Question

you have been called in to help Sarah Singer who has operated a part-time graphic design business from her home. Her accountant has decided to quit working for her and Singer has decided she needs a more organized approach to keeping his accounting records. (Singer has kept his accounting records in a big file cabinet). Singer has decided to move to a rented office space and is planning to operate the business on a full-time basis. The business will be known as Sarah's Designs, Inc. Singer also has the following transactions that took place during the month of Sept 20XX: Sept 1. The following assets were received from Sarah Singer in exchange for common stock: ;Cash, $ 25,800;accounts receivable $ 4,500;supplies $2,500 Office Equipment, $ 16,500. There were no liabilities received. Sept 1. Paid three months' rent in advance on a lease rental contract, $3,600. Sept 2. Paid the premiums on property and casualty insurance policies, $ 1,800. ( The policy is for six months) Sept 4. Received cash from the Gaines Company as an advance payment for services to be provided and it will be recorded as unearned fees for $ 4,200. Sept 5. Purchased a new computer on account from Brown's Computer Nook for $ 3,600. The useful life has been determined to be 5 years. Sept 6. Received cash from clients on account for $ 2,600. Sept 9. Paid cash to the Mason Tribune for a newspaper advertisement, $ 240. Sept 12. Recorded services provided on account to various clients for the period of September 1 thru 12, for $ 5,700. Sept 13. Paid Brown's Computer Nook for part of the liability incurred on Sept 5, $ 690. Sept 14. Paid part-time receptionist for two weeks' salary, $ 1,100. Sept 17. Paid cash for supplies, $ 1,000. Sept 20. Purchased additional office equipment on account from Cabrillo Office Supply store for $ 2,650. Sept 20. Recorded services provided on account to various clients for the period of Sept 13-20, $ 4,360. Sept 24. Received cash from clients for fees earned during the period of Sept 17 thru 24, $ 6,100. Sept 26. Received cash from clients on account from Sept 12 services, $ 2,200. Sept 27. Paid part-time receptionist for two weeks salary, $ 1,100. Sept 29. Paid telephone bill for September, $ 370. Sept 29. Paid electricity bill for September, $ 515. Sept 30. Recorded cash from clients for fees earned for the period of Sept 25-30, $ 3,450. Sept 30. Recorded services provided on account for the remainder of Sept, $ 2,100. Sept 30. Paid dividends of $ 2,500. Possible adjustment data for Sarah's Designs, Inc. as of Sept 30, 20XX: Insurance expired during Sept is $300. Supplies on hand on Sept 30 is $ 2,130. Monthly depreciation of office equipment is $ 320. Monthly depreciation of computer is $ 60 Rent expired during Sept is $1,200. Accrued receptionist salary on Sept 30 is $ 200. Unearned fees on Sept 30 is $ 3,600.

Requirements:

Prepare the closing entries

Post the closing entries to the general ledger.

Prepare the post-closing trial balance.

Prepare the written memorandum for your client highlighting software selection and recommendations.

Answer 1

Prepare the closing entries

Profit and Loss A/c Dr 6775

To Rent expense    1200

To Insurance expense 300

To Advertisement expense 240

To Receptionist Salary expense     2400

To Telephone expense 370  

To electricity expense    515

To Depreciation expense 380

To Cost of service revenue 1370

(Being expense accounts trasferred to P/L A/c)

Recording service Revenue    Dr 12160

Fees Revenue Dr   10150

To profit & loss A/c 22310

(Being Revenue accounts trasferred to P/L a/c)

Profit & Loss A/c Dr 15535

To Retained Earnings 15535

(Profit for the year transferred to Retained earnings)

Retained Earnings Dr 2500

To Dividend Expenses 2500

(Dividend expenses transferred to Retained earnings)

Post the closing entries to the general ledger.

Sarah's Designs Inc Profit & Loss A/c
For the Period ended September 30
Date	Particulars	Amount(dr)	Date	Particulars	Amount(cr)
30th sept	To Rent expense	1,200.00	30th sept	By Recording service Revenue	12,160.00
	To Insurance expense	300.00		By Fees Revenue	10,150.00
	To Advertisement expense	240.00
	To Receptionist Salary expense	2,400.00
	To Telephone expenses	370.00
	To Electricity expenses	515.00
	To Depreciation expense	380.00
	To Cost of service revenue	1,370.00
	To Retained earnings	15,535.00
		22,310.00			22,310.00

Sarah's Designs, Inc Retained Earnings
For the Period ended September 30
Date	Particulars	Amount(dr)	Date	Particulars	Amount(cr)
30th sept	To Dividend	2,500.00	30th sept	By Profit & loss A/c	15,535.00
30th sept	To Carried forward	13,035.00
		15,535.00			15,535.00

Prepare the post-closing trial balance.

Sarah's Designs, Inc
Trial Balance
For the Period ended September 30
Particulars	Debit	Credit
Common stock		49,300.00
Cash	31,435.00
Accounts Receivable	11,860.00
Supplies	2,130.00
Office Equipment	18,830.00
Rent Advance	2,400.00
Rent expense	1,200.00
Prepaid Insurance	1,500.00
Insurance expense	300.00
Unearned fees		3,600.00
Computer	3,540.00
Brown Nook		2,910.00
Recording service Revenue		12,160.00
Fees Revenue		10,150.00
Advertisement expense	240.00
Receptionist Salary expense	2,400.00
Cabrillo Office Supply		2,650.00
Telephone expenses	370.00
Electricity expenses	515.00
Dividend	2,500.00
Depreciation expense	380.00
Cost of reveue for service	1,370.00
Accrued receptionist salary		200.00
	80,970.00	80,970.00

Prepare the written memorandum for your client highlighting software selection and recommendations

Its not an accounting question. Hence its not answered.