Question

Chapter 4 The Accounting Cycle 219 PR 4-5A Complete accounting cycle Obj. 4,5 For the past several years, Steffy Lope has operated a part-time consulting business from his home. As of July 1, 20Y2 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 entered into the following transactions during July July 1. The following assets were received from Steffy Loper in exchange for common stock: cash, $13.500; accounts receivable, 520,000, supplies $1.200 and office equipment, 57.500. There were no liabilities received 1. Paid two months rent on a lease rental contract, 54,800 2. Paid the premiums on property and casualty Insurance policies, 54,500. 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 the Station Co. $6,500 & Received cash from its on account. 515.300 10. Pad cash for a newspaper advertisement. 5400 12. Padomice Station Ca for part of the debt incurred on My 5.55.200 12. Recorded services provided on account for the period y 1-12, 513.300 14. Paid receptionist for two weeks'salary, 51,750. Record the following transactions on Page 2 of the journal 17. Recorded cash from cash clients for fees eamed during the period July 1-17, 59,450 Paid cash for supplies 5600 20. Recorded services provided on account for the period y 13-20. 56.650. 24. Recorded cash from cashes for fees earned for the period My 17-24 $4.000 26 Received cash from cients on account. 512.000 27. Paid receptionist for two weeks'salary: $1.750 29. Paid telephone bill for July $325. 31. Paid electricity bilfory, 5675 31. Recorded cash from cash clients for fees eamed for the period July 25-31, 55,200, 31. Recorded services provided on arount for the remainder of July $3.000 31 Paid dividendii, 512.500 Instructions 1. Journalire each transaction on jumal starting on Page 1, referring to the following chart of co n clect the counts to be debited and credited. (Do not insert the account numbers in the real at this time.) 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees 31 Common Stock 32 Retained Earnings 33 Dividends 41 Fees Earned 51 Salary Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 iurance Expense 59 Miscellaneous Expense 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance. (Continued

Answer 1

1.

Prepare journal entries as follows:

Date	Account Titles	Debit	Credit
July
1	Cash	$135,000
	Accounts receivable	$20,800
	Supplies	$3,200
	Office equipment	$7,500
	Common stock		$166,500
1	Prepaid Rent	$4,800
	Cash		$4,800
2	Prepaid Insurance	$4,500
	Cash		$4,500
4	Cash	$5,500
	Unearned fees		$5,500
5	Office equipment	$6,500
	Accounts payable		$6,500
6	Cash	$15,300
	Accounts receivable		$15,300
10	Advertisement expense	$400
	Cash		$400
12	Accounts payable	$5,200
	Cash		$5,200
12	Accounts receivable	$13,300
	Fees earned		$13,300
14	Salary expense	$1,750
	Cash		$1,750
17	Cash	$9,450
	Fees earned		$9,450
18	Supplies	$600
	Cash		$600
20	Accounts receivable	$6,650
	Fees earned		$6,650
24	Cash	$4,000
	Fees earned		$4,000
26	Cash	$12,000
	Accounts receivable		$12,000
27	Salary expense	$1,750
	Cash		$1,750
29	Misc. expense	$325
	Cash		$325
31	Misc. expense	$675
	Cash		$675
31	Cash	$5,200
	Fees earned		$5,200
31	Dividend	$12,500
	Cash		$12,500