Question

part a: Record the above transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. )

At June 30, 2018, the end of its most recent fiscal year, River Consultants Ltd.'s post-closing trial balance was as follows: Credit Debit $15,900 1,100 600 Cash Accounts receivable Supplies Accounts payable Income tax payable Unearned revenue Common shares Retained earnings $500 500 1,200 3,200 12,200 $17,600 $17,600 The company underwent a major expansion in July. New staff was hired and more financing was obtained. River conducted the following transactions during July 2018. July 3 Issued $9,700 of common shares for cash. 4 Purchased insurance coverage for a year, $3,720. 5 Paid the first two (July and August 2018) months' rent for an annual lease of office space for $4,100 per month. (Hint: Use the Prepaid Rent account.) 6 Purchased $4,100 of supplies for cash. 6 Purchased equipment, paying $3,500 cash and signing a two-year bank loan for $20,400. The equipment has a four-year useful life. The bank loan has a 6% interest rate, which is payable on the first day of each following month. 10 Visited client offices and agreed on the terms of a consulting project. River will invoice the client, Connor Productions Ltd., on the 19th of each month for work performed. 12 Collected $1,100 on account from Milani Brothers Ltd. This client was invoiced in June when the service was provided. 13 Completed services for Mactaquac Inc. This client paid $1,200 in advance last month. All services relating to this payment are now completed. (Hint: Use the Fees Earned account.) 16 Paid salaries for the first half of the month, $10,400 17 Paid a utility bill of $500. This related to June utilities that were accrued at the end of June. 18 Met with a new client, Bay Technologies. Received $12,300 cash in advance for future work to be performed. 19 Invoiced Connor Productions for $29,200 of consulting fees provided on account. (Hint: Use the Fees Earned account.) 20 Received an invoice for legal advice, $2,400. The amount is not due until August 20. (Hint: Use the Professional Fees Expense account.) 23 Completed the first phase of the project for Bay Technologies Ltd. Recognized 59,700 of revenue from the cash advance previously received (see July 18 transaction). 25 Paid $500 income tax payable owing at the end of June, in addition to $1,300 for the July income tax instalment. 27 Received $16,100 cash from Connor Productions in partial payment of the invoice issued on July 19. 30 Declared and paid a $4,500 dividend.

Part b: Prepare T accounts, enter any opening balances , post the journal entries and calculate and enter balances. (Post entries in the order of journal entries presented above. If the ending balance is 0 select Bal for the date and enter 0 for the normal balance for that account.)

part c: Prepare a trial balance at July 31.

part D. River Consultants records adjustments monthly. Adjustment data for the month of July are as follows:

1.		Expiry of insurance coverage (see July 4 transaction)
2.		Adjustment of prepaid rent (see July 5 transaction)
3.		Supplies used, $1,300 (see July 6 transaction)
4.		Equipment depreciation, using the straight-line method of depreciation (see July 6 transaction)
5.		Accrual of interest on bank loan (see July 6 transaction)
6.		Salaries for the second half of July, $10,400, to be paid on August 1
7.		Estimated utilities expense for July, $700 (invoice to be received in August)

Record the adjusting entries. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

part e: Post above adjusting entries to the T accounts and calculate and enter balances. (Post entries in the order of journal entries presented above. If the ending balance is 0 select Bal for the date and enter 0 for the normal balance for that account.)

part f: Prepare an adjusted trial balance as at July 31.
part g: Prepare an income statement

Answer 1

River Consultants Ltd. Journal Enteries Date Particulars 3.7.2018 Cash a/c Dr. To Common Stock (Common stock issued) Debit in $ Credit in $ 9700 9700 Debit in $ Credit in $ 18280 13100 3720 8200 4700 24000 2400 4.7.2018 3720 Prepaid Insurance a/c Dr. To Cash ( one year insurance paid) 3720 5.7.2018 Dr. 8200 Prepaid Rent a/c To Cash (2 months rent paid) Trial Balance For the period ending 31.7.2018 Particulars Cash Accounts Receivable Prepaid Insurance Prepaid Rent Supplies Equipment Accounts Payable Income Tax Payable Unearned Revenue Bank Loan Common Shares Retained Earnings Dividend Fees Earned Salaries Expense Professional fees expense Income Tax Expense Totals 8200 2600 20400 12900 12200 4100 6.7.2018 Supplies a/c To Cash (Supplies purchased for cash) 4100 4500 40100 24000 6.7.2018 Equipment a/c Dr. To Cash To Bank Loan (Equipment purchased) 10400 2400 1300 90600 3600 20400 90600 10.7.2018 No Journal Entry 1100 12.7.2018 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 1100 Dr. 1200 13.7.2018 Unearned Revenue a/c To Fees Earned (Revenue recognized) 1200

