Instructions QuickBooks Consulting Co. (QBCC) started business on September 1, 2
ID: 2536914 • Letter: I
Question
Instructions
QuickBooks Consulting Co. (QBCC) started business on September 1, 2017. You have been hired as the accountant to complete the following:
Journalize QBCC’s first month of transactions in the general journal (descriptions notnecessary).
Post every journal entry recorded in the general journal to the general ledger.
Prepare an unadjusted trial balance at September 30, 2017 (Check Figure $103,210)
Journalize and post adjusting journal entries based on the adjustments data provided.
Prepare an adjusted trial balance at September 30, 2017 (Check Figure $108,660)
Prepare financial statements for QBCC for the month of September 2017. (Check Figure Total Assets $101,820)
Journalize and post-closing entries for September.
Prepare a post-closing trial balance at September 30, 2017 (Check Figure $102,070)
Here are the transactions for QBCC in September (first month of operations).
1.
Sep. 2
Friends and family contributed $60,000 to the business by buying the private stock of QuickBooks Consulting Co.
2.
Sep. 4
Purchased an annual insurance policy for $3,600. QBCC paid $1,000 immediately, with the balance due in 30 days.
3.
Sep. 5
Purchased an automobile that will be used to visit clients for $15,500 on account.
4.
Sep. 7
Purchased supplies for $520 cash.
5.
Sep. 10
Issued check for $1,700 to pay rent for September.
6.
Sep. 14
Performed consulting services for $17,750 cash.
7.
Sep. 20
Received $7,000 from a customer as an advance for consulting services to be performed in the remainder of September, October and November. [Hint: Amount should be recognized proportionately over the 21?3 months.]
8.
Sep. 27
Received an electricity bill for September for $360, payable in 30 days.
9.
Sep. 29
Withdrew $2,000 as a dividend.
Record adjusting entries for the month of September only.
Record September’s expired insurance expense.
Depreciation of automobile, $250. Record depreciation expense.
Supplies remaining at the end of the month, $340. Record supplies used.
Revenue earned from cash advance received from customer on September 20. Record 10 days only.
Services performed in September, $3,400, but cash not yet received. Record amount due from customers.
Accrued salaries for September, $1,800.
Chart of Accounts
Cash
Accounts Receivable
Prepaid Insurance
Supplies
Automobile
Accumulated Depreciation
Accounts Payable
Unearned Service Revenue
Salaries Payable
Common Stock
Retained Earnings
Dividends
Income Summary
Service Revenue
Rent Expense
Utilities Expense
Insurance Expense
Depreciation Expense
Supplies Expense
Salaries Expense
1.
Sep. 2
Friends and family contributed $60,000 to the business by buying the private stock of QuickBooks Consulting Co.
2.
Sep. 4
Purchased an annual insurance policy for $3,600. QBCC paid $1,000 immediately, with the balance due in 30 days.
3.
Sep. 5
Purchased an automobile that will be used to visit clients for $15,500 on account.
4.
Sep. 7
Purchased supplies for $520 cash.
5.
Sep. 10
Issued check for $1,700 to pay rent for September.
6.
Sep. 14
Performed consulting services for $17,750 cash.
7.
Sep. 20
Received $7,000 from a customer as an advance for consulting services to be performed in the remainder of September, October and November. [Hint: Amount should be recognized proportionately over the 21?3 months.]
8.
Sep. 27
Received an electricity bill for September for $360, payable in 30 days.
9.
Sep. 29
Withdrew $2,000 as a dividend.
