For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July:

Jul. 1 The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received.

1 Paid two months’ rent on a lease rental contract, $4,800.

2 Paid the annual premiums on property and casualty insurance policies, $4,500.

4 Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500.

5 Purchased additional office equipment on account from Office Station Co., $6,500.

6 Received cash from clients on account, $15,300.

10 Paid cash for a newspaper advertisement, $400.

12 Paid Office Station Co. for part of the debt incurred on July 5, $5,200.

12 Recorded services provided on account for the period July 1–12, $13,300.

14 Paid receptionist for two weeks’ salary, $1,750.

Record the following transactions on Page 2 of the journal:

Jul. 17 Recorded cash from cash clients for fees earned during the period July 1–17, $9,450.

18 Paid cash for supplies, $600.

20 Recorded services provided on account for the period July 13–20, $6,650.

24 Recorded cash from cash clients for fees earned for the period July 17–24, $4,000.

26 Received cash from clients on account, $12,000.

27 Paid receptionist for two weeks’ salary, $1,750.

29 Paid telephone bill for July, $325.

31 Paid electricity bill for July, $675.

31 Recorded cash from cash clients for fees earned for the period July 25–31, $5,200.

31 Recorded services provided on account for the remainder of July, $3,000.

31 Paid dividends, $12,500.

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.

A. Post the journal to a ledger of four-column accounts.

• Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the July transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

B. Add the appropriate posting reference to the journal in CengageNOW.

3. Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.

4. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6).

A. Insurance expired during July is $375.

B. Supplies on hand on July 31 are $1,525.

C. Depreciation of office equipment for July is $750.

D. Accrued receptionist salary on July 31 is $175.

E. Rent expired during July is $2,400.

F. Unearned fees on July 31 are $2,750.

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. Find a blank end-of-period work sheet in the Excel spreadsheet you previously downloaded.

6.

A. Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles.

B. Post the adjusting entries, inserting balances in the accounts affected.

C. Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW.

7. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

CHART OF ACCOUNTSDiamond ConsultingGeneral Ledger

ASSETS

11 Cash

12 Accounts Receivable

14 Supplies

15 Prepaid Rent

16 Prepaid Insurance

18 Office Equipment

19 Accumulated Depreciation

LIABILITIES

21 Accounts Payable

22 Salaries Payable

23 Unearned Fees

EQUITY

31 Common Stock

32 Retained Earnings

33 Dividends

34 Income Summary

REVENUE

41 Fees Earned

EXPENSES

51 Salary Expense

52 Rent Expense

53 Supplies Expense

54 Depreciation Expense

55 Insurance Expense

59 Miscellaneous Expense

Transcribed Image Text:1. Jourmalize each transaction in a two-column jourmal starting on Page 1, refeming 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. B. Add the appropriate posting reference to the joumal in CengageNOW. 6. A. Joumalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. 6. C. Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW. JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST, REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 2 4 7 10 11 12 13 14 15 16 17 18 19 20 21 22 23 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITICS EQUITY 2 4 10 11 12 13 14 15 16 17 18 19 20 21 22 JOURNAL ACCOUNTINO EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Adjusting Entries 2 4 10 11 12 13
Transcribed Image Text:3. Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank Diamond Consulting UNADJUSTED TRIAL BALANCE July 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Supplies 4 Prepaid Rent 5 Prepaid Insurance E Office Equipment 7 Accumulated Depreciation a Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 15 Salary Expense 14 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals 7. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank. Diamond Consulting ADJUSTED TRIAL BALANCE July 31, 2018 ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Supplies 4 Prepaid Rent 5 Prepaid Insurance E Office Equipment 7 Accumulated Depreciation a Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 15 Salary Expense 16 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals

Question

For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July:

Jul.	1	The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received.
	1	Paid two months’ rent on a lease rental contract, $4,800.
	2	Paid the annual premiums on property and casualty insurance policies, $4,500.
	4	Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500.
	5	Purchased additional office equipment on account from Office Station Co., $6,500.
	6	Received cash from clients on account, $15,300.
	10	Paid cash for a newspaper advertisement, $400.
	12	Paid Office Station Co. for part of the debt incurred on July 5, $5,200.
	12	Recorded services provided on account for the period July 1–12, $13,300.
	14	Paid receptionist for two weeks’ salary, $1,750.