Dr. Date Particulars 16.7.2018 Salaries Expense a/c To Cash (Salaries paid) Debit in $ Credit in $ 10400 10400 Dr. 500 17.7.2018 Accounts Payable a/c To Cash (Creditors paid) 500 12300 18.7.2018 Cash a/c Dr. To Unearned Revenue (Advance from client) 12300 Dr. 29200 19.7.2018 Accounts Receivable a/c To Fees Earned (Fees provided on account) 29200 2400 20.7.2018 Professional fees expense a/c Dr. To Accounts Payable (Expenses on account) 2400 23.7.2018 Unearned Revenue a/c Dr. To Fees Earned (Revenue recognized) 9700 Dr. Dr. 500 1300 25.7.2018 Income Tax Payable a/c Income Tax Expense a/c To Cash (Income tax paid) 1800 16100 27.7.2018 Cash a/c To Accounts Receivable (Cash from debtors) 16100 Dr. 4500 30.7.2018 Dividend a/c To Cash (Dividend paid) 4500

Cash Accounts Payable 500 Bal. Professional fees expense 2400 2900 Bal Common Shares Accounts Receivable Unearned Revenue Accounts Receivable 500 2400 Bal. 2900 Cash 15900 Prepaid Insurance 9700 Prepaid Rent 1100 Supplies 12300 Equipment 16100 Salaries Expense Accounts Payable Income Tax Payable Income Tax Expense Dividend Bal. 55100 3720 8200 4100 3600 10400 500 500 1300 4500 18280 55100 Income Tax Payable 500 Bal. Cash 500 500 500 Unearned Revenue Fees Earned 1200 Bal. Fees Earned 9700 Cash Bal. 2600 13500 1200 12300 Accounts Receivable 1100 Cash 29200 Cash Bal. 30300 Bal Fees Earned 13500 1100 16100 13100 30300 20400 Bank Loan Equipment 20400 20400 ਸ ਸ ਸ ਸ ਸ ਸ ਸ Cash Prepaid Insurance 3720 Insurance Expense Bal. 3720 20400 310 3410 3720 3200 Common Shares Bal. 3200 3200 Bal. Cash 3200 Prepaid Rent 8200 Rent Expense Bal. 8200 4100 4100 8200 12200 Retained Earnings Bal. 12200 12200 12200 Bal Cash Supplies 600 Supplies Expense 4100 Bal. 4700 1300 3400 4700 Dividend Cash 4500 Bal. 4500 4500 4500 Cash Bank Loan Equipment 3600 20400 Bal. 24000 24000 24000

Adjusting Enteries Date Particulars 31.7.2018 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expired) 3720 / 12 Debit in $ Credit in $ 310 310 Dr. 4100 31.7.2018 Rent Expense a/c To Prepaid Rent (Rent expensed) 4100 Dr. 1300 31.7.2018 Supplies Expense a/c To Supplies (Supplies expensed) 1300 500 31.7.2018 Depreciation expense a/c Dr. To Accum. Depre-Equip. (To record depreciation) 24000 / 48 - 500 Dr. 102 31.7.2018 Interest expense a/c To Interest Payable (Interest accrued) 20400 x 6% x 1/12 102 Dr. 10400 31.7.2018 Salaries Expense a/c To Salaries Payable (Salary accrued) 10400 Dr. 700 31.7.2018 Utilities Expense a/c To Utilities Payable (Utilities accrued) 700

Trial Balance For the period ending 31.7.2018 310 Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 18280 18280 13100 13100 3720 3410 8200 4100 4100 4700 1300 3400 24000 24000 500 500 2400 2400 o 0 102 10400 700 Particulars Cash Accounts Receivable Prepaid Insurance Prepaid Rent Supplies Equipment Accum. Depre - Equip. Accounts Payable Income Tax Payable Interest Payable Salaries Payable Utilities Payable Unearned Revenue Bank Loan Common Shares Retained Earnings Dividend Fees Earned Salaries Expense Professional fees expense Insurance Expense Rent Expense Supplies Expense Depreciation expense Interest expense Utilities Expense Income Tax Expense Totals 2600 20400 12900 12200 102 10400 700 2600 20400 12900 12200 4500 4500 40100 40100 10400 20800 10400 2400 310 4100 2400 310 4100 1300 1300 500 500 102 102 700 700 1300 906001741217412102302 0 1300 90600 102302

Cash Salaries Payable Salaries Expense 10400 10400 Bal. 20800 Fees Earned Unearned Revenue Accounts Receivable 40100 Unearned Revenue 40100 1200 29200 9700 40100 Bal. 20800 20800 Accounts Payable Cash Professional fees expense 2400 Bal. 2400 Income Tax Expense 1300 Bal. 1300 2400 2400 1300 1300 Prepaid Insurance Insurance Expense 310 Bal. Rent Expense Prepaid Rent 4100 310 310 310 Bal. 4100 4100 4100 Supplies Supplies Expense 1300 Bal. 1300 1300 1300 Depreciation expense Accum. Depr 500 Bal. 500 500 500 500 Accum. Depre - Equip. Depreciation expense 500 500 Salaries Payable Salaries Expense Bal. 10400 500 Interest expense 102 Interest Payable Bal. 102 Interest Payable Interest expense 102 102 102 Bal. 102 Utilities Payable Utilities Expense 700 Bal. 700 700 700 700 Utilities Payable Utilities Expense 700 700 Bal 700