For the past several years, Jeff Horton has operated a part-time consulting busi
ID: 2481622 • 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
1. Journal entries for April 2016 :
Unadjusted Trial Balance as of April 30 2016:
Adjusting entries:
Date Account Titles Debit Credit April $ $ 1 Cash 20,000 Accounts receivable 14,700 Supplies 3,300 Office equipment 12,000 Common stock 50,000 1 Prepaid rent 6,000 Cash 6,000 2 Prepaid insurance 4,200 Cash 4,200 4 Cash 9,400 Unearned fees 9,400 5 Office equipment 8,000 Smith Office Supply Co. 8,000 6 Cash 11,700 Accounts receivable 11,700 10 Advertising expense 350 Cash 350 12 Smith Office Supply Co. 6,400 Cash 6,400 12 Accounts receivable 21,900 Service revenue 21,900 14 Salaries and wages expense 1,650 Cash 1,650 17 Cash 6,600 Service revenue 6,600 18 Supplies 725 Cash 725 20 Accounts receivable 16,800 Service revenue 16,800 24 Cash 4,450 Service revenue 4,450 26 Cash 26,500 Accounts receivable 26,500 27 Salaries and wages expense 1,650 Cash 1,650 29 Telephone expense 540 Cash 540 30 Utilities expense 760 Cash 760 30 Cash 5,160 Service revenue 5,160 30 Accounts receivable 2,590 Service revenue 2,590 30 Dividends 18,000 Cash 18,000