Please, I need help with h). Thank you. Accounting Cycle Review 4-4 (Part Level
ID: 2581704 • Letter: P
Question
Please, I need help with h). Thank you.
Accounting Cycle Review 4-4 (Part Level Submission) At June 30, 2017, the end of its most recent fiscal year, Concord Computer Consultants' post-closing trial balance was as follows: Debit Credit Cash Accounts receivable Supplies Accounts payable Unearned service revenue Common stock Retained earnings $5,750 1,320 760 $440 1,230 4,000 2,160 $7,830 $7,830 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Concord conducted the following transactions during July 2017, and adjusts its accounts monthly July 1 2 3 3 6 Purchased equipment, paying $4,400 cash and signing a 2-year note payable for $22,000. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month Issued 22,000 shares of common stock for $55,000 cash Paid $4,200 cash for a 12-month insurance policy effective July 1 Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $4,400 per month Paid $4,200 for supplies. 9 Visited client offices and agreed on the terms of a consulting project. Concord will bill the client, Connor Productions, on the 10 13 14 16 18 20 20 20th of each month for services performed Collected $1,320 cash on account from Milani Brothers. This client was billed in June when Concord performed the service Performed services for Fitzgerald Enterprises. This client paid $1,230 in advance last month. All services relating to this payment are now completed Paid $440 cash for a utility bill. This related to June utilities that were accrued at the end of June Met with a new client, Thunder Bay Technologies. Received $13,200 cash in advance for future services to be performed Paid semi-monthly salaries for $12,100 Performed services worth $30,800 on account and billed customers. Received a bill for $2,400 for advertising services received during July. The amount is not due until August 15 Performed the first phase of the project for Thunder Bay Technologies. Recognized $11,000 of revenue from the cash advance received July 16 Received $16,500 cash from customers billed on July 20 27 Adjustment data Adjustment of prepaid insurance Adjustment of prepaid rent. Supplies used, $1,400 Equipment depreciation, $550 per month Accrual of interest on note payable Salaries for the second half of July, $12,100, to be paid on August 1. Estimated utilities expense for July, $880 (invoice will be received in August) Income tax for July, $1,320, will be paid in August 1. 2. 3. 4. 5. 6. 7. 8. The chart of accounts for Concord Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, Supplies Expense, and Utilities ExpenseExplanation / Answer
Date Account Titles and Explanations Debit Credit Jul-31 Service revenue 43030 Income Summary 43030 (To close revenue account) Jul-31 Income Summary 35610 Salaries and wages expense 24200 Rent expense 4400 Advertising expense 2400 Supplies expense 1400 Utilities expense 880 Depreciation expense 550 Insurance expense 350 Interest expense 110 Income tax expense 1320 (To close expense accounts) Jul-31 Retained Earnings 7420 Income Summary ($43030 - $35610) 7420 (To close net income to retained earnings) Retained Earnings July 1 Bal. 2160 Jul-31 7420 July 31 Bal. 9580 Service Revenue Jul-13 1230 Jul-20 30800 Jul-31 43030 Jul-23 11000 0 0 Salaries and Wages Expense Jul-18 12100 Jul-31 12100 Jul-31 24200 0 Rent Expense Jul-31 4400 Jul-31 4400 0 0 Advertising Expense Jul-20 2400 Jul-31 2400 0 0 Supplies Expense Jul-31 1400 Jul-31 1400 0 0 Utilities Expense Jul-31 880 Jul-31 880 0 0 Depreciation Expense Jul-31 550 Jul-31 550 0 0 Insurance Expense Jul-31 350 Jul-31 350 0 0 Interest Expense Jul-31 110 Jul-31 110 0 0 Income Tax Expense Jul-31 1320 Jul-31 1320 0 0 Income Summary Jul-31 35610 Jul-31 43030 Jul-31 7420 0 0