Question

For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2019, 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 Consulting entered into the following transactions during April: Apr. 1. The following assets were received from Jeff Horton: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. There were no liabilities received. Paid three months' rent on a lease rental contract, $6,000. 2. Paid the premiums on property and casualty insurance policies, $4,200. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400. 5. Purchased additional office equipment on account from Smith Office Supply Co., $8,000. 6. Received cash from clients on account, $11,700. Paid cash for a newspaper advertisement, $350. 10. 12. Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400. 12. Provided services on account for the period April 1-12, $21,900. 14. Paid receptionist for two weeks' salary, $1,650. Record the following transactions on Page 2 of the journal: 17. Received cash from cash clients for fees earned during the period April 1-16, $6,600. 18. Paid cash for supplies, $725.

Answer 1

Rosebud Consulting Journal Enteries Date Particulars 1.4.2019 Cash a/c Dr. Accounts Receivable a/c Dr. Supplies a/c Dr. Office Equipment a/c Dr. To Jeff Horton, Capital (Capital Invested) Debit in $ Credit in 20000 14700 3300 12000 50000 Dr. 6000 1.4.2019 Prepaid Rent a/c To Cash (3 months rent paid) 6000 Dr. 4200 2.4.2019 Prepaid Insurance a/c To Cash (Premiums paid) 4200 4.9.2019 9400 Cash a/c Dr. To Unearned Fees (Advance from client) 9400 8000 5.4.2019 Office Equipment a/c Dr. To Accounts Payable (Office Equipment on account) 8000 6.4.2019 Dr. 11700 Cash a/c To Accounts Receivable (Cash from debtors) 11700 350 10.4.2019 Miscellaneous Expense a/c Dr. To Cash (Advertisement expense paid) 350 Dr. 6400 12.4.2019 Accounts Payable a/c To Cash (Creditors paid) 6400 Dr. 21900 12.4.2019 Accounts Receivable a/c To Cash (Creditors paid) 21900 Dr. 1650 14.4.2019 Salary Expense a/c To Cash (Salary paid) 1650

Dr. Date Particulars 17.4.2019 Cash a/c To Fees Earned (Fees earned) Debit in $ Credit in 6600 6600 Dr. 725 18.4.2019 Supplies a/c To Cash (Supplies purchased) 725 Dr. 16800 20.4.2019 Accounts Receivable a/c To Fees Earned (Fees earned) 16800 Dr. 4450 24.4.2019 Cash a/c To Fees Earned (Fees earned) 4450 26500 26.4.2019 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 26500 Dr. 1650 27.4.2019 Salary Expense a/c To Cash (Salary paid) 1650 540 29.4.2019 Miscellaneous Expense a/c Dr. To Cash (Telephone expense paid) 540 760 30.4.2019 Miscellaneous Expense a/c Dr. To Cash (Electricity expense paid) 760 Dr. 5160 30.4.2019 Cash a/c To Fees Earned (Fees earned) 5160 Dr. 2590 30.4.2019 Accounts Receivable a/c To Fees Earned (Fees earned) 2590 Dr. 18000 30.4.2019 Jeff Horton, Drawing a/c To Cash (Drawings recorded) 18000

Adjusting Enteries Date Particulars 30.4.2019 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) Dr. Debit in $ Credit in 350 350 2800 30.4.2019 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 3300 + 725 - 1225 2800 400 30.4.2019 Depreciation Expense a/c Dr. To Accum Depre - Office Equip. (To record depreciation) 400 275 30.4.2019 Salary Expense a/c Dr. To Salary Payable (Salary expense accrued) 275 Dr. 2000 30.4.2019 Rent Expense a/c To Prepaid Rent (Rent expensed) 6000/3 2000 Dr. 7050 30.4.2019 Unearned Fees a/c To Fees Earned (Fees earned) 9400 - 2350 7050

Closing Enteries Date Particulars 30.4.2019 Income Summary a/c To Salary Expense To Miscellaneous Expense To Insurance Expense To Supplies Expense To Depreciation Expense To Rent Expense (Expense accounts closed) Debit in $ Credit in $ Dr. Dr. 11500 3575 1650 350 3525 400 2000 Dr. 42650 30.4.2019 Fees Earned a/c To Income Summary (Revenue accounts closed) 42650 Dr. 31150 30.4.2019 Income Summary a/c To Jeff Horton, Capital (Profits transferred) 31150 Dr. 18000 30.4.2019 Jeff Horton, Capital a/c To Jeff Horton, Drawing (To record drawings) 18000

Worksheet For the Month ending 30.4.2019 Particulars Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accum Depre - Office Equip. Accounts Payable Salary Payable Unearned Fees Jeff Horton, Capital Jeff Horton, Drawing Fees Earned Salary Expense Miscellaneous Expense Insurance Expense Supplies Expense Depreciation Expense Rent Expense Totals Unadjusted Adjustments Adjusted Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 21635 21635 21635 17790 17790 17790 3300 2800 500 500 6000 2000 4000 4000 4200 350 3850 3850 20000 20000 20000 400 400 400 1600 1600 1600 275 275 275 9400 7050 2350 2350 50000 50000 63150 18000 18000 35600 7050 42650 3300 275 3575 1650 1650 350 350 725 2800 3525 400 400 2000 2000 96600 9660012875 12875972759727567775 67775 42650 Statement of Income For the Month ending 30.4.2019 Fees Earned Less: Salary Expense Miscellaneous Expense Insurance Expense Supplies Expense Depreciation Expense Rent Expense Net Income 3575 1650 350 3525 400 2000 11500 31150 Statement of Owner's Equity For the Month ending 30.4.2019 Jeff Horton, Capital Net Income 50000 31150 81150 - 18000 63150 Jeff Horton, Drawing

Amounts in $ Amounts in $ Balance Sheet As at 30.4.2019 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilities 21635 Accounts Payable Salary Payable 500 Unearned Fees 4000 3850 47775 17790 1600 275 2350 4225 Non Current Assets Office Equipment Accum Depre - Office Total Assets 20000 -400 Owner's Equity 19600 Jeff Horton, Capital 67375 Total Liabilities & Equity 63150 67375