For the past several years, Jeff Horton has operated a part-time consulting busi
ID: 2499453 • 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: 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. Record the following transactions on Page 2 of the journal: Apr. 17 Recorded cash from cash clients for fees earned during the period April 1–16, $6,600. 18 Paid cash for supplies, $725. 20 Recorded services provided on account for the period April 13–20, $16,800. 24 Recorded cash from cash clients for fees earned for the period April 17–24, $4,450. 26 Received cash from clients on account, $26,500. 27 Paid receptionist for two weeks’ salary, $1,650. 29 Paid telephone bill for April, $540. 30 Paid electricity bill for April, $760. 30 Recorded cash from cash clients for fees earned for the period April 25–30, $5,160. 30 Recorded services provided on account for the remainder of April, $2,590. 30 Paid dividends, $18,000. Required: 1. Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. Add the appropriate posting reference to the journal. 3. Prepare an unadjusted trial balance. 4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6). • Insurance expired during April is $350. • Supplies on hand on April 30 are $1,225. • Depreciation of office equipment for April is $400. • Accrued receptionist salary on April 30 is $275. • Rent expired during April is $2,000. • Unearned fees on April 30 are $2,350. 5. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the work sheet. 6. A. Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on April 30. B. Post the adjusting entries, inserting balances in the accounts affected. 7. Prepare an adjusted trial balance. 8. A. Prepare an income statement for the month ended April 30, 2016. Be sure to complete the statement heading. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. B. Prepare a retained earnings statement for the month ended April 30, 2016. Be sure to complete the statement heading. If a net loss has been incurred or there has been a decrease in retained earnings, enter that amount as a negative number using a minus sign. Use the list of Labels and Amount Descriptions for the correct wording of text items. C. Prepare a balance sheet as of April 30, 2016. Be sure to complete the statement heading. Fixed assets must be entered in order according to account number. Use the list of Labels and Amount Descriptions for the correct wording of text items other account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. 9. A. Journalize the closing entries on page 4 of the journal. B. Post the closing entries, inserting balances in the accounts affected. Leave the ITEM column BLANK for each row. If the account balance is zero (0) after closing entries are posted, enter a zero (0) in the account's normal balance column. 10. Prepare a post-closing trial balance.
Explanation / Answer
Journal Entries
Unadjusted Trial Balance
Adjusted trial balance
Note: As the question is too long please post the question in part.
Details Dr Cr Cash 20000 accounts receivable 14,700 supplies 3,300 office equipment 12,000 Stock A/c 50,000 Rent 6,000 cash 6,000 Insurance exp 4,200 cash 4,200 cash 9,400.00 Unearned Service Revenue 9,400.00 office equipment 8,000 Smith Office Supply Co 8,000 cash 11,700 accounts receivable 11,700 advertisement Exp 350 cash 350 Smith Office Supply Co 6,400 cash 6,400 accounts receivable 21,900 service Revenue 21,900 salary 1,650 cash 1,650 cash 6,600 service Revenue 6,600 supplies exp 725 cash 725 accounts receivable 16,800 service Revenue 16,800 cash 4,450 service Revenue 4,450 cash 26,500 accounts receivable 26,500 salary 1,650 cash 1,650 Utility Expense 540 cash 540 Utility Expense 760 cash 760 cash 5,160 Service Revenue 5,160 accounts receivable 2,590 Service Revenue 2,590 Drawings 18,000 cash 18,000