equity 69655 Closing entries Fees earned 40000 Income summary 40000 Income summary 6575 Salary expense 1705 Rent expense 1600 Supplies expense 1370 Depreciation expense 330 Insurance expense 275 Miscellaneous expense 1295 Income summary 33425 Retained earnings 33425 Retained earnings 10500 Dividends 10500 Post closing trail balance Cash 44195 Accounts receivable 8080 Supplies 715 Prepaid rent 1600 prepaid insurance 1225 Office equipment 14500 Accumulated depreciation office equipment 660 Accounts payable 895 Salaries payable 325 Unearned fees 3210 Common stock 30000 Retained earnings 35225 Total 70315 70315
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