Question

At June 30, 2017 the end of its most recent fiscal year, Green River Computer Consultants post-closing trial balance was as follows: Debit Credit Cash $5.230 1.200 Accounts receivable Supplies 690 Accounts payable Unearned service revenue 5400 1.120 3.600 Common stock Retained earnings 2,000 57,120 $7.120 The company underwent a major expansion in July. New staff was hired and more financing was obtained Green River conducted the following transactions during July 2017, and adjusts its accounts monthly July 1 Purchased equipment paying 54.000 cash and signing a 2-year note payable for $20,000. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month. 2' Issued 20,000 shares of common stock for $50,000 cash 3 Paid $3.600 cash for a 12-month insurance policy effective July 1. 3 Paid the first 2 Ouly and August 2017) months' rent for an annual lease of office space for $4,000 per month 6 Paid $3.800 for supplies. Visited client offices and agreed on the terms of a consulting project. Green River will bill the client, Corner Productions on the 20th of each month for services performed 10 Collected $1.200 cash on account from Milani Brothers. This client was biled in June when Green River performed the service Performed services for geral Enterprises. This client paid $1,120 in advance last month All services relating to this payment are now 15 completed 14 Paid $400 cash for a utility bil. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $12.000 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $11.000 20 Performed services worth $28.000 on account and billed customers. 20 Received a bill for $2.200 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,000 of revenue from the cash advance received July 16. 27 Received $15,000 cash from customers billed on July 20

Answer 1

Green River Computer Consultants Dr. Debit in $ Credit in $ 24000 Journal Enteries Date Particulars 1.1.2017 Equipment a/c To Cash To Note Payable (Equipment purchased) 4000 20000 Dr. 50000 2.7.2017 Cash a/c To Common Stock (Common stock issued) 50000 Dr. 3600 3.7.2017 Prepaid Insurance a/c To Cash (12 month insurance paid) 3600 Dr. 4000 3.7.2017 Prepaid Rent a/c To Cash (2 months rent paid) 4000 6.7.2017 Dr. 3800 Supplies a/c To Cash (Supplies purchased) 3800 9.7.2017 No Journal Entry Dr. 1200 10.7.2017 Cash a/c To Accounts Receivable (Cash from debtors) 1200 Dr. 1120 13.7.2017 Unearned Service Revenue a/c To Service Revenue (Revenue recognized) 1120

Dr. Date Particulars 14.7.2017 Accounts Payable a/c To Cash (Creditors paid) Debit in $ Credit in $ 400 400 12000 16.7.2017 Cash a/c Dr. To Unearned Service Revenue (Advance from client) 12000 Dr. 11000 18.7.2017 Salaries Expense a/c To Cash (Salaries paid) 11000 28000 20.7.2017 Accounts Receivable a/c Dr. To Service Revenue (Services on account) 28000 Dr. 2200 20.7.2017 Advertising Expense a/c To Accounts Payable (Expense accrued) 2200 Dr. 10000 23.7.2017 Unearned Service Revenue a/c To Service Revenue (Revenue recognized) 10000 15000 27.7.2017 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 15000

Adjusting Enteries Date Particulars 31.7.2017 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) 3600 / 12 Debit in $ Credit in $ 300 300 Dr. 4000 31.7.2017 Rent Expense a/c To Prepaid Rent (Rent expensed) 4000 Dr. 1250 31.7.2017 Supplies Expense a/c To Supplies (Supplies expensed) 1250 31.7.2017 Depreciation Expense a/c Dr. To Accum. Depre - Equip. (To record depreciation) 500 31.7.2017 Interest Expense a/c Dr. To Interest Payable (Interest accrued) 20000 x 6% x 1/12 100 Dr. 11000 31.7.2017 Salaries Expense a/c To Salaries Payable (Salary accrued) 11000 Dr. 31.7.2017 Utilities Expense a/c To Accounts Payable (Expense accrued) 800 Dr. 1200 31.7.2017 Income Tax Expense a/c To Income Tax Payable (Income Tax accrued) 1200

Worksheet For the Month ending 31.7.2017 Particulars Cash Accounts Receivable Supplies Prepaid Insurance Prepaid Rent Equipment Accum. Depre - Equip. Accounts Payable Unearned Service Revenue Interest Payable Salaries Payable Income Tax Payable Note Payable Common Stock Retained Earnings Service Revenue Salaries Expense Advertising Expense Insurance Expense Rent Expense Supplies Expense Depreciation Expense Interest Expense Utilities Expense Income Tax Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 56630 56630 13000 13000 4490 1250 3240 3600 300 3300 4000 4000 24000 24000 500 500 2200 800 3000 2000 2000 100 100 11000 11000 1200 1200 20000 20000 53600 53600 2000 2000 39120 39120 11000 11000 22000 2200 2200 300 300 4000 4000 1250 1250 500 500 100 100 800 800 1200 1200 118920 118920 19150 19150 132520 132520

11000 Salaries Payable Salaries Expense 11000 11000 Bal Common Stock Accounts Receivable Unearned Service Rev Accounts Receivable Bal. 11000 Cash 5230 Equipment 50000 Prepaid Insurance 1200 Prepaid Rent 12000 Supplies 15000|Accounts Payable Salaries Expense Bal. 83430 4000 3600 4000 3800 400 11000 56630 83430 1200 Income Tax Payable Income Tax Expense 1200 1200 Bal. 1200 20000 Bal Service Revenue Accounts Receivable 1200 Cash 28000 Cash Bal. 29200 1200 15000 13000 Note Payable Equipment 20000 20000 Bal. 20000 29200 Bal Common Stock Bal. 53600 Cash 53600 1250 Bal. Supplies 690 Supplies Expense 3800 Bal. 4490 3600 50000 53600 Cash 3240 4490 2000 Retained Earnings Bal. 2000 2000 Bal. Cash 300 2000 Prepaid Insurance 3600 Insurance Expense Bal. 3600 3300 3600 Cash 4000 Prepaid Rent 4000 Rent Expense Bal. 4000 Service Revenue Unearned Service Rev Accounts Receivable 39120 Unearned Service Rev 39120 1120 28000 10000 39120 4000 Bal.

Equipment 4000 Cash Note Payable 20000 Bal. 24000 24000 24000 Cash Salaries Payable Salaries Expense 11000 11000 Bal. 22000 22000 22000 Accum. Depre - Equip. Depreciation Exper 500 500 Advertising Expense 2200 Bal. Accounts Payable 500 500 Bal. 2200 2200 2200 Cash Accounts Payable 400 Bal. Advertising Expens 3000 Utilities Expense 3400 Insurance Expense 300 Prepaid Insurance 400 2200 800 3400 Bal. Bal. 300 300 300 Prepaid Rent Service Revenue Service Revenue Bal. Unearned Service Revenue 1120 Bal. 10000 Cash 2000 13120 1120 12000 Rent Expense 4000 Bal. 4000 4000 4000 13120 Supplies Supplies Expense 1250 Bal. 1250 Interest Payable Interest Expense 100 100 100 1250 1250 Bal. 100 Interest Expense Accum. Depre-E Depreciation Expense 500 Bal. 500 Interest Payable 100 Da 500 500 Bal. 100 100 Accounts Payable Utilities Expense 800 Bal. 800 800 800 Income Tax Payable Income Tax Expense 1200 Bal. 1200 1200 1200