Concept explainers
On November 1, 2016, Patty Cosgrove established an interior decorating business, Classic Designs. During the month, Patty completed the following transactions related to the business:
Nov. 1. | Patty transferred cash from a personal bank account to an account to be used for the business, $27,750. |
1. | Paid rent for period of November 1 to end of month, $4,000. |
6. | Purchased office equipment on account, $12,880. |
8. | Purchased a truck for $32,500 paying $6,500 cash and giving a note payable for the remainder. |
10. | Purchased supplies for cash, $1,860. |
12. | Received cash for job completed, $7,500. |
Nov. 15. | Paid annual premiums on property and casualty insurance, $2,400. |
23. | Recorded jobs completed on account and sent invoices to customers, $12,440. |
24. | Received a n invoice for truck expenses, to be paid in November, $1,100. |
Enter the following transactions on Page 2 of the two-column journal: | |
29. | Paid utilities expense, $3,660. |
29. | Paid miscellaneous expenses, $1,700. |
30. | Received cash from customers on account, $8,000. |
30. | Paid wages of employees, $4,750. |
30. | Paid creditor a portion of the amount owed for equipment purchased on November 6, $6,220. |
30. | Withdrew cash for personal use, $2,000. |
Instructions
- 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.
11 Cash
12
Accounts Receivable 13 Supplies
14 Prepaid Insurance
16 Equipment
18 Truck
21 Notes Payable
22 Accounts Payable
31 Patty Cosgrove, Capital
32 Patty Cosgrove, Drawing
41 Fees Earned
51 Wages Expense
53 Rent Expense
54 Utilities Expense
55 Truck Expense
59 Miscellaneous Expense
- 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.
- 3. Prepare an unadjusted trial balance for Classic Designs as of November 30, 2016.
- 4. Determine the excess of revenues over expenses for November.
- 5. Can you think of any reason why the amount determined in (4) might not be the net income for November?
1.
Journal:
Journal is the book of original entry. Journal consists of the day today financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.
Rules of debit and credit:
“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.
Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.
T-account:
An account is referred to as a T-account, because the alignment of the components of the account resembles the capital letter ‘T’. An account consists of the three main components which are as follows:
- The title of the account
- The left or debit side
- The right or credit side
Unadjusted trial balance:
The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting journal entries.
To journalize: The transactions in a two column journal beginning on Page 1.
Explanation of Solution
Journalize each transaction in a two column journal beginning on Page 1.
Journal Page 1 | |||||
Date | Description | Post. Ref | Debit ($) | Credit ($) | |
2016 | Cash | 11 | 27,750 | ||
November | 1 | Person PC, Capital | 31 | 27,750 | |
(To record the transfer of cash from personal bank account to business account) | |||||
1 | Rent expense | 53 | 4,000 | ||
Cash | 11 | 4,000 | |||
(To record the payment of rent for the month of November) | |||||
6 | Equipment | 16 | 12,880 | ||
Accounts payable | 22 | 12,880 | |||
(To record the purchase of equipment on account) | |||||
8 | Van | 18 | 32,500 | ||
Cash | 11 | 6,500 | |||
Notes payable | 21 | 26,000 | |||
(To record the purchase of van by cash and on account) | |||||
10 | Supplies | 13 | 1,860 | ||
Cash | 11 | 1,860 | |||
(To record the purchase of supplies) | |||||
12 | Cash | 11 | 7,500 | ||
Fees earned | 41 | 7,500 | |||
(To record the receipt of cash for the completed job) | |||||
15 | Prepaid insurance | 14 | 2,400 | ||
Cash | 11 | 2,400 | |||
(To record the payment made for insurance premiums) | |||||
23 | Accounts receivable | 12 | 12,440 | ||
Fees earned | 41 | 12,440 | |||
(To record the invoices sent to customers for the jobs completed) | |||||
24 | Truck expense | 55 | 1,100 | ||
Accounts payable | 22 | 1,100 | |||
(To record the receipt of invoices for van expenses) |
|
Table (1)
Journal Page 2 | |||||
Date | Description | Post. Ref | Debit ($) | Credit ($) | |
2016 | 29 | Utilities expense | 54 | 3,660 | |
November | Cash | 11 | 3,660 | ||
(To record the payment of utilities expense) | |||||
29 | Miscellaneous expense | 59 | 1,700 | ||
Cash | 11 | 1,700 | |||
(To record the payment of miscellaneous expense) | |||||
30 | Cash | 11 | 8,000 | ||
Accounts receivable | 12 | 8,000 | |||
(To record the receipt of cash from customers on account) | |||||
30 | Wages expense | 51 | 4,750 | ||
Cash | 11 | 4,750 | |||
(To record the payment of wages expense) |
| ||||
30 | Accounts payable | 22 | 6,220 | ||
Cash | 11 | 6,220 | |||
(To record the payment made to creditor on account) | |||||
30 | Person PC, Drawing | 32 | 2,000 | ||
Cash | 11 | 2,000 | |||
(To record the withdrawal of cash for personal use) |
Table (2)
2.
