4- 8i Comprehensive Problem 1 Kelly Pitney began her consulting business, Kelly
ID: 2587652 • Letter: 4
Question
4- 8i Comprehensive Problem 1
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions:
Record the following transactions on Page 6 of the journal:
Instructions
1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2019, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consulting's chart of accounts. (Do not insert the account numbers in the journal at this time.)
2. Post the journal to a ledger of four-column accounts.
3. Prepare an unadjusted trial balance.
4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).
a. Insurance expired during May is $275.
b. Supplies on hand on May 31 are $715.
c. Depreciation of office equipment for May is $330.
d. Accrued receptionist salary on May 31 is $325.
e. Rent expired during May is $1,600.
f. Unearned fees on May 31 are $3,210.
5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner's equity, and a balance sheet.
Answer - Check Figure: Net income, $33,425
9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.
10. Prepare a post-closing trial balance.
May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500. 5. Received cash from clients on account, $2,450. 9. Paid cash for a newspaper advertisement, $225. 13. Paid Office Station Co. for part of the debt incurred on April 5, $640. 15. Provided services on account for the period May 1–15, $9,180. 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750. 17. Received cash from cash clients for fees earned during the period May 1–16, $8,360.Explanation / Answer
Kelly Consulting General Journal Date Journal Amount (DR) Amount (CR) 3-May Cash $ 4,500.00 To Unearned Fees $ 4,500.00 (Being advance payment received from customer) 5-May Cash $ 2,450.00 To Accounts Receivable $ 2,450.00 (Being amount of on account payment received) 9-May Advertisement $ 225.00 To cash $ 225.00 (Being amount paid for newspaper advertisement) 13-May Account Payable $ 640.00 To Cash $ 640.00 (Being amt paid to office station company for part of debt incurred on 5th April 15-May Accounts Receivable $ 9,180.00 To Fees Earned $ 9,180.00 (Being amount of service performed on account) 16-May Salary $ 630.00 Salary Payable $ 120.00 To Cash $ 750.00 (Being amount of tax service performed on account 17-May Cash $ 8,360.00 To Fees Earned $ 8,360.00 (Being amount received for service provided between 1 to 16 may) 20-May Supplies $ 735.00 To Accounts Payable $ 735.00 (Being amount of supplies received on account) 21-May Accounts Receivable $ 4,820.00 To Fees Earned $ 4,820.00 (Being amount of service performed on account for the period 16 to 20 may) 25-May Cash $ 7,900.00 To Fees Earned $ 7,900.00 (Being amount of cash received for service performed between 17-23 may 27-May Cash $ 9,520.00 To Accounts Receivable $ 9,520.00 (Being amount of cash received from clients) 28-May Salary $ 750.00 To Cash $ 750.00 (Being amount paid for receptionist for two weeks salary) 30-May Telephone Expenses $ 260.00 To Cash $ 260.00 (Being amount paid for telephone exp) 31-May Electricity Expenses $ 810.00 To Cash $ 810.00 (Being amount paid for electricity exp) 31-May Cash $ 3,300.00 To Fees Earned $ 3,300.00 (Being amount of service revenue for