Question

Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions:

May	3	Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
	5	Received cash from clients on account, $2,450.
	9	Paid cash for a newspaper advertisement, $225.
	13	Paid Office Station Co. for part of the debt incurred on April 5, $640.
	15	Recorded services provided on account for the period May 1–15, $9,180.
	16	Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.
	17	Recorded cash from cash clients for fees earned during the period May 1–16, $8,360.

Record the following transactions on Page 6 of the journal:

May	20	Purchased supplies on account, $735.
	21	Recorded services provided on account for the period May 16–20, $4,820.
	25	Recorded cash from cash clients for fees earned for the period May 17–23, $7,900.
	27	Received cash from clients on account, $9,520.
	28	Paid part-time receptionist for two weeks’ salary, $750.
	30	Paid telephone bill for May, $260.
	31	Paid electricity bill for May, $810.
	31	Recorded cash from cash clients for fees earned for the period May 26–31, $3,300.
	31	Recorded services provided on account for the remainder of May, $2,650.
	31	Paid dividends, $10,500.

	Required:
1.	The chart of accounts is shown in a separate panel and the post-closing trial balance as of April 30, 2018, is shown below. A. Download the spreadsheet in the Ledger panel and save the Excel file to your computer. 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. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of the four-column account. Date the balances May 1, enter Balance in the Item column and select a check mark in the Posting Reference column. B. Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Do not insert the account numbers in the journal at this time.)
2.	Post the journal entries on pages 5 and 6 of the journal to the ledger of four-column accounts. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.
3.	Prepare an unadjusted trial balance.
4.	At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). • Insurance expired during May is $275. • Supplies on hand on May 31 are $715. • Depreciation of office equipment for May is $330. • Accrued receptionist salary on May 31 is $325. • Rent expired during May is $1,600. • Unearned fees on May 31 are $3,210.
5.	(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.
6.	A. Journalize the adjusting entries on Page 7 of the journal. Refer to the Chart of Accounts for exact wording of account titles. B. Post the adjusting entries to the ledger. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.
7.	Prepare an adjusted trial balance.

Kelly Consulting

POST-CLOSING TRIAL BALANCE

April 30, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	22,100.00
2	Accounts Receivable	3,400.00
3	Supplies	1,350.00
4	Prepaid Rent	3,200.00
5	Prepaid Insurance	1,500.00
6	Office Equipment	14,500.00
7	Accumulated Depreciation		330.00
8	Accounts Payable		800.00
9	Salaries Payable		120.00
10	Unearned Fees		2,500.00
11	Common Stock		30,000.00
12	Retained Earnings		12,300.00
13	Dividends
14	Income Summary
15	Totals	46,050.00	46,050.00

Chart of Accounts

CHART OF ACCOUNTS
Kelly Consulting
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary	REVENUE 41 Fees Earned EXPENSES 51 Salary Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense

Unadjusted Trial Balance

3. Prepare an unadjusted trial balance. Accounts with zero balances can be left blank.

Kelly Consulting

UNADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Rent
5	Prepaid Insurance
6	Office Equipment
7	Accumulated Depreciation
8	Accounts Payable
9	Salaries Payable
10	Unearned Fees
11	Common Stock
12	Retained Earnings
13	Dividends
14	Fees Earned
15	Salary Expense
16	Rent Expense
17	Supplies Expense
18	Depreciation Expense
19	Insurance Expense
20	Miscellaneous Expense
21	Totals

Adjusted Trial Balance

7. Prepare an adjusted trial balance. Accounts with zero balances can be left blank.

Kelly Consulting

ADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Rent
5	Prepaid Insurance
6	Office Equipment
7	Accumulated Depreciation
8	Accounts Payable
9	Salaries Payable
10	Unearned Fees
11	Common Stock
12	Retained Earnings
13	Dividends
14	Fees Earned
15	Salary Expense
16	Rent Expense
17	Supplies Expense
18	Depreciation Expense
19	Insurance Expense
20	Miscellaneous Expense
21	Totals

Answer 1

Date	Account number	Account Name		Debit	Credit
May-03	11	Cash		4,500
	23		Unearned fees		4,500
May-05	11	Cash		2450
	12		Accounts Receivable		2450
May-09	59	Miscellaneous Expenses		25
	11		Cash		25
May-13	21	Accounts payable		640
	11		Cash		640
May-15	12	Accounts Receivable		9180
	41		Fees Earned		9180
May-16	22	Salaries Payable		120
	51	Salary expenses		630
	11		Cash		750
May-17	11	Cash		8360
	41		Fees Earned		8360
May-20	14	Supplies		735
	11		Cash		735
May-21	12	Accounts Receivable		4820
	41		Fees Earned		4820
May-25	11	Cash		7900
	41		Fees Earned		7900
May-27	11	Cash		9520
	12		Accounts Receivable		9520
May-28	51	Salary expenses		750
	11		Cash		750
May-30	59	Miscellaneous Expenses		260
	11		Cash		260
May-31	59	Miscellaneous Expenses		810
	11		Cash		810
May-31	11	Cash		3300
	41		Fees Earned		3300
May-31	23	Unearned fees		2650
	41		Fees earned		2650
May-31	33	Dividend		10500
	11		Cash		10500
Adjustment Entries
May-31	55	Insurance Expenses		275
	16		Prepaid Insurance		275
May-31	53	Supplies Expenses		1370
	14		Supplies		1370
May-31	54	Depreciation Expenses		330
	19		Accumulated Depreciation		330
May-31	51	Salary Expenses		325
	22		Salary payable		325
May-31	52	Rent Expenses		1600
	15		Prepaid Rent		1600
May-31	23	Unearned Fees		1140
	41		Fees earned		1140

	Opening Trial Balance		Unadjusted Trial Balance		Adusted Trial Balance
Account title	Debit	Credit	Debit	Credit	Debit	Credit
Cash	22,100		43,660		43,660
Accounts Receivable	3,400		5,430		5,430
Supplies	1,350		2,085		715
Prepaid Rent	3,200		3,200		1,600
Prepaid Insurance	1,500		1,500		1,225
Office Equipment	14,500		14,500		14,500
Accumulated Depreciation		330		330		660
Accounts Payable		800		160		160
Salaries Payable		120		-		325
Unearned Fees		2,500		4,350		3,210
Common Stock		30,000		30,000		30,000
Retained Earnings		12,300		12,300		12,300
Dividends			10,500		10,500
Miscellaneous Expenses			1,095		1,095
Salary Expenses			1,380		1,705
Insurance Expenses					275
Supplies Expenses					1370
Depreciation Expenses					330
Rent Expenses					1600
Fees Earned				36,210		37,350
Totals	46,050	46,050	83,350	83,350	84,005	84,005