To post: The journal to a ledger of four-column accounts with appropriate post references, and the balances after each transaction is posted.
Explanation of Solution
General Ledger
Account: Cash Account no. 11 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 1 | 1 | 27,750 | 27,750 | |||
1 | 1 | 4,000 | 23,750 | ||||
8 | 1 | 6,500 | 17,250 | ||||
10 | 1 | 1,860 | 15,390 | ||||
12 | 1 | 7,500 | 22,890 | ||||
15 | 1 | 2,400 | 20,490 | ||||
29 | 2 | 3,660 | 16,830 | ||||
29 | 2 | 1,700 | 15,130 | ||||
30 | 2 | 8,000 | 23,130 | ||||
30 | 2 | 4,750 | 18,380 | ||||
30 | 2 | 6,220 | 12,160 | ||||
30 | 2 | 2,000 | 10,160 |
Table (3)
Account: Accounts Receivable Account no. 12 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 23 | 1 | 12,440 | 12,440 | |||
30 | 2 | 8,000 | 4,440 |
Table (4)
Account: Supplies Account no. 13 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 10 | 1 | 1,860 | 1,860 |
Table (5)
Account: Prepaid Insurance Account no. 14 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 15 | 1 | 2,400 | 2,400 |
Table (6)
Account: Equipment Account no. 16 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 6 | 1 | 12,880 | 12,880 |
Table (7)
Account: Truck Account no. 18 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 8 | 1 | 32,500 | 32,500 |
Table (8)
Account: Notes Payable Account no. 21 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 8 | 1 | 26,000 | 26,000 |
Table (9)
Account: Accounts Payable Account no. 22 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 6 | 1 | 12,880 | 12,880 | |||
24 | 1 | 1,100 | 13,980 | ||||
30 | 2 | 6,220 | 7,760 |
Table (10)
Account: Person PC, Capital Account no. 31 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 1 | 1 | 27,750 | 27,750 |
Table (11)
Account: Person PC, Drawing Account no. 32 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 30 | 2 | 2,000 | 2,000 |
Table (12)
Account: Fees earned Account no. 41 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 12 | 1 | 7,500 | 7,500 | |||
23 | 2 | 12,440 | 19,940 |
Table (13)
Account: Wages expense Account no. 51 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 30 | 2 | 4,750 | 4,750 |
Table (14)
Account: Rent expense Account no. 53 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 1 | 1 | 4,000 | 4,000 |
Table (15)
Account: Utilities expense Account no. 54 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 29 | 2 | 3,660 | 3,660 |
Table (16)
Account: Truck expense Account no. 55 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 24 | 1 | 1,100 | 1,100 |
Table (17)
Account: Miscellaneous expense Account no. 59 | |||||||
Date | Item | Post. Ref |
Debit ($) | Credit ($) | Balance | ||
Debit ($) | Credit ($) | ||||||
2016 | |||||||
November | 29 | 2 | 1,700 | 1,700 |
Table (18)
3.
To prepare: An unadjusted trial balance of C Designs as of November 30, 2016.
Explanation of Solution
Prepare an unadjusted trial balance of C Designs as of November 30, 2016 as follows:
C Designs Unadjusted Trial Balance November 30, 2016 | |||
Particulars | Account No. |
Debit $ | Credit $ |
Cash | 11 | 10,160 | |
Accounts receivable | 12 | 4,440 | |
Supplies | 13 | 1,860 | |
Prepaid insurance | 14 | 2,400 | |
Equipment | 15 | 12,880 | |
Truck | 18 | 32,500 | |
Notes payable | 21 | 26,000 | |
Accounts payable | 22 | 7,760 | |
Person PC, Capital | 31 | 27,750 | |
Person PC, Drawings | 32 | 2,000 | |
Fees earned | 41 | 19,940 | |
Wages expense | 51 | 4,750 | |
Rent expense | 53 | 4,000 | |
Utilities expense | 54 | 3,660 | |
Truck expense | 55 | 1,100 | |
Miscellaneous expense | 59 | 1,700 | |
Total | 81,450 | 81,450 |
Table (19)
The debit column and credit column of the unadjusted trial balance are agreed, both having balance of $81,450.
4.
The excess of revenues over expenses for the month of November.
Explanation of Solution
The excess of revenues over expenses for the month of November is $4,730.
