Question

222 Chapter 4 Completing the Accounting Cycle Comprehensive Problem 1 22 8. Net income, Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The account $33,425 ing 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 un earned fees. $4.500 ULTIMET 5 Received cash from clients on account $2.450 9. Pald cash for a newspaper advertisement, $225 13 Pald Office Station Co for part of the debt incurred on April 5.5640 15. Recorded services provided on account for the period May 1-15.59.180 16. Pald part-time receptionist for two weeks salary including the amount owed on April 30, 5750. 17. Record the following Fransactions on Pige 6 of the journal 20 Purchased supplies on account 5735 21. Recorded services provided on account for the period May 16-20, 54,820 25. Recorded cash from casheets forfees earned for the period May 17-23.57.900 27 Received caths from clients on account 59.520 Pald part-time reception for two week'salary, 5750 30 Paid telephone bill for May, 5260 31. Paid electricity be for May $810 31. Recorded cash from cash cents forfees earned for the period May 26-31.53.300 31. Recorded services provided on account for the remainder of May, 52,650 31. Pald dividends $10,500 Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2018, is shown in Exhibit 17. For each account in the post closing trial balance, enter the balance in the appropriate Balance column of a four columnac count. Date the balances May 1, 2018, and place a check mark in the Posting Refer. ence column. Journaline each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consulting's chart of accounts. (Do not insert the account numbers in the oumal at this time) 2. Post the journal to a ledger of four-column accounts 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) A Insurance expired during Maryi 5275 IB) Supplies on hand on May 31 are 5715 IQ Depreciation of office equipment for May is $330 ID Acerved recepcionistasyon May 31 5125 E) Rent expired during May is $1,500 0) Uneamed fees on May 31 are $3.210. 5. Optional Enter the unadjusted trial balance on an end of period spreadsheet and complete the spreadsheet 6. Journalire and post the adjusting entries. Record the adjusting entries on Page 7 of the journal 7. Prepare an adjusted trial balance 8. Prepare an income statement, a retained eaming statement, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal Income Summary is account *34 in the chart of accounts) indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. 10. Prepare a post-closing trial balance
Please answer all of the questions. I am having the most trouble getting started using Exhibit #17 to answer question #1. Thanks

Answer 1

SOLUTION 1. and 2. Journal Date Post. Ref. Debit Credit 2018

May 3 Cash 11 4,500 Unearned Fees 23 4,500 5 Cash 11 2,450 Accounts Receivable 12 2,450 9 Miscellaneous Expense 59 225 Cash 11 225 13 Accounts Payable 21 640 Cash 11 640 15 Accounts Receivable 12 9,180 Fees Earned 41 9,180 51 630 16 Salary Expense Salaries Payable 22 120 Cash 11 750 17 Cash 11 8,360 Fees Earned 41 8,360 Journal Date Post. Ref. Debit Credit 2018 May 14 735 20 Supplies Accounts Payable 21 735 21 Accounts Receivable 12 4,820

Fees Earned 41 4,820 25 Cash 11 7,900 Fees Earned 41 7,900 27 Cash 11 9,520 Accounts Receivable 12 9,520 28 Salary Expense 51 750 Cash 11 750 30 Miscellaneous Expense 59 260 Cash 11 260 31 Miscellaneous Expense 59 810 Cash 11 810 31 Cash 11 3,300 Fees Earned 41 3,300 31 Accounts Receivable 12 2,650 Fees Earned 41 2,650 31 Dividends 33 10,500 Cash 11 10,500 Account: Cash Account No. 11 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018

May 1 Balance 22,100 3 5 4,500 26,600 5 5 2,450 29,050 9 5 225 28,825 13 5 640 28,185 16 5 750 27,435 17 5 8,360 35,795 25 6 7,900 43,695 27 6 9,520 53,215 28 6 750 52,465 30 6 260 52,205 31 6 810 51,395 31 3,300 54,695 31 6 10,500 44,195 Account: Accounts Receivable Account No. 12 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May 1 Balance 3,400 5 5 2,450 950 15 5 9,180 10,130 21 6 4,820 14,950 27 6 9,520 5,430 31 6 2,650 8,080 Account: Supplies Account No. 14 Post Balance Date Item Debit Credit Debit Credit

Ref. 2018 | May 1 Balance 1,350 20 6 735 2,085 31 Adjusting 7 1,370 715 Account: Prepaid Rent Account No. 15 Post Balance Date Item Debit Credit Debit Credit 2018 May 1 Balance 3,200 31 Adjusting 7 1,600 1,600 Account: Prepaid Insurance Account No. 16 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May 1 Balance 31 Adjusting 1,500 1,225 7 275 Account: Office Equipment Account No. 18 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May Balance 14,500 Account: Accumulated Depreciation Office Equipment Account No. 19 Post. Balance Debit Credit Date Item Ref. Debit Credit 2018 May 330 1 Balance 31 Adjusting 7 330 660

