Accounting Cycle Review 4-4 (Part Level Submission) At June 30, 2017, the end of

Question

Accounting Cycle Review 4-4 (Part Level Submission)

At June 30, 2017, the end of its most recent fiscal year, Sheffield 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. Sheffield conducted the following transactions during July 2017, and adjusts its accounts monthly.

Adjustment data:

The chart of accounts for Sheffield 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 $5,650 Accounts receivable 1,300 Supplies 750 Accounts payable $430 Unearned service revenue 1,210 Common stock 3,900 Retained earnings 2,160 $7,700 $7,700 (a) Your answer is correct. Enter the July 1 balances in the ledger accounts Cash July 1 Bal. 5650 Accounts Receivable July 1 Bal. 1300 Supplies July 1 Bal. 750 Accounts Payable uly 1 Bal. 430 Unearned Service Revenue uly 1 Bal. 1210 Common Stock 3900 July 1 Bal. Retained Earnings July 1 Bal. 2160

Explanation / Answer

July 1

                                Equipment - debit           $26,400

                                                To Cash - credit                                 $4,800

                                                To Notes payable credit               $21,600

               

July 31

                                Insurance expense - debit           $300

                                ($3,600/12 months)

                                                To Prepaid insurance expense - Debit    $300

July 31

                                Rent expense - debit                     $4,300

                                ($8,6000/2 months)

                                                To Prepaid Rent - credit                                $4,300

July 31

                                Stock - supplies (closing) - debit                                $1,350

                                                To Purchase - Supplies - credit                 $1,350

July 31

                                Depreciation expenses - debit                                   $550

                                                To Accumulated depreciation expense - credit   $550

July 31

                                Interest expense -debit                                $108

                                ($21,600*6%/12 months)

                                                To Interest payable - credit         $108      

July 31  

                                Salary expense -debit                    $11,900

                                                To Salary payable -credit               $11,900

July 31

                                Utility expense - debit                   $860

                                                To Accounts payable - credit       $860

July 31

                                Income tax expenses - debit      $1,300

                                                To Income tax payable - credit $1,300

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