For the past several years, Aaron Jones has operated a consulting business from
ID: 2427886 • Letter: F
Question
For the past several years, Aaron Jones has operated a consulting business from his home on a part-time basis. As of December 1, 20X1, Aaron decided to move to rented quarters and incorporate his business as Progress Consulting Inc. Progress Consulting entered into the following transactions during December: 1st Aaron Jones invested the following assets in the business: cash, $50,000; supplies, $10,000; and office equipment, $30,000. Mr. Jones received stock in an amount equal to his investment in the corporation. 2nd Paid $9,000 for rent for December 20X1 through February 28, 20X2. 3rd Paid $12,000 for a one year premium on property and casualty insurance. The policy covers the period December 1, 20X1 to November 30, 20X2. 4th Received $16,000 cash from a client as an advance payment for services to be performed in the future. 5th Purchased additional office equipment on account from Payne Company for $10,000. 10th Paid $7,500 for a newspaper advertisement that ran in today’s paper. 11th Paid Payne Company $3,000 for part of the debt incurred on December 5. 12th Billed clients for services performed on account, $5,800. 17th Received cash payment from client for services performed on this date, $14,000. 18th Paid $6,000 for supplies. 20th Billed clients for services performed on account, $15,000. 24th Received cash payment from client for services performed on this date, $2,000. 25th Received cash from clients as payment on account, $3,000. 30th Paid $750 for utilities for December. 31st Paid cash dividend of $5,000
Journalize each of the above transactions.
Post theses Journal entries to the ledger.Prepare an unadjusted trial balance as of December 31, 20X1. Journalize and post the adjusting entries using the following information:
a. Insurance expired during December is $1,000 Supplies on hand on December 31 are valued at $4,500. Depreciation of office equipment for December is $1,000. Rent expired during December is $3,000. Determined that the company had performed $4,000 of the services for which it was paid in advance on December 4th. f. Employee wages were left unpaid in the amount of $1,700 for the month of December. The employees will be paid the first week in January. Services were performed for a client on December 31 in the amount of $2,100. The client did not pay, nor has the client been billed. (hint: this transaction has not yet been journalized.) Prepare an adjusted trial balance. Using the adjusted trial balance, prepare an income statement, a statement of retained
earnings, and a balance sheet. Journalize and post the closing entries. Prepare a post-closing trial balance.
Explanation / Answer
December Account Title Dr Cr 1 Cash $50,000 Supplies 10000 equipment 30000 Common stock 90000 2 Prepaid Rent 9000 Cash 9000 3 Prepaid insurance 12000 Cash 12000 4 Cash 16000 Unearned Service Revenue 16000 5 Office equipment 10000 Accounts payable 10000 10 Adverstsiment Expenses 7500 Cash 7500 11 Accounts payable 3000 cash 3000 12 Accounts receivable 5800 Service Revenue 5800 17 cash 14000 Service Revenue 14000 18 supplies 6000 cash 6000 20 Accounts receivable 15000 Service Revenue 15000 24 cash 2000 Service Revenue 2000 25 Cash 3000 Accounts receivable 3000 30 Utilities expenses 750 cash 750 31 Net Income/Retained Eanings 5000 Cash 5000 Unadjusted trial balance as on 31, December Particulars Dr Cr Cash 41750 50000-9000-12000+16000-7500-3000+14000+3000-750+2000-6000-5000 Supplies 16000 Office equipment 40000 Prepaid rent 9000 Prepaid Insurance 12000 Accounts receivable 17800 Unearned service revenue 16000 Accounts payable 7000 Common stock 80000 Retained Earnings 5000 Service revenue 36800 Adverstsiment Expenses 7500 Utilities expenses 750 144800 144800 Adjusted trial balance as on 31, December Particulars Dr Cr Cash 41750 Supplies 4500 Office equipment 40000 Accumulated deprecition 1000 Prepaid rent 6000 Prepaid Insurance 11000 Accounts receivable 19900 Unearned service revenue 12000 Accounts payable 7000 Wages payable 1700 Common stock 80000 Retained Earnings 5000 Service revenue 42900 Adverstsiment Expenses 7500 Utilities expenses 750 Insurance expense 1000 Supplies expense 11500 Depreciation 1000 Rent Expense 3000 Wages expenses 1700 149600 149600 There are various parts so I have answered the above following