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Complete Accounting Cycle

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

Apr. 1.		The following assets were received from Jeff Horton: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. 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, $4,200.
4.		Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400.
5.		Purchased additional office equipment on account from Smith Office Supply Co., $8,000.
6.		Received cash from clients on account, $11,700.
10.		Paid cash for a newspaper advertisement, $350.
12.		Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400.
12.		Provided services on account for the period April 1–12, $21,900.
14.		Paid receptionist for two weeks' salary, $1,650.

Record the following transactions on Page 2 of the journal:
17.		Received cash from cash clients for fees earned during the period April 1–16, $6,600.
18.		Paid cash for supplies, $725.
20.		Provided services on account for the period April 13–20, $16,800.
24.		Received cash from cash clients for fees earned for the period April 17–24, $4,450.
26.		Received cash from clients on account, $26,500.
27.		Paid receptionist for two weeks' salary, $1,650.
29.		Paid telephone bill for April, $540.
30.		Paid electricity bill for April, $760.
30.		Received cash from cash clients for fees earned for the period April 25–30, $5,160.
30.		Provided services on account for the remainder of April, $2,590.
30.		Jeff withdrew $18,000 for personal use.

Required:

1. Journalize each transaction, in chronological order, in a two-column journal starting on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. If there is more than one entry on the same date, be sure to enter the transactions in the exact order as presented in the data. (Do not insert the account numbers in the journal at this time.) For a compound transaction, if an amount box does not require an entry, leave it blank.

11	Cash		31	Jeff Horton, Capital
12	Accounts Receivable		32	Jeff Horton, Drawing
14	Supplies		41	Fees Earned
15	Prepaid Rent		51	Salary Expense
16	Prepaid Insurance		52	Supplies Expense
18	Office Equipment		53	Rent Expense
19	Accumulated Depreciation		54	Depreciation Expense
21	Accounts Payable		55	Insurance Expense
22	Salaries Payable		59	Miscellaneous Expense
23	Unearned Fees

JOURNAL				PAGE 1
Date	Account Title	Post. Ref.	Debit	Credit
2019
Apr. 1	Cash
	Accounts Receivable
	Supplies
	Office Equipment
	Jeff Horton, Capital
Apr. 1	Prepaid Rent
	Cash
Apr. 2	Prepaid Insurance
	Cash
Apr. 4	Cash
	Unearned Fees
Apr. 5	Office Equipment
	Accounts Payable
Apr. 6	Cash
	Accounts Receivable
Apr. 10	Miscellaneous Expense
	Cash
Apr. 12	Accounts Payable
	Cash
Apr. 12	Accounts Receivable
	Fees Earned
Apr. 14	Salary Expense
	Cash
JOURNAL				PAGE 2
Date	Account Title	Post. Ref.	Debit	Credit
2019
Apr. 17	Cash
	Fees Earned
Apr. 18	Supplies
	Cash
Apr. 20	Accounts Receivable
	Fees Earned
Apr. 24	Cash
	Fees Earned
Apr. 26	Cash
	Fees Earned
Apr. 27	Salary Expense
	Cash
Apr. 29	Miscellaneous Expense
	Cash
Apr. 30	Miscellaneous Expense
	Cash
Apr. 30	Cash
	Fees Earned
Apr. 30	Accounts Receivable
	Fees Earned
Apr. 30	Jeff Horton, Drawing
	Cash

You will use the attached spreadsheet to complete several of the remaining parts of this problem. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

2. Post the transactions from part 1 to the general ledger in the attached spreadsheet. The posting must be in chronological order. Be sure to go back and enter the appropriate posting references in the journal.

3. In the spreadsheet, prepare an unadjusted trial balance.

4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during April is $350.
b. Supplies on hand on April 30 are $1,225.
c. Depreciation of office equipment for April is $400.
d. Accrued receptionist salary on April 30 is $275.
e. Rent expired during April is $2,000.
f. Unearned fees on April 30 are $2,350.

5. (Optional) In the spreadsheet, notice that the unadjusted trial balance amounts have been entered. Enter the adjusting entries and complete the remainder of the worksheet.

6. Journalize the adjusting entries on Page 3 of the journal. (Do not insert the account numbers in the journal at this time.) Post the adjusting entries to the general ledger in the spreadsheet. The posting must be in chronological order. Then go back and enter the appropriate posting references in the journal.

GENERAL JOURNAL				PAGE 3
Date	Account Title	Post.Ref.	Debit	Credit
	Adjusting Entries
a.
b.
c.
d.
e.
f.

