Question

For the past several years, Jolene Upton has operated a part-time consulting business from her home. As of July 1, 2019, Jolene decided to move to rented quarters and to operate the business, which was to be known as Gourmet Consulting, on a full-time basis. Gourmet Consulting entered into the following transactions during July:

Jul.	1	The following assets were received from Jolene Upton: cash, $19,000; accounts receivable, $22,300; supplies, $3,800; and office equipment, $8,900. There were no liabilities received.
	1	Paid three months’ rent on a lease rental contract, $6,000.
	2	Paid the premiums on property and casualty insurance policies, $4,500.
	4	Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $8,000.
	5	Purchased additional office equipment on account from Office Necessities Co., $5,100.
	6	Received cash from clients on account, $12,750.
	10	Paid cash for a newspaper advertisement, $500.
	12	Paid Office Necessities Co. for part of the debt incurred on July 5, $3,000.
	12	Provided services on account for the period July 1–12, $14,200.
	14	Paid receptionist for two weeks’ salary, $1,500.

Record the following transactions on Page 2 of the journal:

Jul.	17	Received cash from cash clients for fees earned during the period July 1–17, $10,400.
	18	Paid cash for supplies, $1,000.
	20	Provided services on account for the period July 13–20, $9,000.
	24	Received cash from cash clients for fees earned for the period July 17–24, $8,500.
	26	Received cash from clients on account, $12,000.
	27	Paid receptionist for two weeks’ salary, $1,500.
	29	Paid telephone bill for July, $325.
	31	Paid electricity bill for July, $675.
	31	Received cash from cash clients for fees earned for the period July 25–31, $7,100.
	31	Provided services on account for the remainder of July, $5,500.
	31	Jolene withdrew $20,000 for personal use.

	Required:
1.	Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)
2.	Post the July transactions. A. Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the July transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. B. Add the appropriate posting reference to the journal in CengageNOW.
3.	Prepare an unadjusted trial balance.
4.	At the end of July, the following adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6). • Insurance expired during July is $375. • Supplies on hand on July 31 are $2,850. • Depreciation of office equipment for July is $400. • Accrued receptionist salary on July 31 is $140. • Rent expired during July is $2,000. • Unearned fees on July 31 are $3,000.
5.	(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the spreadsheet. Find a blank end-of-period work sheet in the Excel spreadsheet you previously downloaded.
6.	A. Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. B. Use the attached spreadsheet in the Ledger panel to post the adjusting entries to the ledger of four-column accounts, inserting balances is the accounts affected. Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW.
7.	Prepare an adjusted trial balance.

CHART OF ACCOUNTS Gourmet Consulting General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
14	Supplies
15	Prepaid Rent
16	Prepaid Insurance
18	Office Equipment
19	Accumulated Depreciation-Office Equipment

	LIABILITIES
21	Accounts Payable
22	Salaries Payable
23	Unearned Fees

	EQUITY
31	Jolene Upton, Capital
32	Jolene Upton, Drawing

	REVENUE
41	Fees Earned

	EXPENSES
51	Salary Expense
52	Rent Expense
53	Supplies Expense
54	Depreciation Expense
55	Insurance Expense
59	Miscellaneous Expense

Answer 1

Gourmet Consulting Journal Enteries Date Particulars 1.7.2019 Cash a/c Dr. Accounts Receivable a/c Dr. Supplies a/c Dr. Office Equipment a/c Dr. To Jolene Upton, Capital (Capital invested) Debit in $ Credit in $ 19000 22300 3800 8900 54000 Dr. 6000 1.7.2019 Prepaid Rent a/c To Cash 6000 (3 months rent in advance) 2.7.2019 4500 Prepaid Insurance a/c Dr. To Cash (Insurance paid in advance) 4500 4.7.2019 Dr. 8000 Cash a/c To Unearned Fees (Advance from client) 8000 5.7.2019 Office Equipment a/c Dr. To Accounts Payable (Office Equipment on account) 5100 6.7.2019 12750 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 12750 500 10.7.2019 Miscellaneous Expense a/c Dr. To Cash (Newspaper advertisement) 500 Dr. 3000 12.7.2019 Accounts Payable a/c To Cash (Cash paid to creditors) 3000 14200 12.7.2019 Accounts Receivable a/c Dr. To Service Revenue (Services provided on account) 14200 Dr. 1500 14.7.2019 Salary Expense a/c To Cash (Salary paid) 1500

