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Comprehensive Problem 1 ✓ 8 Net income. $31,425 Kelly Pitney began her consulting business. Kelly Consulting, on April 1, 20Y8. 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 tree $4,500 5. Received cash from clients on account $2,450. 9. Paid cash for a newspaper advertisement $225. 13. Raid Office Station Co for part of the debt incurred on April $, $640. 15. Recorded services provided on account for the period May 1-15, $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 support 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. $7S0. 30. Raid telephone bill for May. $260 31. Paid electricity bill for May, $810. 31. Recorded cash from cash clients tor lees earned for the period May 20–31. $3,300. 31. Recorded services provided on account for the remainder of May, $2,650. 31. Paid dividends $10,500 Instructions 1 . The chart of accounts foe Kelly Consulting is shown us Exhibit 9. and the post-closing trial balance as of April 30, 20Y8, 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. 20Y8. and place a check mark (✓) in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting cm Page $ of the journal and using Kelly Consulting’s 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. 5. 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 II 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 $1600. (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 stockholders equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 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.

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Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFindarrow_forward

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
Chapter 4, Problem 1COP
Textbook Problem
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Comprehensive Problem 1

8 Net income. $31,425

Kelly Pitney began her consulting business. Kelly Consulting, on April 1, 20Y8. 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 tree $4,500

  1. 5.    Received cash from clients on account $2,450.
  2. 9.    Paid cash for a newspaper advertisement $225.
  3. 13.    Raid Office Station Co for part of the debt incurred on April $, $640.
  4. 15.    Recorded services provided on account for the period May 1-15, $9,180.
  5. 16     Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.
  6. 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
  7. 20.    Purchased support on account $735.
  8. 21.    Recorded services provided on account for the period May 16–20. $4,820
  9. 25.    Recorded cash from cash clients for fees earned for the period May 17–23, $7,900
  10. 27.    Received cash from clients on account $9,520.
  11. 28.    Paid part-time receptionist for two weeks’ salary. $7S0.
  12. 30.    Raid telephone bill for May. $260
  13. 31.    Paid electricity bill for May, $810.
  14. 31.    Recorded cash from cash clients tor lees earned for the period May 20–31. $3,300.
  15. 31.    Recorded services provided on account for the remainder of May, $2,650.
  16. 31.    Paid dividends $10,500

Instructions

  1.   1.    The chart of accounts foe Kelly Consulting is shown us Exhibit 9. and the post-closing trial balance as of April 30, 20Y8, 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. 20Y8. and place a check mark (✓) in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting cm Page $ of the journal and using Kelly Consulting’s chart of accounts. (Do not insert the account numbers in the journal at this time.)
  2. 2.    Post the journal to a ledger of four-column accounts.
  3. 5.    Prepare an unadjusted trial balance.
  4. 4.    At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).
    1.   (a)    Insurance expired during May is $275.
    2.   (b)    Supplies on hand on May II are $715.
    3.   (c)    Depreciation of office equipment for May is $330.
    4.   (d)    Accrued receptionist salary on May 31 is $325.
    5.   (e)    Rent expired during May is $1600.
    6.   (f)    Unearned fees on May 31 are $3,210
  5. 5.    (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet
  6. 6.    Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal.
  7. 7.    Prepare an adjusted trial balance.
  8. 8.    Prepare an income statement, a statement of stockholders equity, and a balance sheet.
  9. 9.    Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.
  10. 10.    Prepare a post-closing trial balance.

1.

To determine

Journal:

Journal is the book of original entry. Journal consists of the day-to-day financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.

To journalize: The transactions of May in a two column journal beginning on page 5.

Explanation of Solution

Journalize the transactions of May in a two column journal beginning on page 5.

Journal Page 5
Date Description Post. Ref Debit ($) Credit ($)
20Y8 3 Cash 11 4,500  
May       Unearned fees 23   4,500
    (To record the cash received for the service yet to be provide)      
 
  5 Cash 11 2,450  
    Accounts receivable 12   2,450
    (To record the cash received from clients)      
 
  9 Miscellaneousexpense 59 225  
        Cash 11   225
    (To record the payment made for Miscellaneous expense)      
 
  13 Accounts payable  21 640  
          Cash 11   640
    (To record the payment made to creditors on account)      
 
  15 Accounts receivable 12 9,180  
         Fees earned 41   9,180
    (To record the revenue earned and billed)      
 
  14 Salary Expense 51 630  
    Salaries payable 22 120  
        Cash 11   750
    (To record the payment made for salary)      
           
    Cash 11 8,360  
  17     Fees earned 41   8,360
    (To record the receipt of cash)      

Table (1)

                                                   Journal                                           Page 6
Date Description Post...

(2), (6) and (9)

To determine

To record: The balance of each accounts in the appropriate balance column of a four-column account and post them to the ledger.

(3)

To determine

To prepare: The unadjusted trial balance of Consulting Kat May, 31.

(5)

To determine

To enter: The unadjusted trial balance on an end-of-period spreadsheet.

(6)

To determine

To Journalize: The adjusting entries of Consulting K for May 31.

(7)

To determine

To prepare: An adjusted trial balance of Consulting K for May 31, 20Y8.

(8)

To determine

To Prepare: An income statement for the year ended May 31, 20Y8.

To determine

To Prepare: The statement of stockholders’ equity for the year ended May 31, 20Y8.

To determine

To Prepare: The balance sheet of K Consulting at May 31, 20Y8.

(9)

To determine

To Journalize: The closing entries for KConsulting.

(10)

To determine

To Journalize: The closing entries for KConsulting.

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Chapter 4 Solutions

Corporate Financial Accounting
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