Working Note:
Calculate the excess of revenues over expenses.
Hence, the excess of revenues over expenses for the month of November is $4,730.
5.
To discuss: The reason behind the amount determined in (4) might not be the net income for November.
Explanation of Solution
The amount determined in (4) might not be the net income for November, because adjusting entries for supplies used, insurance expired, and depreciation should be passed at the end of the accounting period in order to bring the accounts up to date.
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Chapter 2 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + CengageNOWv2, 2 term Printed Access Card
- Journal entries and trial balance On August 1, 20Y7, Rafael Masey established Planet Realty, which completed the following transactions during the month: a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 17,500. b. Purchased supplies on account, 2,300. c. Earned sales commissions, receiving cash, 13,300. d. Paid rent on office and equipment for the month, 3,000. e. Paid creditor on account, 1,150. f. Paid dividends, 1,800. g. Paid automobile expenses (including rental charge) for month, 1,500, and miscellaneous expenses, 400. h. Paid office salaries, 2,800. i. Determined that the cost of supplies used was 1,050. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of August 31, 20Y7. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for August. 5. Determine the increase or decrease in retained earnings for August.arrow_forwardJournal entries and trial balance On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month: a. Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, 40,000. b. Paid rent on office and equipment for the month, 4,800. c. Purchased supplies on account, 2,150. d. Paid creditor on account, 1,100. e. Earned sales commissions, receiving cash, 18,750. f. Paid automobile expenses (including rental charge) for month, 1,580, and miscellaneous expenses, 800. g. Paid office salaries, 3,500. h. Determined that the cost of supplies used was 1,300. i. Paid dividends, 1,500. Instructions 1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Common Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Explanations may be omitted. 2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances after all posting is complete. Accounts containing only a single entry do not need a balance. 3. Prepare an unadjusted trial balance as of October 31, 20Y6. 4. Determine the following: a. Amount of total revenue recorded in the ledger. b. Amount of total expenses recorded in the ledger. c. Amount of net income for October. 5. Determine the increase or decrease in retained earnings for October.arrow_forwardOn October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, 18,000. 4.Paid rent for period of October 4 to end of month, 3,000. 10.Purchased a used truck for 23,750, paying 3,750 cash and giving a note payable for the remainder. 13.Purchased equipment on account, 10,500. 14.Purchased supplies for cash, 2,100. 15.Paid annual premiums on property and casualty insurance, 3,600. 15.Received cash for job completed, 8,950. Enter the following transactions on Page 2 of the two-column journal: 21.Paid creditor a portion of the amount owed for equipment purchased on October 13, 2,000. 24.Recorded jobs completed on account and sent invoices to customers, 14,150. 26.Received an invoice for truck expenses, to be paid in November, 700. 27.Paid utilities expense, 2,240. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal use, 3,500. Instructions 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2019. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?arrow_forward
- In October, A. Nguyen established an apartment rental service. The account headings are presented below. Transactions completed during the month of October follow. a. Nguyen deposited 25,000 in a bank account in the name of the business. b. Paid the rent for the month, 1,200, Ck. No. 2015. c. Bought supplies on account, 225. d. Bought a truck for 18,000, paying 1,000 in cash and placing the remainder on account e. Bought Insurance for the truck for the yean 1,400, Ck. No. 2016. f. Sold services on account 5,000. g. Bought office equipment on account from Henry Office Supply, 2,300. h. Sold services for cash for the first half of the month, 6,050. i. Received and paid the bill for utilities, 150, Ck. No. 2017. j. Received a bill for gas and oil for the truck. 80. k. Paid wages to the employees, 1,400, Ck Nos. 20182020. l. Sold services for cash for the remainder of the month, 4,200. m. Nguyen withdrew cash for personal use, 2,000, Ck. No. 2021. Required 1. Record the transactions and the balance after each transaction. 2. Total the left side of the accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, reanalyze each transaction.arrow_forwardEntries into T accounts and trial balance Marjorie Knaus, an architect, organized Knaus Architects on January 1, 20Y4. During the month, Knaus Architects completed the following transactions: a. Issued common stock to Marjorie Knaus in exchange for 30,000. b. Paid January rent for office and workroom, 2,500. c. Purchased used automobile for 28,500, paying 6,000 cash and giving a note payable for the remainder. d. Purchased office and computer equipment on account, 8,000. e. Paid cash for supplies, 2,100. f. Paid cash for annual insurance policies, 3,600. g. Received cash from client for plans delivered, 9,000. h. Paid cash for miscellaneous expenses, 2,600. i. Paid cash to creditors on account, 4,000. j. Paid installment due on note payable, 1,875. k. Received invoice for blueprint service, due in February, 5,500. l. Recorded fees earned on plans delivered, payment to be received in February, 31,400. m. Paid salary of assistants, 6,000. n. Paid gas, oil, and repairs on automobile for January, 1,300. Instructions 1. Record these transactions directly in the following T accounts, without journalizing: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Automobiles, Equipment, Notes Payable, Accounts Payable, Common Stock, Professional Fees, Salary Expense, Blueprint Expense, Rent Expense, Automobile Expense, Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction. 