the period 26-31 May 31-May Accounts Receivable $ 2,650.00 To Fees Earned $ 2,650.00 (Being amount of service provided on account) 31-May Drawings $ 10,500.00 To cash $ 10,500.00 (Being amount of cash withdraw by Mike Shaw) 31-May Insurance A/c $ 275.00 To Prepaid Insurance $ 275.00 (Being amount of Prepaid insurance transfer to Insurance A/c) 31-May Supplies Exenses $ 1,370.00 To Supplies $ 1,370.00 (Being amount of sulies expenses) 31-May Depreciation $ 330.00 To Accumulated Depreciation $ 330.00 (Being amount of Depreciation) 31-May Salary $ 325.00 To Salary Payable $ 325.00 (Being amount of Salary Payable) 31-May Rent A/c $ 1,600.00 To Prepaid Rent $ 1,600.00 (Being amount of Preaid rent trnasfer to rent a/c) 31-May Unearned Fees $ 3,790.00 To Fees Earned $ 3,790.00 (Being amount of fees earned)($7000-$3210) Cash A/c Balance Date Particular DR Cr Dr CR 1-May Balance 22100 3-May $ 4,500.00 $ 26,600.00 5-May $ 2,450.00 $ 29,050.00 9-May $ 225.00 $ 28,825.00 13-May $ 640.00 $ 28,185.00 16-May $ 750.00 $ 27,435.00 17-May $ 8,360.00 $ 35,795.00 25-May $ 7,900.00 $ 43,695.00 27-May $ 9,520.00 $ 53,215.00 28-May $ 750.00 $ 52,465.00 30-May $ 260.00 $ 52,205.00 31-May $ 810.00 $ 51,395.00 31-May $ 3,300.00 $ 54,695.00 31-May $ 10,500.00 $ 44,195.00 Accounts receivable Balance Date Particular DR Cr Dr CR 1-May Balance 3400 5-May $ 2,450.00 $ 950.00 15-May $ 9,180.00 $ 10,130.00 21-May $ 4,820.00 $ 14,950.00 27-May $ 9,520.00 $ 5,430.00 31-May $ 2,650.00 $ - $ 8,080.00 Supplies Balance Date Particular DR Cr Dr CR 1-May Balance $ 1,350.00 20-May $ 735.00 $ - $ 2,085.00 31-May Adjustment $ - 1370 $ 715.00 Prepaid Rent Balance Date Particular DR Cr Dr CR 1-May Balance $ 3,200.00 31-May Adjustment $ - 1600 $ 1,600.00 Prepaid Insurance Balance Date Particular DR Cr Dr CR 1-May Balance $ 1,500.00 31-May Adjustment $ - $ 275.00 $ 1,225.00 Office Equiment Balance Date Particular DR Cr Dr CR 1-May Balance $ 14,500.00 Accumulated Depreciation Balance Date Particular DR Cr Dr CR 1-May Balance $ 330.00 31-May Adjustment $ - 330 $ 660.00 Accounts Payable Balance Date Particular DR Cr Dr CR 1-May Balance $ 800.00 13-May $ 640.00 $ 1,440.00 20-May $ 735.00 $ 705.00 Salary Payable Balance Date Particular DR Cr Dr CR 1-May Balance $ 120.00 16-May $ 120.00 31-May $ 325.00 $ 325.00 Unearned Fees Balance Date Particular DR Cr Dr CR 1-May Balance $ 2,500.00 3-May $ 4,500.00 $ 7,000.00 31-May $ 3,790.00 $ 3,210.00 Kelly's Capital Balance Date Particular DR Cr Dr CR 1-May Balance $ 42,300.00 31-May Net Income $ 33,425.00 $ 75,725.00 31-May Drawings $ 10,500.00 $ 65,225.00 Kelly's Drawings Balance Date Particular DR Cr Dr CR 1-May Balance $ 10,500.00 $ 10,500.00 31-May $ 10,500.00 Salary Expenses Balance Date Particular DR Cr Dr CR 16-May $ 630.00 $ 630.00 28-May $ 750.00 $ 1,380.00 31-May $ 325.00 $ 1,705.00 Rent Exenses Balance Date Particular DR Cr Dr CR 31-May $ 1,600.00 $ 1,600.00 Supplies Expenses Balance Date Particular DR Cr Dr CR 31-May 1370 1370 Depreciation Balance Date Particular DR Cr Dr CR 31-May 330 330 Insuance Exp Balance Date Particular DR Cr Dr CR 31-May 275 275 Miscellaneous Exenses Balance Date Particular DR Cr Dr CR 9-May 225 225 30-May 260 485 31-May 810 1295
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