7. In the spreadsheet, prepare the adjusted trial balance.

8. Prepare an income statement, a statement of owner's equity, and a balance sheet.

Rosebud Consulting Income Statement For the Month Ended April 30, 2019
		$
Expenses:
	$
Total Expenses
		$

Rosebud Consulting Statement of Owner's Equity For the Month Ended April 30, 2019
		$
	$
	$
		$

Rosebud Consulting Balance Sheet April 30, 2019
Assets			Liabilities
Current assets:			Current liabilities:
	$			$
			Total liabilities		$
Total current assets		$
Property, plant and equipment:			Owner's Equity
	$
Total property, plant and equipment
Total assets		$	Total liabilities and owner's equity		$

9. Journalize the closing entries on Page 4 of the journal. (Do not insert the account numbers in the journal at this time.) Post the closing entries to the general ledger in the spreadsheet. Then go back and enter the appropriate posting references in the journal.

For a compound transaction, if an amount box does not require an entry, leave it blank.

GENERAL JOURNAL				PAGE 4
Date	Description	Post.Ref.	Debit	Credit
2019	Closing Entries

10. Prepare a post-closing trial balance. If a box does not require an entry, leave it blank.

Rosebud Consulting Post-Closing Trial Balance April 30, 2019
	Debit Balances	Credit Balances

Answer 1

Rosebud Consulting Journal Enteries Date 1.4.2018 Cash a/c Particulars Debit in $ Credit in $ Accounts Receivable a/c Supplies a/c Office Equipment a/c Dr 14700 Dr 3300 Dr To Jeff Horton, Capital 1.4.2018Prepaid Rent a/c 6000 To Cash 6000 2.4.2018 Prepaid Insurance a/c Dr 4200 To Cash 4200 4.4.2018Cash a/c Dr 9400 To Unearned fees 9400 Office Equipment a/c Dr. To Accounts Payable 5.4.2018 8000 8000 6.4.2018Cash a/c 11700 To Accounts Receivable 11700 10.4.2018 Miscellaneous Expense a/c Dr To Cash 350 350 12.4.2018 Accounts Payable a/c Dr 6400 To Cash 6400 12.4.2018 Accounts Receivable a/c Dr 21900 To Fees earned 21900 14.4.2018 Salary expense a/cDr 1650 To Cash 1650

Unadjusted Trial Balance As at 30.4.2018 Statement of Income for the period ending 30.4.2018 Particulars Fees Earned Less Salary Expense Supplies Expense Rent Expense Depreciation Expense Insurance Expense Miscellaneous Expense Net Income Debit in $ Credit in $ Debit in $ Credit in$ 64550 No. Particulars 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees 31 Jeff Horton, Capital 32 Jeff Horton, Drawing 41 Fees Earned 51 Salary Expense 52 Supplies Expense 53 Rent Expensee 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense 43535 17790 4025 6000 4200 20000 3575 2800 2000 400 350 1650 1600 10775 53775 9400 Statement of Owner's capital Jeff Horton, Capital Add Net Income 50000 18000 50000 53775 103775 18000 85775 57500 3300 Less:Jeff Horton, Drawing 1650 Totals 118500 118500

Adjusting enteries Date 30.4.2018 Insurance expense a/cDr Adjusted Trial Balance As at 30.4.2018 Particulars Debit in $ Credit in $ Debit in $ Credit in $ No. Particulars 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees 31 Jeff Horton, Capital 32 Jeff Horton, Drawing 41 Fees Earned 51 Salary Expense 52 Supplies Expense 53 Rent Expensee 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense 350 To Prepaid Insurance 350 43535 17790 30.4.2018 Supplies expense a/c Dr. 2800 To Supplies 2800 3650 3300+ 725-1225 4200 30.4.2018 Depreciation a/c Dr. 400 To Accumulated Depreciation 1600 275 2350 400 30.4.2018 Salary expense a/cDr 275 To Salary Pavable 275 18000 30.4.2018 Rent expense a/d Dr. 2000 64550 To Prepaid Rent 2000 3575 30.4.2018 Unearned fees a/c Dr. 7050 To Fees earned 7050 350 1650 119175 Totals 119175

Balance Sheet As at 30.4.2018 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Amounts in$ Amounts in $ Liabilities Amounts in $ Amounts in $ 43535 17790 1225 3650 4200 Current Liabilities Accounts Payable Salaries Payable Unearned Fees 1600 275 2350 4225 70400 Owners Equity Jeff Horton, Capital 85775 Non Current Assets Office Equipment Accumulated Depreci Total Assets 20000 -400 19600 90000 Total Liabilities & Shareholders Equity 90000

Closing Enteries Date 30.4.2018 Income Summary a/c Dr Adjusted Trial Balance As at 30.4.2018 No. Particulars Particulars Debit in $ Credit in $ 10775 Debit in $ Credit in $ To Salary Expense To Supplies Expense To Rent Expense To Depreciation Expense To Insurance Expense To Miscellaneous Expense 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees 31 Jeff Horton, Capital 3575 43535 17790 2800 0 0 0 0 400 350 1650 3650 4200 0 0 0 0 0 30.4.2018 Fees Earned 1600 275 2350 85775 64550 To Income Summa 64550 30.4.2018 Income Summary a/c Dr To Jeff Horton, Capital 53775 53775 Totals 30.4.2018 Jeff Horton, Capital a/c Dr To Jeff Horton, Drawing