Explanation / Answer
GENERAL JOURNAL Date Account Title Debit Credit Sep2 Cash $60,000 Common stock $60,000 Sep4 Prepaid insurance $3,600 Accounts payable $2,600 (3600-1000) Cash $1,000 Sep5 Automobile $15,500 Accounts payable $15,500 Sep7 Supplies $520 cash $520 Sep10 Rent expense $1,700 Cash $1,700 Sep14 Cash $17,750 Service revenue $17,750 Sep20 Cash $7,000 Unearned service revenue $7,000 Sep27 Utilities expense $360 Accounts payable $360 Sep30 Dividends $2,000 Cash $2,000 ADJUSTING ENTRIES Sep30 Insurance expense $ 300 (3600/12) Prepaid insurance $ 300 Sep30 Depreciation expense $250 Accumulated depreciation $250 Sep30 Supplies expense $180 (520-340) Supplies $180 Sep30 Unearned service revenue $ 778 Service revenue $ 778 (7000/3)*(10/30) Sep30 Accounts receivable $3,400 Service Revenue $3,400 Sep30 Salaries expense $1,800 Salaries payable $1,800 CASH Date Debit Credit Sep2 Common Stock $60,000 Sep4 Prepaid Insurance $1,000 Sep7 Supplies $520 Sep10 Rent expense $1,700 Sep14 Service revenue $17,750 Sep20 Unearned service revenue $7,000 Sep30 Dividends $2,000 Ending Balance $79,530 PREPAID INSURANCE Date Debit Credit Sep4 Accounts payable $2,600 Sep4 Cash $1,000 Ending Balance $3,600 SUPPLIES Date Debit Credit Sep7 Cash $520 AUTOMOBILE Date Debit Credit Sep5 Accounts payable $15,500 ACCOUNTS PAYABLE Date Debit Credit Sep4 Prepaid Insurance $2,600 Sep5 Automobile $15,500 Sep27 Utilities expense $360 Ending Balance $18,460 UNEARNED SERVICE REVENUE Date Debit Credit Sep20 Cash $7,000 COMMON STOCK Date Debit Credit Sep2 Cash $60,000 SERVICE REVENUE Date Debit Credit Sep14 Cash $17,750 RENT EXPENSE Date Debit Credit Sep10 Cash $1,700 UTILITIES EXPENSE Date Debit Credit Sep27 Accounts payable $360 DIVIDENDS Date Debit Credit Sep30 Cash $2,000 UNADJUSTED TRIAL BALANCE ACCOUNT DEBIT CREDIT Cash $79,530 Accounts Receivable $0 Supplies $520 Prepaid Insurance $3,600 Automobile $15,500 Accumulated depreciation $0 Accounts payable $18,460 Salaries payable $0 Unearned Service revenue $7,000 Common Stock $60,000 Service Revenue $17,750 Supplies expense $0 Insurance expense $0 Depreciation expense $0 Salaries expense $0 Utilities expense $360 Rent expense $1,700 Dividends $2,000 TOTAL $103,210 $103,210 ADJUSTED TRIAL BALANCE Unadjusted Adjustments on 30Sep ADJUSTED TRIAL BALANCE ACCOUNT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash $79,530 $79,530 Accounts Receivable $0 $3,400 $3,400 Supplies $520 $180 $340 Prepaid Insurance $3,600 $300 $3,300 Automobile $15,500 $15,500 Accumulated depreciation $0 $250 $250 Accounts payable $18,460 $18,460 Salaries payable $0 $1,800 $1,800 Unearned Service revenue $7,000 $778 $6,222 Common Stock $60,000 $60,000 Service Revenue $3,400 Service Revenue $17,750 $778 $21,928 (18528+3400) Supplies expense $0 $180 $180 Insurance expense $0 $300 $300 Depreciation expense $0 $250 $250 Salaries expense $0 $1,800 $1,800 Utilities expense $360 $360 Rent expense $1,700 $1,700 Dividends $2,000 $2,000 TOTAL $108,660 $108,660 INCOME STATEMENT Service Revenue $21,928 Supplies expense $180 Insurance expense $300 Depreciation expense $250 Salaries expense $1,800 Utilities expense $360 Rent expense $1,700 Total expenses $4,590 Operating Income $17,338 Retained Earning Operating Income $17,338 Dividend $2,000 Retained Earning $15,338 BALANCE SHEET ASSETS: Cash $79,530 Accounts Receivable $3,400 Supplies $340 Prepaid Insurance $3,300 Automobile $15,500 Accumulated depreciation ($250) Total Assets $101,820 LIABILITIES: Accounts payable $18,460 Salaries payable $1,800 Unearned Service revenue $6,222 Total Liabilities $26,482 Shareholders Equity: Common Stock $60,000 Retained Earning $15,338 Total Shareholders Equity $75,338 Total Liabilities and Shareholders Equity $101,820