Question

Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2019. 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	Provided services 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	Received 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	Provided services on account for the period May 16–20, $4,820.
	25	Received 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	Received cash from cash clients for fees earned for the period May 26–31, $3,300.
	31	Provided services on account for the remainder of May, $2,650.
	31	Kelly withdrew $10,500 for personal use.

	Required:
1.	The chart of accounts is shown in a separate panel and the post-closing trial balance as of April 30, 2019, 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. B. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2019, enter Balance in the Item column and enter ‘X’ in the Posting Reference column. C. Journalize each of the May transactions in a 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. A. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. B. Add the appropriate posting reference to the journal.

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.

GENERAL LEDGER Account: Cash Account No. 11 DATE ITEM POST. REF. DEBIT CREDIT BALANCE DEBIT CREDIT 4,500.00 6,950.00 1 5 4,500.00 2,450.00 2 3 4 5 6 7 00 9 10 11 12 13 14

The spreadsheet is supposed to look like this for each account. I am just confused as to what goes exactly where. I figured out the journal, just not the ledger.

Answer 1

Cash Date Item 1.5.2019 Bal. 3.5.2019 Unearned Fees 5.5.2019 Accounts Receivable 9.5.2019 Miscellaneous Expense 13.5.2019 Accounts Payable 16.5.2019 Salary Expense Salaries Payable 17.5.2019 Fees Earned 25.5.2019 Fees Earned 27.5.2019 Accounts Receivable 28.5.2019 Salary Expense 30.5.2019 Miscellaneous Expense 31.5.2019 Miscellaneous Expense 31.5.2019 Fees Earned 31.5.2019 Dividends Account No. 11 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 22100 4500 26600 2450 29050 225 28825 640 28185 630 27555 120 27435 8360 35795 7900 43695 9520 53215 750 52465 260 52205 810 51395 3300 54695 44195 10500 Accounts Receivable Date Item 1.5.2019 Bal. 5.5.2019 Cash 15.5.2019 Fees Earned 21.5.2019 Fees Earned 27.5.2019 Cash 31.5.2019 Fees Earned Account No. 12 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 3400 2450 950 9180 10130 4820 14950 9520 5430 2650 8080 Supplies Date Item 1.5.2019 Bal. 20.5.2019 Accounts Payable 31.5.2019 Supplies Expense Account No. 14 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 1350 735 2085 1370 715 Prepaid Rent Date Item 1.5.2019 Bal. 31.5.2019 Rent Expense Account No. 15 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 3200 1600 1600 Prepaid Insurance Date Item 1.5.2019 Bal. 31.5.2019 Insurance Expense Account No. 16 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 1500 275 1225 Office Equipment Account No. 18 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 14500 Date Item 1.5.2019 Bal.

Accumulated Depreciation Date Item 1.5.2019 Bal. 31.5.2019 Depreciation Expense Account No. 19 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 330 330 660 Accounts Payable Date Item 1.5.2019 Bal. 13.5.2019 Cash 20.5.2019 Supplies Account No. 21 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 800 640 160 735 895 Salaries Payable Account No. 22 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 325 325 Date Item 31.5.2019 Salary Expense Unearned Fees Date Item 1.5.2019 Bal. 3.5.2019 Cash 31.5.2019 Fees Earned Account No. 23 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 2500 4500 7000 3790 3210 Fees Earned Date Item 15.5.2019 Accounts Receivable 17.5.2019 Cash 21.5.2019 Accounts Receivable 25.5.2019 Cash 31.5.2019 Cash 31.5.2019 Accounts Receivable 31.5.2019 Unearned fees Account No. 41 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 9180 9180 8360 17540 4820 22360 7900 30260 3300 2650 36210 3790 40000 33560 Salary Expense Date Item 16.5.2019 Cash 28.5.2019 Cash 31.5.2019 Salaries Payable Account No. 51 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 630 630 750 1380 325 1705 Rent Expense Account No. 52 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 1600 1600 Date Item 31.5.2019 Prepaid Rent Supplies Expense Account No. 53 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 1370 1370 Date Item 31.5.2019 Supplies Depreciation Expense Account No. 54 Balance Date Item Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 31.5.2019 Accumulated Depreciation 330 330 Insurance Expense Account No. 55 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 275 275 Date Item 31.5.2019 Prepaid Insurance Miscellaneous Expense Date Item 9.5.2019 Cash 30.5.2019 Cash 31.5.2019 Cash Account No. 59 Balance Post Ref. Debit in $ Credit in $ Debit in $ Credit in $ 225 225 260 485 810 1295