Date Particulars 17.7.2019 Cash a/c Dr. To Service Revenue (Services provided for cash) Debit in $ Credit in $ 10400 10400 1000 18.7.2019 Supplies a/c Dr. To Cash (Supplies purchased for cash) 1000 9000 20.7.2019 Accounts Receivable a/c Dr. To Service Revenue (Services provided on account) 9000 8500 24.7.2019 Cash a/c Dr. To Service Revenue (Services provided for cash) 8500 12000 26.7.2019 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 12000 Dr. 1500 27.7.2019 Salary Expense a/c To Cash (Salary paid) 1500 325 29.7.2019 Miscellaneous Expense a/c Dr. To Cash (Telephone expense paid) 325 675 31.7.2019 Miscellaneous Expense a/c Dr. To Cash (Electricity expense paid) 675 7100 31.7.2019 Cash a/c Dr. To Service Revenue (Services provided for cash) 7100 5500 31.7.2019 Accounts Receivable a/c Dr. To Service Revenue (Services provided on account) 5500 20000 31.7.2019 Jolene Upton, Drawing a/c Dr. To Cash (Personal drawings) 20000

Adjusting Enteries Date Particulars 31.7.2019 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) Debit in $ Credit in $ 375 375 1950 31.7.2019 Supplies Expense a/c Dr. To Supplies (Supplies Expensed) 3800 + 1000 - 2850 1950 400 31.7.2019 Depreciation expense a/c Dr. To Accum. Depre - Off.Equip. (To record depreciation) 400 Dr. 140 31.7.2019 Salary Expense a/c To Salaries Payable (Salary accrued) 140 2000 31.7.2019 Rent Expense a/c Dr. To Prepaid Rent (Rent expensed) 2000 5000 31.7.2019 Unearned fees a/c Dr. To Service Revenue (Revenue recognized) 8000 - 3000 5000

Worksheet For the Month ending 31.7.2019 Particulars Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accum. Depre - Off.Equip. Accounts Payable Salaries Payable Unearned Fees Jolene Upton, Capital Jolene Upton, Drawing Service Revenue Miscellaneous Expense Salary Expense Insurance Expense Supplies Expense Depreciation expense Rent Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 38750 38750 26250 26250 4800 1950 2850 6000 2000 4000 4500 375 4125 14000 14000 400 400 2100 2100 140 140 8000 5000 3000 54000 54000 20000 20000 54700 5000 59700 1500 1500 3000 140 3140 375 375 1950 1950 400 400 2000 2000 118800 118800 9865 9865 119340 119340

Accum. Depre - Off.Equip. Depreciation expense 400 400 Bal 400 400 Jolene Upton, Capital Unearned Fees Accounts Receivable Service Revenue Service Revenue Accounts Receivable Service Revenue Cash 19000 Prepaid Rent 8000 Prepaid Insurance 12750 Miscellaneous Expense 10400 Accounts Payable 8500 Salary Expense 12000 Supplies 7100 Salary Expense Miscellaneous Expense Miscellaneous Expense Jolene Upton, Drawing Bal 77750 5100 6000 4500 500 3000 1500 1000 1500 325 675 20000 38750 77750 Cash Bal Accounts Payable 3000 Office Equipment 2100 5100 5100 140 Salaries Payable Salary Expense 140 140 Bal 140 12750 12000 8000 Accounts Receivable Jolene Upton, Capital 22300 Cash Service Revenue 14200 Cash Service Revenue 9000 Service Revenue 5500 Bal 51000 Unearned Fees Service Revenue 5000 Cash Bal 3000 8000 8000 26250 51000 1950 Supplies Jolene Upton, Capital 3800 Supplies Expense Cash 1000 Bal 4800 Jolene Upton, Capital Cash Accounts Receivable Supplies 54000 Office Equipment 54000 19000 22300 3800 8900 54000 Bal 2850 4800

Prepaid Rent 6000 Rent Expense Cash Cash Jolene Upton, Drawing 20000 Bal 20000 2000 4000 6000 Bal 20000 20000 6000 Cash Prepaid Insurance 4500 Insurance Expense Bal 4500 375 4125 4500 Service Revenue Accounts Receivable Cash Accounts Receivable Cash Cash Accounts Receivable 59700 Unearned Fees 59700 14200 10400 9000 8500 7100 5500 5000 59700 Office Equipment Jolene Upton, Capital 8900 Accounts Payable 5100 Bal 14000 Bal 14000 14000

Cash Cash Miscellaneous Expense 325 675 500 Bal 1500 Cash 1500 1500 Cash Cash Salaries Payable Salary Expense 1500 1500 140 Bal 3140 3140 3140 Prepaid Insurance Insurance Expense 375 Bal 375 375 375 Supplies Supplies Expense 1950 Bal 1950 1950 1950 Depreciation expense Accum. Depre - Off.Equip. 400 Bal 400 400 400 Prepaid Rent Rent Expense 2000 Bal 2000 2000 2000