Please include the problem number with every answer, thank you. During the month
ID: 2414715 • Letter: P
Question
Please include the problem number with every answer, thank you.
During the month of October of the current year, Dan’s Accounting Service was opened. The following transactions occurred.
Oct 1 Dan sold $70,000 worth of stock (50 shares) to start the business.
Oct 1 Dan purchased $9,500 worth of office equipment on account from Keene’s
Furniture Supply.
Oct 1 Dan paid October’s rent on the office. He wrote a check for $2,500.
Oct 2 Dan purchased $400 worth of office supplies for cash.
Oct 4 The telephone was installed. We paid $95 (Utilities Expense).
Oct 4 Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).
Oct 4 Dan started a petty cash fund with $50 for a fund balance.
Oct 5 We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).
Oct 5 A three-month umbrella insurance policy was purchased for $720 (cash).
Oct 7 Bebus’s Automotive Supply Company paid us $2,800 (cash) for setting up their
books.
Oct 9 We earned $3,200 from Dietz’s Fine Furniture Company for setting up their
books. They will pay us later.
Oct 12 We paid a part-time employee $90 for running errands. There are no taxes to be
withheld.
Oct 14 Smith’s Food Service, Inc. paid us $1,700 for helping them with their taxes.
The actual bill was for $3,500. They will pay us the rest next month.
Oct 19 We paid our part-time employee $80 for running errands. There are no taxes to be
withheld.
Oct 23 We sent a check for $1,000 to Keene’s Furniture Supply for the office equipment
purchased on October 1st.
Oct 26 We earned $800 for consulting with Anderson’s Clothing Outlet. They will pay
us later.
Oct 26 We paid our part-time employee $50 for running errands. There are no taxes to
be withheld.
Oct 30 Dietz’s Fine Furniture Company paid us $900 on account for the work we did
for them on October 9.
Oct 30 Dan paid the stockholders $600 in dividends.
Oct 31 Dan paid the electric bill which was $90.
Oct 31 Dan replenished the petty cash fund. He had used $12 for office supplies and $18
for miscellaneous expenses.
REQUIRED:
1)Journalize the following entries using the accounts from the Chart of Accounts.
Be sure to use asset accounts instead of expense accounts whenever possible.
2)Post the transactions to the ledger. (Use T- Accounts.)
3)Prepare a trial balance as of October 31 of the current year.
4)Journalize the following adjusting entries:
A)Ed determines that there was $250 worth of supplies still on hand.
B)One month of insurance was been used.
C)The depreciation on our office equipment is $250.
D)Our part-time employee has earned $40 so far this week. She will be paid next month for the full week’s work.
5)Post the adjusting entries.
6)Prepare an adjusted trial balance.
7)Prepare an Income Statement (don’t forget the Earnings Per Share), Statement of Retained Earnings and a Classified Balance Sheet.
8)Journalize the closing entries.
9)Post the closing entries.
10)Prepare a post-closing trial balance.
DAN’S ACCOUNTING SERVICE
CHART OF ACCOUNTS
101 Cash
102 Petty Cash
108 Accounts Receivable
112 Office Supplies
118 Prepaid Insurance
201 Office Equipment
202 Accumulated Depreciation—Office Equipment
301 Accounts Payable
308 Wages Payable
511 Contributed Capital
512 . Retained Earnings
513 . Dividends
611 . Professional Fees
810 Advertising Expense
815 . Depreciation Expense
820 Insurance Expense
825 Miscellaneous Expense
830 Office Supplies Expense
835 Rent Expense
840 . Utilities Expense
845 Wages Expense
Explanation / Answer
1.
2.
3.
4.
6.
8.
10.
Dan's Accounting Services General journal for the month of October Date Account Title Debit Credit Oct.1 Cash 70000 contributed Capital 70000 (Cash contributed by the owner) Oct.1 Office Equipment 9500 Accounts Payable 9500 (Purchase of office equipment) Oct.1 Rent Expense 2500 Cash 2500 (Payment of rent for October) Oct.2 Office Supplies 400 Cash 400 (Office supplies purchased for cash) Oct.4 Utilities Expense 95 Cash 95 (Telephone installation expense) Oct.4 Advertising Expense 150 Cash 150 (Cash paid for advertising) Oct.4 Petty cash fund 50 Cash 50 (Started petty cash fund) Oct.5 Miscellaneous Expense 45 Cash 45 (Purchase of stamps) Oct.5 Prepaid Insurance 720 Cash 720 (Three month insurance policy) Oct.7 Cash 2800 Professional fee 2800 (Service provided for cash) Oct.9 Accounts Receivable 3200 Professional fee 3200 (Service provided on account) Oct.12 Wages Expense 90 Cash 90 (Receipt of cash from clients on account) Oct.14 Accounts Receivable 3500 Professional fee 3500 (Service provided on account) Cash 1700 Accounts Receivable 1700 (Collection for the above service) Oct.19 Wages Expense 80 Cash 80 (Receipt of cash from clients on account) Oct.23 Accounts Payable 1000 Cash 1000 (Payment made to creditor on account) Oct.26 Accounts Receivable 800 Professional fee 800 (Service provided on account) Oct.30 Cash 900 Accounts Receivable 900 (Collection from customer on account) Oct.30 Dividends 600 Cash 600 (Dividends Paid) Oct.31 Utilities Expense 90 Cash 90 (Electrivity bill paid) Oct.31 Office Supplies 12 Miscellaneous Expense 18 Cash 30 (Petty cash fund replenished)