Kelly Consulting Journal Enteries Date Particulars 3.5.2019 Cash a/c Dr. To Unearned fees (Advance received from clients) Debit in $ Credit in $ 4500 4500 Dr. 2450 5.5.2019 Cash a/c To Accounts Receivable (Cash from debtors) 2450 225 9.5.2019 Miscellaneous Expense a/c Dr. To Cash (Advertisement expense paid) 225 Dr. 640 13.5.2019 Accounts Payable a/c To Cash (Creditors paid) 640 Dr. 9180 15.5.2019 Accounts Receivable a/c To Fees Earned (Fees accrued) 9180 630 Dr. Dr. 120 16.5.2019 Salary Expense a/c Salaries Payable a/c To Cash (Salary paid in cash) 750 Dr. 8360 17.5.2019 Cash a/c To Fees Earned (Fees earned in cash) 8360 735 20.5.2019 Supplies a/c Dr. To Accounts Payable (Supplies on account) 735

Date Dr. Particulars 21.5.2019 Accounts Receivable a/c To Fees Earned (Fees accrued) Debit in $ Credit in $ 4820 4820 Dr. 7900 25.5.2019 Cash a/c To Fees Earned (Fees earned in cash) 7900 9520 27.5.2019 Cash a/c Dr. To Accounts Receivable (Cash from debtors) 9520 Dr. 750 28.5.2019 Salary Expense a/c To Cash (Salary paid in cash) 750 260 30.5.2019 Miscellaneous Expense a/c Dr. To Cash (Telephone Bill) 260 810 31.5.2019 Miscellaneous Expense a/c Dr. To Cash (Electricity Bill) 810 Dr. 3300 31.5.2019 Cash a/c To Fees Earned (Fees earned in cash) 3300 Dr. 2650 31.5.2019 Accounts Receivable a/c To Fees Earned (Fees accrued) 2650 10500 31.5.2019 Dividends a/c Dr. To Cash (Cash withdrawn for personal use) 10500

Adjusting Enteries Date Particulars 31.5.2019 Insurance Expense a/c Dr. To Prepaid Insurance (Insurance expensed) Debit in $ Credit in $ 275 275 31.5.2019 Supplies Expense a/c Dr. 1370 To Supplies (Supplies expensed) 1350+735-715 = 1370 1370 330 31.5.2019 Depreciation Expense a/c Dr. To Accum. Depre- Off.Equip (To record depreciation) 330 Dr. 325 31.5.2019 Salary Expense a/c To Salaries Payable (Salary expense accrued) 325 Dr. 1600 31.5.2019 Rent Expense a/c To Prepaid Rent (Rent expensed) 1600 31.5.2019 Unearned fees a/c Dr. 3790 To Fees Earned (Fees earned) 2500+ 4500 - 3210 = 3790 3790

Worksheet For the Month ending 31.5.2019 Particulars Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Accounts Payable Salaries Payable Unearned Fees Common Stock Retained Earnings Dividends Fees Earned Salary Expense Rent Expense Supplies Expense Depreciation Expense Insurance Expense Miscellaneous Expense Totals Net Income Unadjusted TB Adjustments Adjusted TB Income Statement Balance sheet Post Closing Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 54695 10500 44195 44195 44195 5430 2650 8080 8080 8080 2085 1370 715 715 715 3200 1600 1600 1600 1600 1500 275 1225 1225 1225 14500 14500 14500 14500 330 330 660 660 660 895 895 895 895 0 325 325 325 325 7000 3790 3210 3210 3210 30000 30000 30000 30000 12300 12300 35225 35225 10500 10500 33560 6440 40000 40000 1380 325 1705 1705 1600 1600 1600 1370 1370 1370 330 330 330 275 275 275 1295 1295 1295 84085 84085 20840 20840 87390 87390 6575 40000 70315 70315 70315 70315 33425 40000 40000 70315 70315

40000 Income Statement For the Month ending 31.5.2019 Fees Earned Less: Salary Expense 1705 Rent Expense 1600 Supplies Expense 1370 Depreciation Expense 330 Insurance Expense 275 Miscellaneous Expense 1295 Net Income 6575 33425 Statement of Retained Earnings For the Month ending 31.5.2019 Beginning Net Income 12300 33425 45725 Less:Dividends -10500 35225

Amounts in $ Amounts in $ Balance sheet As at 31.5.2019 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Amounts in $ Amounts in $ Liabilities Current Liabilities 44195 Accounts Payable 8080 Salaries Payable 715 Unearned Fees 1600 895 325 3210 4430 1225 55815 14500 30000 Non Current Assets Office Equipment Accumulated Depreciation Total Assets Shareholders Equity Common Stock 13840 Retained Earnings 69655 Total Liabilities & Equity -660 35225 65225 69655