Part 3 Jan 2 Completed a consulting engagement and received cash of $7,200. 2 Pr
ID: 2577594 • Letter: P
Question
Part 3
Jan 2 Completed a consulting engagement and received cash of $7,200.
2 Prepaid three months’ office rent, $1,500.
7 Purchased software inventory on account, $3,900, plus freight in, $100.
15 Withdrew $500 for personal use.
18 Sold software on account, $1,100 (cost $700).
19 Consulted with a client for a fee of $900 on account.
20 Paid the secretary’s salary for the month. - $4000
21 Paid on account, $2,000.
24 Paid utilities, $300.
28 Sold software for cash, $600 (cost $400).
31 Recorded these adjusting entries:
a) Accrued salary expense.
b) Depreciation of computer and furniture.
c) Expiration of prepaid rent.
d) Expiration of prepaid insurance.
e) Physical count of inventory, $2,800.
f) Dixie Lewis estimates that 3% of inventory sold will be returned
Required
1) Prepare journal entries for the above transactions and post these entries to the ledger.
2) Prepare adjusting entries on January 31 and post to the ledger.
3) Prepare an adjusted trial balance, an income statement, a statement of owner’s equity, and a balance sheet as of / on January 31, 2018.
4) Prepare closing entries at January 31, 2018 and post to the ledger.
5) Prepare a post-closing trial balance on January 31, 2018.
6) Write a letter to the CEO explaining the financial position of the company
I need help with the Jan 31 Adjusting entries E & F.
Dixie Lewis gathers the following information for adjusting entries on December 31 a) Accrued service revenue, $400 b) Earned 1/3 of the service revenue collected in advance on December 22 c) Supplies on hand, $100 d) Both the computer and the furniture need to be depreciated for a full month e) Record the secretary's salary since being hired, she has now worked 1/3 of the month f) Record expiration of prepaid insurance Required 1) Prepare adjusting entries for the above transactions 2) Post these entries to the ledger 3) Prepare an adjusted trial balance, an income statement, a statement of owner's equity and a balance sheet as of / on December 31, 2017 4) Prepare closing entries at December 31, 2017 and post to the ledger 5) Prepare a post-closing trial balance on December 31, 2017 6) Write a letter to the CEO explaining the current financial position of the companyExplanation / Answer
E)
CLOSING INVENTORY A/C DR 2800
TO INCOME STATEMENT A/C 2800
(being closing inventory posted to statement)
F)
INCOME STATEMENT A/C DR 51
TO ALLOWANCE FOR SALES RETURN A/C 51
(being provision created on expected sales return)