Question

July 1	Acquired $28,000 cash by issuing common stock.
July 2	Paid $6,600 cash in advance for a one-year lease on an office.
July 2	Borrowed $18,000 from National Bank by signing a two-year note with interest at 9% per year. The principal and interest will be repaid on July 1, 2021.
July 3	Paid $14,400 cash for office equipment with a useful life of 5 years and no salvage value.
July 4	Paid $300 cash for a one-year insurance policy.
July 7	Purchased supplies on account for $450.
July 10	Earned $9,000 of consulting revenue. Client paid cash.
July 15	Hired a secretary-receptionist and agreed to pay him $1,200 a month, payable the first of every month for the wages earned in the prior month.
July 20	Received monthly utility bill for $120. It will be paid in August.
July 22	Received $3,000 from a client for services to be performed in August
July 25	Billed clients for providing $8,000 in services.
July 28	Paid for supplies purchased on July 7.
July 30	Collected $2,700 from accounts receivable.

Information for adjusting entries for July 31:

July 31	Make the adjustment for interest on the note payable.
July 31	Make the adjustment for depreciation.
July 31	Make the adjustment for insurance.
July 31	Counted the supplies, had $100 of supplies on hand.
July 31	Make the adjustment for rent expense.
July 31	Make the adjustment for wages earned for one-half month by secretary-receptionist.

Requirement #5: Prepare an income statement, retained earnings statement, and balance sheet for the month of July 2019.

Requirement #6: Prepare closing journal entries for July and post to the ledger.

Requirement #7: Prepare a post-closing trial balance for July 31, 2019.

Answer 1

17,000 Income Statement For the Month Ended July 31, 2019 Revenues Consulting revenue Expenses Wages expense Rent expense Insurance expense Utility expense Supplies expense Depreciation expense Total Operating expenses Operating Income Interest expense Net Income 600 550 25 120 350 240 1,885 15,115 135 14,980 Statement of Retained Earnings For the Month Ended July 31, 2019 Retained Earnings, July 1, 2019 Net Income Less Dividends Retained Earnings, July 31, 2019 14,980 14,980

Balance Sheet As of July 31, 2019 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Total Current Assets Liabilities & Stockholders Equity Current Liabilities 38,950 Accounts Payable 5,300 Wages Payable 100 Interest Payable 6,050 Unearned Revenue 275 50,675 Total Current Liabilities 120 600 135 3,000 3,855 Long-term Liabilties 14,400 Notes Payable 18,000 Property, Plant & Equipment Office Equipment Accumulated Depreciation Total Property, Plant & Equipment (240) 14,160 Total Liabilties 21,855 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity 28,000 14,980 42,980 Total Assets 64,835 Total Liabilities & Stockholders Equity 64,835

Closing entries 31-Jul Consulting revenue Income Summary $ 17,000 $ 17,000 $ 2,020 S $ 31-Jul Income Summary Wages expense Rent expense Insurance expense Utility expense Supplies expense Depreciation expense Interest expense 600 550 25 120 350 $ $ 240 135 $ 14,980 31-Jul Income Summary Retained Earnings $ 14,980

Date Credit Credit Company T Accounts Date Debit Date Credit Cash 1-Jul $ 28,000 2-Jul $ 6,600 2-Jul $ 18,000 3-Jul $ 14,400 10-Jul $ 9,000 4-Jul $ 300 22-Jul $ 3,000 28-Jul $ 450 30-Jul $ 2,700 Date Debit Date Credit Accounts Receivable 25-Jul $ 8,000 30-Jul $ 2,700 Debit Date Supplies -Jul $ 450 Date Debit Date Prepaid Rent 2-Jul $ 6,600 7 Unadj Bal. $ 38,950 Unadj Bal. $ 5,300 Unadj Bal. $ 450 Unadj Bal. $ 6,600 31-Jul $ 350 31-Jul $ 550 Adj Bal. $ 6,050 Adj Bal. $ 38,950 Prepaid Insurance 4-Jul $ 300 Adj Bal. $ 5,300 Office Equipment 3-Jul $ 14,400 Adj Bal. $ 100 Accumulated Depreciation Op bal Unadi Bal. $ 300 Unadj Bal. $ 14,400 Unadj Bal. $ 31-Jul $ - 240 31-Jul $ 25 Adj Bal. $ 240 Adj Bal. $ 275 Accounts Payable 7-Jul $ 28-Jul $ 450 20-Jul $ $ 14,400 Wages Payable Op bal Adj Bal. Interest Payable Op bal Unearned Revenue 22-Jul $ 3,000 450 120 Unadj Bal. $ 120 Unadj Bal. $ 3,000 Unadj Bal. $ 31-Jul $ - 600 Unadj Bal. $ 31-Jul $ - 135 $ 135 $3,000 Adj Bal. $ 120 Notes Payable 2-Jul $ 18,000 Adj Bal. $ 600 Common Stock 1-Jul $ 28,000 Adj Bal. Retained Earnings Adj Bal. Income Summary Unadj Bal. $ 18,000 Unadj Bal. $ 28,000 Unadj Bal. $ . Unadj Bal. $ . Adj Bal. $18,000 Adj Bal. $ 28,000 Adj Bal. $ - Adj Bal. $ . 31-Jul $ 17,000 31-Jul $ 2,020 31-Jul $ 14,980 31-Jul $14,980 Bal. $ 14,980 $ . Bal. Insurance expense Wages expense Rent expense Consulting revenue 10-Jul $ 9,000 25-Jul $ 8,000 Unadj Bal. $ 17,000 Unadj Bal.$ 31-Jul $ . 600 Unadj Bal. $ 31-Jul $ Unadj Bal.$ 31-Jul $ 550 25 Adj Bal. $ 17,000 Adj Bal. $ 600 Adj Bal. $ 550 Adj Bal. $ 25 31-Jul $ 17,000 31-Jul $ 600 31-Jul $ 550 31-Jul $ 25 $ - Bal. Bal. Bal. S - Bal. Utility expense 20-Jul $ 120 $ - Supplies expense Depreciation expense Interest expense Unadj Bal. $ 120 Unadj Bal. $ 31-Jul $ Unadj Bal. $ 31-Jul $ . 240 Unadj Bal $ 31-Jul $ . 135 350 Adj Bal. $ 120 Adj Bal. $ 350 Adj Bal. $ 240 Adj Bal. $ 135 31-Jul $ 120 31-Jul $ 350 31-Jul $ 240 31-Jul $ 135 Bal. $ . Bal. $ Bal. $ . Bal. $ -

Post Closing TB Debit Credit 38,950 5,300 100 6,050 275 14,400 Company Account Names Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Accounts Payable Wages Payable Interest Payable Unearned Revenue Notes Payable Common Stock Retained Earnings Totals 240 120 600 135 3,000 18,000 28,000 14,980 65,075 65,075