At June 30, 2017, the end of its most recent fiscal year, Riverbed Computer Cons

Question

At June 30, 2017, the end of its most recent fiscal year, Riverbed Computer Consultants' post-closing trial balance was as follows: Debit Credit $5,330 1,220 700 Cash Accounts recelvable Supplies Accounts payable Unearned service revenue Common stock $410 1,140 3,700 2,000 Retained earmnings75o $7,20 $7,250 The company underwent a major expansion in July. New staff was hired and more fnancing was obtained, Riverbed conducted the following transactions during July 2017, and adjusts its acc monthly July 1 P chased euipment, paying *3,600 cash and sig ing a 2-year note payable for 20 40 . The equipment has a 4-year useful te me note has a 6% interest at which is payable first day of each following month. issued 20,400 shares of commin stock for $51,000 cash. 3 Paid $3,600 cash for a 12-morth insurance policy effective July 1 3 Paid the first 2 (uly and August 2017) months' rent for an annual lease of office space for $4,100 per month. 6 Paid $3,900 for supplies 9 Visited dlient offices and agreed on the terms of a consulting project. Riverbed will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,220 cash on account from Milani Brothers. This client was billed in June when Riverbed performed the service 13 Performed services for Fitzgerald Enterprises. This client paid $1,140 in advance last month. All services relating to this payment are now completed 14 Paid $410 cash for a utility bill. This related to June ubilties that were accrued at the end of June 16 Met with a new clent, Thunder Bay Technologies. Received $12,200 cash in advance for future services to be performed 18 Paid semi-monthly salaries for $11,200. 20 Performed services worth $28,600 on account and bitled customers 20 Received a bill for $2,200 for advertising services received duning July. The amount is not due until August is 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,200 of revenue from the cash advance received July 16 27 Received $15,300 cash from customers billed on July 20

Explanation / Answer

RIVERBED COMPUTER CONSULTANTS General journal for the month of July 2017 Date Account title Debit Credit July.1 Equipment 24000 Cash 3600 Note payable 20400 (To record purchase of equipment ) July.2 Cash 51000 Common stock 51000 (To record issue of 20,400 shares of common stock) July.3 Prepaid insurance 3600 Cash 3600 (To record payment of one-year insurance premum) July.3 Prepaid rent 8200 Cash 8200 (To record payment of rent for July and August) July.6 Supplies 3900 Cash 3900 (To record purchase of supplies for cash) July.10 Cash 1220 Accounts Receivable 1220 (To record collection from customer) July.13 Unearned service revenue 1140 Service revenue 1140 (To record service performed against advance received) July.14 Accounts Payable 410 Cash 410 (To record payment of itlity bill for June) July.16 Cash 12200 Unearned service revenue 12200 (To record advance received for service to be performed in future) July.18 Salaries expense 11200 Cash 11200 (To record payment of salaries) July.20 Accounts Receivable 28600 Service revenue 28600 (To record service performed on account) July.20 Advertising expenses 2200 Accounts Payable 2200 (To record the advertising bill for July) July.23 Unearned service revenue 10200 Service revenue 10200 (To record service revenue recognized against advance received) July.27 Cash 15300 Accounts Receivable 15300 (To record cash received from customers on account) RIVERBED COMPUTER CONSULTANTS Adjustment journal entries for the month of July 2017 Date Account title Debit Credit July.31 Insurance epense 300 Prepaid insurance 300 (To record insurance expired for July) July.31 Rent expense 4100 Prepaid rent 4100 (To record rent expense for July) July.31 Supplies expense 1300 Supplies 1300 (To record supplies used during July) July.31 Depreciation expense 500 Accumulated depreciation - equipment 500 (To record depreciation expense for July) July.31 Interest expense 102 Interest payable 102 (To record interest accrued for July - $20,400 x 6% / 12) July.31 Salaries expense 11200 Salaries and wages payable 11200 (To record salaries for secod half of July) July.31 Utilities expense 820 Accounts payable 820 (To record estimated utilities expense for July) July.31 Income tax expense 1220 Income tax payable 1220 (To record income tax expense for July)

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