Record the following transactions on Page 2 of the journal:

Jul.	17	Recorded cash from cash clients for fees earned during the period July 1–17, $9,450.
	18	Paid cash for supplies, $600.
	20	Recorded services provided on account for the period July 13–20, $6,650.
	24	Recorded cash from cash clients for fees earned for the period July 17–24, $4,000.
	26	Received cash from clients on account, $12,000.
	27	Paid receptionist for two weeks’ salary, $1,750.
	29	Paid telephone bill for July, $325.
	31	Paid electricity bill for July, $675.
	31	Recorded cash from cash clients for fees earned for the period July 25–31, $5,200.
	31	Recorded services provided on account for the remainder of July, $3,000.
	31	Paid dividends, $12,500.

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.

A.

Post the journal to a ledger of four-column accounts.

•

Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the July transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

B.

Add the appropriate posting reference to the journal in CengageNOW.

3.

Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.

4.

At the end of July, the following adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6).

A.	Insurance expired during July is $375.
B.	Supplies on hand on July 31 are $1,525.
C.	Depreciation of office equipment for July is $750.
D.	Accrued receptionist salary on July 31 is $175.
E.	Rent expired during July is $2,400.
F.	Unearned fees on July 31 are $2,750.

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. Find a blank end-of-period work sheet in the Excel spreadsheet you previously downloaded.

6.

A.	Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the adjusting entries, inserting balances in the accounts affected.
C.	Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW.

7.

Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

CHART OF ACCOUNTSDiamond ConsultingGeneral Ledger

	ASSETS
11	Cash
12	Accounts Receivable
14	Supplies
15	Prepaid Rent
16	Prepaid Insurance
18	Office Equipment
19	Accumulated Depreciation

	LIABILITIES
21	Accounts Payable
22	Salaries Payable
23	Unearned Fees

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends
34	Income Summary

	REVENUE
41	Fees Earned

	EXPENSES
51	Salary Expense
52	Rent Expense
53	Supplies Expense
54	Depreciation Expense
55	Insurance Expense
59	Miscellaneous Expense

1.
Jourmalize each transaction in a two-column jourmal starting on Page 1, refeming 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. B. Add the appropriate posting reference to the joumal in CengageNOW.
6. A. Joumalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31.
6. C. Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW.
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST, REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
2
4
7
10
11
12
13
14
15
16
17
18
19
20
21
22
23
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITICS
EQUITY
2
4
10
11
12
13
14
15
16
17
18
19
20
21
22
JOURNAL
ACCOUNTINO EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
Adjusting Entries
2
4
10
11
12
13

3. Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank
Diamond Consulting
UNADJUSTED TRIAL BALANCE
July 31, 2018
ACCOUNT TITLE
DEBIT
CREDIT
1 Cash
2 Accounts Receivable
3 Supplies
4 Prepaid Rent
5 Prepaid Insurance
E Office Equipment
7 Accumulated Depreciation
a Accounts Payable
9 Salaries Payable
10 Unearned Fees
11 Common Stock
12 Retained Earnings
13 Dividends
14 Fees Earned
15 Salary Expense
14 Rent Expense
17 Supplies Expense
18 Depreciation Expense
19 Insurance Expense
20 Miscellaneous Expense
21 Totals
7. Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.
Diamond Consulting
ADJUSTED TRIAL BALANCE
July 31, 2018
ACCOUNT TITLE
DEBIT
CREDIT
1 Cash
2 Accounts Receivable
3 Supplies
4 Prepaid Rent
5 Prepaid Insurance
E Office Equipment
7 Accumulated Depreciation
a Accounts Payable
9 Salaries Payable
10 Unearned Fees
11 Common Stock
12 Retained Earnings
13 Dividends
14 Fees Earned
15 Salary Expense
16 Rent Expense
17 Supplies Expense
18 Depreciation Expense
19 Insurance Expense
20 Miscellaneous Expense
21 Totals

Accepted Answer

Question is based on the concept of Final Accounts.
As per Bartleby guidelines we are allowed to…