Question

222 Chapter 4 Completing the Accounting Cycle Comprehensive Problem 1 8. Net income, Kelly Pitney began her consulting business. Kelly Consulting, on April 1, 2016. The account $33,425 ing cycle for Kelly Consulting for April, including financial statements, wis illustrated in this ing cycle f 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 un earned fees, 54,500. HORITE 5. Received cash from clients on account. 52,450. 9. Pald cash for a newspaper advertisement 5225 13. Paid Office Station Co for part of the debt incurred on April 5, 5640. 15. Recorded services provided on account for the period May 1-15, 59,180. 16: Paid part-time receptionist for two weeks'salary including the amount owed on April 30, 5750. 17. Recorded cash from cash clients for fees earned during the period May 1-16, 58,360. 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 cared for the period May 17-23, 57,900. w 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, 5260 31. Paid electricity bill for May, $810 31. Recorded cash from cash clients for fees earned for the period May 26-31, 53,300. 31. Recorded services provided on account for the remainder of May, 52.650. 31. Paid dividends, $10,500. Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit, and the post-closing trial balance as of April 30, 2018, is shown in Exhibit 1% Torch account in the post-closing trial balance, enter the balance in the appropriate Blanc h of a four-column ac- count. Date the balances May 1, 2018, and place a chec k in the Posting Refer- ence column Journalize each of the May transactions in two-column journal starting on Page 5 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. 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. IF) Uneared fees on May 31 are 53.210. 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 the journal Income Summary is account 54 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.

Page 222 in the Financial & Managerial Accounting 14 edition Book

Answer 1

1. & 6. In the books of Kelly Consulting:

Date	Account Titles	Debit	Credit
May		$	$
3	Cash	4,500
	Unearned Fees		4,500
5	Cash	2,450
	Accounts Receivable		2,450
9	Miscellaneous Expense	225
	Cash		225
13	Accounts Payable	640
	Cash		640
15	Accounts Receivable	9,180
	Fees Earned		9,180
16	Salaries Expense	630
	Salaries Payable	120
	Cash		750
17	Cash	8,360
	Fees Earned		8,360
20	Supplies	735
	Accounts Payable		735
21	Accounts Receivable	4,820
	Fees Earned		4,820
25	Cash	7,900
	Fees Earned		7,900
27	Cash	9,520
	Accounts Receivable		9,520
28	Salaries Expense	750
	Cash		750
30	Miscellaneous Expense	260
	Cash		260
31	Miscellaneous Expense	810
	Cash		810
31	Cash	3,300
	Fees Earned		3,300
31.	Accounts Receivable	2,650
	Fees Earned		2,650
31	Dividends	10,500
	Cash		10,500
Adjusting Entries
May 31
A.	Insurance Expense	275
	Prepaid Insurance		275
B.	Supplies Expense	1,370
	Supplies		1,370
C.	Depreciation Expense	330
	Accumulated Depreciation		330
D.	Salaries Expense	325
	Salaries Payable		325
E.	Rent Expense	1,600
	Prepaid Rent		1,600
F.	Unearned Fees	3,790
	Fees Earned		3,790

7.

Kelly Consulting Adjusted Trial Balance May 31, 2018
Account Titles	Debit	Credit
	$	$
Cash	44,195
Accounts Receivable	8,080
Supplies	715
Prepaid Insurance	1,225
Prepaid Rent	1,600
Office Equipment	14,500
Accumulated Depreciation		660
Accounts Payable		895
Salaries Payable		325
Unearned Fees		3,210
Common Stock		30,000
Dividends	10,500
Retained Earnings		12,300
Fees Earned		40,000
Salaries Expense	1,705
Supplies Expense	1,370
Rent Expense	1,600
Insurance Expense	275
Depreciation Expense	330
Miscellaneous Expense	1,295
Totals	$ 87,390	$ 87,390

8.

Kelly Consulting Income Statement For the month ended May 31, 2018
Fees Earned		$ 40,000
Expenses
Salaries Expense	$ 1,705
Supplies Expense	1,370
Rent Expense	1,600
Insurance Expense	275
Depreciation Expense	330
Miscellaneous Expense	1,295
Total Expenses		6,575
Net Income		$ 33,425