For the past several years, Jeff Horton has operated a part-time consulting busi
ID: 2452216 • Letter: F
Question
For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2016, Jeff decided to move to rented quarters and to operate the business, which was to be known as Rosebud Consulting, on a full-time basis. Rosebud Consulting entered into the following transactions during April:
Record the following transactions on Page 2 of the journal:
Apr. 1 The following assets were received from Jeff Horton in exchange for common stock: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. There were no liabilities received. 1 Paid three months’ rent on a lease rental contract, $6,000. 2 Paid the premiums on property and casualty insurance policies, $4,200. 4 Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400. 5 Purchased additional office equipment on account from Smith Office Supply Co., $8,000. 6 Received cash from clients on account, $11,700. 10 Paid cash for a newspaper advertisement, $350. 12 Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400. 12 Recorded services provided on account for the period April 1–12, $21,900. 14 Paid receptionist for two weeks’ salary, $1,650.Explanation / Answer
Date Accounts and explanation Debit ($) Credit($) Apr-01 Cash 20000 Accounts Receivable 14700 Supplies 3300 Office Equipment 12000 Common Stock 50000 (assets were received from Jeff Horton in exchange for common stock) 1 Prepaid Rent 6000 cash 6000 (Paid three months’ rent on a lease rental contract) 2 Insurance Premium 4200 Cash 4200 (Paid the premiums on property and casualty insurance policies) 4 Cash 9200 Unearned Fees 9200 (Received cash from clients as an advance payment for services to be provided) 5 Office Equipment 8000 Accounts Payable 8000 (Purchased additional office equipment on account ) 6 Cash 11700 Accounts receivable 11700 (Received cash from clients on account) 10 Advertisement Expense 350 Cash 350 (Paid cash for a newspaper advertisement) 12 Accounts Payable 6400 Cash 6400 (Paid Smith Office Supply Co. for part of the debt incurred on April 5) 12 Accounts receivable 21900 Service Fees 21900 (Recorded services provided on account for the period April 1–12) 14 Salary 1650 Cash 1650 (Paid receptionist for two weeks’ salary) 17 cash 6600 Service Fees 6600 (Recorded cash from cash clients for fees earned) 18 Supplies 725 Cash 725 (Paid cash for supplies) 20 Accounts Receivable 16800 Service Fees 16800 (Recorded services provided on account) 24 Cash 4450 Service Fees 4450 (Recorded cash from cash clients for fees earned) 26 Cash 26500 Accounts receivable 26500 (Received cash from clients on account) 27 Salary 1650 Cash 1650 (Paid receptionist for two weeks’ salary) Apr-29 Telephone Expenses 540 Cash 540 (Paid telephone bill) 29 Electricity expenses 760 Cash 760 (paid electricity bill) 30 cash 5160 Service Fees 5160 (Recorded cash from cash clients for fees earned) 30 Accounts receivable 2590 Service Fees 2590 (Recorded services provided on account ) 30 Dividend 18000 Cash 18000 Cash Date particulars amount Date particulars amount Apr-01 balance b/f 20000 Apr-01 prepaid Rent 6000 Apr-04 Unearned fees 9200 Apr-02 Insurance Premium 4200 Apr-06 Accounts receivable 11700 Apr-10 Advertising Expense 350 Apr-17 service Fees 6600 Apr-12 Accounts Payable 6400 Apr-24 service fees 4450 Apr-14 Salary 1650 Apr-26 Accounts receivable 26500 Apr-18 Supplies 725 Apr-30 Service fees 5160 Apr-27 Salary 1650 Apr-29 telephone expense 540 Apr-29 Electricity expenses 760 Apr-30 dividend 18000 Apr-30 Balance c/f 43335 83610 83610 prepaid rent Date particulars amount Date particulars amount Apr-01 Cash 6000 Apr-30 Balance c/f 6000 6000 6000 accounts receivable Date particulars amount Date particulars amount Apr-01 balance b/f 14700 Apr-06 Cash 11700 Apr-12 Service Fees 21900 Apr-26 Cash 26500 Apr-20 Service Fees 16800 Apr-30 Balance c/f 17790 Apr-30 Service Fees 2590 55990 55990 supplies Date particulars amount Date particulars amount Apr-01 balance b/f 3300 Apr-18 cash 725 Apr-30 Balance c/f 4025 4025 4025 office equipment Date particulars amount Date particulars amount Apr-01 balance b/f 12000 Apr-05 Accounts Payable 8000 Apr-30 Balance c/f 20000 20000 20000 common stock Date particulars amount Date particulars amount Apr-30 Balance c/f 50000 Apr-01 Balance b/f 50000 50000 50000 Unearned Fees Date particulars amount Date particulars amount Apr-30 Balance c/f 9200 Apr-04 Cash 9200 9200 9200 Accounts Payable Date particulars amount Date particulars amount Apr-12 Cash 6400 Apr-05 Office Equipment 8000 Apr-30 Balance c/f 1600 8000 8000 Advertising Expense Date particulars amount Date particulars amount Apr-10 Cash 350 Apr-30 Balance c/f 350 350 350 Service Fees Date particulars amount Date particulars amount Apr-12 Accounts receivable 21900 Apr-17 Cash 6600 Apr-20 Accounts receivable 16800 Apr-24 Cash 4450 Apr-30 Cash 5160 Apr-30 balance c/f 57500 Apr-30 Accounts receivable 2590 57500 57500 Salary Date particulars amount Date particulars amount Apr-14 Cash 1650 Apr-30 Balance c/f 3300 Apr-27 Cash 1650 3300 3300 Telephone expense Date particulars amount Date particulars amount Apr-29 Cash 540 Apr-30 Balance c/f 540 540 540 Electricity Expense Date particulars amount Date particulars amount Apr-29 Cash 760 Apr-30 Balance c/f 760 760 760 Dividend Date particulars amount Date particulars amount Apr-30 cash 18000 Apr-30 Balance c/f 18000 18000 18000 Unadjusted Trial Balance Debit ($) Credit($) Cash 43335 Prepaid rent 6000 Accounts receivable 17790 Supplies 4025 Office equipment 20000 Common Stock 50000 Unearned Fees 9200 Accounts Payable 1600 Advertising Expense 350 Service Fees 57500 salary 3300 Telephone Expense 540 Electricity expense 760 Dividend 18000 Insurance Premium 4200 118300 118300 Adjustment Entries Date Accounts and explanation Debit ($) Credit($) Apr-30 Insurance Expense 350 Prepaid Insurance 350 (Insurance expired during April is $350) Apr-30 Supplies Expense 2800 Supplies 2800 (Supplies expense of 4025-1225 = $2800 recorded) Apr-30 Depreciation Expense 400 Office equipment 400 (depreciation on office expense charged to the asset account and recorded) Apr-30 Salary 275 Salary Accrued 275 (Accrued receptionist salary recorded) Apr-30 Rent Expense 2000 Prepaid rent 2000 (rent expired) Apr-30 Unearned fees 7050 Service fees 7050 (Unearned fees of 9400-2350 = $7050 adjusted against service revenue)