2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance. 3. Prepare an unadjusted trial balance for Knaus Architects as of January 31, 20Y4. 4. Determine the net income or net loss for January.arrow_forwardIn October, A. Nguyen established an apartment rental service. The account headings are presented below. Transactions completed during the month of October follow. a. Nguyen deposited 25,000 in a bank account in the name of the business. b. Paid the rent for the month, 1,200, Ck. No. 2015 (Rent Expense). c. Bought supplies on account, 225. d. Bought a truck for 18,000, paying 1,000 in cash and placing the remainder on account. e. Bought insurance for the truck for the year, 1,400, Ck. No. 2016. f. Sold services on account, 5,000 (Service Income). g. Bought office equipment on account from Henry Office Supply, 2,300. h. Sold services for cash for the first half of the month, 6,050 (Service Income). i. Received and paid the bill for utilities, 150, Ck. No. 2017 (Utilities Expense). j. Received a bill for gas and oil for the truck, 80 (Gas and Oil Expense). k. Paid wages to the employees, 1,400, Ck. Nos. 20182020 (Wages Expense). l. Sold services for cash for the remainder of the month, 4,200 (Service Income). m. Nguyen withdrew cash for personal use, 2,000, Ck. No. 2021. Required 1. In the equation, write the owners name above the terms Capital and Drawing. 2. Record the transactions and the balance after each transaction. Identify the account affected when the transaction involves revenues or expenses. 3. Write the account totals from the left side of the equals sign and add them. Write the account totals from the right side of the equals sign and add them. If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.arrow_forward
- Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, 4,500. 5. Received cash from clients on account, 2,450. 9. Paid cash for a newspaper advertisement, 225. 13. Paid Office Station Co. for part of the debt incurred on April 5, 640. 15. Recorded services provided on account for the period May 115, 9,180. 16. Paid part-time receptionist for two weeks salary including the amount owed on April 30, 750. 17. Recorded cash from cash clients for fees earned during the period May 1-16, 8,360. Record the following transactions on Page 6 of the journal: 20. Purchased supplies on account, 735. 21. Recorded services provided on account for the period May 16-20,4,820. 25. Recorded cash from cash clients for fees earned for the period May 17- 23, 7,900. 27. Received cash from clients on account, 9,520. 28. Paid part-time receptionist for two weeks salary, 750. 30. Paid telephone bill for May, 260. 31. Paid electricity bill for May, 810. 31. Recorded cash from cash clients for fees earned for the period May 26-31, 3,300. 31. Recorded services provided on account for the remainder of May, 2,650. 31. Paid dividends, 10,500. Instructions 1. The cl1art of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2018, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2018, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). (A) Insurance expired during May is 275. (B) Supplies on hand on May 31 are 715. (C) Depreciation of office equipment for May is 330. (D) Accrued receptionist salary on May 31 is 325. (E) Rent expired during May is 1,600. (F) Unearned fees on May 31 are 3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a retained earnings statement, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of d1e journal. (Income Summary is account #34 in d1e chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forwardKelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions: Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2016, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2016, and place a check mark () in the Posting Reference column. Journalize each of the May transactions in a two column journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (Do not insert the account numbers in the journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6) a. Insurance expired during May is 275. b. Supplies on hand on May 31 are 715. c. Depreciation of office equipment for May is 330. d. Accrued receptionist salary on May 31 is 325. e. Rent expired during May is 1,600. f. Unearned fees on May 31 are 3,210. 5.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6.Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal. 7.Prepare an adjusted trial balance. 8.Prepare an income statement, a statement of owners equity, and a balance sheet. 9.Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10.Prepare a post-closing trial balance.arrow_forwardComplete accounting cycle For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 20Y6, 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 entered into the following transactions during April: Record the following transactions on Page 2 of the journal: Instructions 1. Journalize each transaction in a two-column journal starting on Page 1, referring to the following 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. 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 parts (5) and (6). (a) Insurance expired during April is 350. (b) Supplies on hand on April 30 are 1,225. (c) Depreciation of office equipment for April is 400. (d) Accrued receptionist salary on April 30 is 275. (e) Rent expired during April is 2,000. (f) Unearned fees on April 30 are 2,350. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 3 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of stockholders equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 4 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance.arrow_forward
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