Account: Accounts Payable Account No. 21 Post. Balance Debit Credit Date Item Ref. Debit Credit Balance 2018 May 1 13 20 Account: 640 5 6 800 160 895 Account No. 22 735 Salaries Payable Date Post. Balance Debit Credit Item Ref. Debit Credit 2018 May 120 1 Balance 16 31 Adjusting 5 120 325 325 Unearned Fees Account No. Account: 23 Post. Balance Debit Credit Ref. Debit Credit Date Item 2018 May 1 Balance 3 31 Adjusting 区 5 7 4,500 2,500 7,000 3,210 3,790 Account: Common Stock Account No. 31 Post. Balance Debit Credit Date Item Ref. Debit Credit 2018 May Balance 30,000 Account: Retained Earnings Account No. 32 Post. Balance Debit Credit Date Item Ref. Debit Credit 2018

May 1 Balance 31 Closing 31 Closing 8 33,425 12,300 45,725 35,225 8 10,500 Account: Dividends Account No. 33 Post. Balance Debit Credit Date Item Ref. Debit Credit 2018 May 6 10,500 10,500 31 31 Closing 8 10,500 Account: Income Summary Account No. 34 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May 8 40,000 31 Closing 31 Closing 31 Closing 40,000 33,425 8 6,575 8 33,425 Account: Fees Earned Account No. 41 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May 15 5 9,180 17 5 21 6 25 6 8,360 4,820 7,900 3,300 2,650 3,790 9,180 17,540 22,360 30,260 33,560 36,210 40,000 31 6 31 6 7 31 Adjusting 31 Closing 8 40,000 Account: Salary Expense Account No. 51

Post. Balance Debit Credit Date Item Ref. Debit Credit 2018 May 5 630 750 16 28 31 Adjusting 31 Closing 6 7 8 630 1,380 1,705 325 1,705 Account: Rent Expense Account No. 52 Post. Balance Date Item Ref. Debit Credit Debit Credit 2018 May 7 1,600 1,600 31 Adjusting 31 Closing 8 1,600 Account: Supplies Expense Account No. 53 Date Post. Balance Item Ref. Debit Credit Debit Credit 2018 May 7 1,370 1,370 31 Adjusting 31 Closing 8 1,370 Account: Depreciation Expense-Office Equipment Account No. 54 Pos t. Balance Debit Credit Date Item Debit Credit 2018 Mav 3 3 330 330 Adiustina Closing 7 8 330 Account: Insurance Expense Account No. 55 Post Balance Date Item Debit Credit Debit Credit

Ref. 2018 May 7 275 275 31 Adjusting 31 Closing 8 275 Account: Miscellaneous Expense Account No. 59 Date Pos t. Balance Debit Credit Item Debit Credit 2018 May 9 5 225 3 3 6 6 225 260 810 485 1.29 3 Closing 8 1.29 3. Kelly Consulting Unadjusted Trial Balance May 31, 2018 Account Debit Credit No. Balances Balances Cash 11 44,19 $8,08 Accounts Receivable 12 14 2,08 15 3,20 16 1,50 18 10,50 Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Office Equip. Accounts Payable Salaries Payable Unearned Fees 19 330 21 895 22 0 23 7,00 Common Stock 31 30,00 Retained Earnings 32 12,30 Dividends 33 10,50 Fees Earned 41 36,21

51 1,38 52 'O 53 0 Salary Expense Rent Expense Supplies Expense Depreciation Expense-Office Equipment Insurance Expense Miscellaneous Expense 54 0 55 0 59 1,29 86,73 86,73 5. Kelly Consulting End -of- Balance Adjustments Income Unadjusted Adjustments Trail Balance Statement Debi Cre Debi Cre Debi Cre Debi Cre Sheet Account Title Debi Cre Cash 44,1 44,1 44,1 Accounts 8.08 8.08 8.08 2,08 715 015 (B) (E) 1,60 1,60 Supplies Prepaid Rent 3,20 Prepaid Insurance 1,50 Office Equipment 14,5 Accum. Depr.– Accounts (A) 1,22 1,22 14,5 4,5 330 (C) 660 660 895 895 895 Payable Salaries Payable (D) 325 325 3,2 Unearned Fees 7,00 (F) 3,21 1 Common Stock 30,0 30,0 30,0 Retained 12,3 12,3 02,3

Earnings 10, Dividends 10,5 10,5 5 Fees Earned 36,2 (F) 40,0 40,0 1,38 1,70 (D) (E) (B) 1,70 1,60 Salary Expense Rent Expense Supplies Expense Depr. Exp.-Office 1,60 1,37 1,37 (C) 330 330 Insurance Expense (A) 275 275 Miscellaneous 1,29 1,29 1,29 86,7 86,7 7,69 7,69 87,3 87,3 40,0 80,8 47,3 6,57 33,4 Net income 33,4 40,0 40,0 80,8 80,8 6. Date Post. Debit Credit 2018 May 3 55 275 Adjusting Entries Insurance Expense Prepaid Insurance Insurance expired. 16 275 53 1,37 3 Supplies Expense Supplies Supplies used ($2,085 - $715). 14 1,37 54 330 3 Depreciation Expense-Office Equip. Accum. Depreciation-Office Equip. 19 330

Equipment depreciation. 51 325 3 Salary Expense Salaries Payable Accrued salaries. 22 325 3 52 1,60 Rent Expense Prepaid Rent Rent expired. 15 1,60 3 23 3,79 41 3,79 Unearned Fees Fees Earned Unearned fees ($7,000 - $3,210). 7. Kelly Consulting Adjusted Trial Balance May 31, 2018 Accoun t Debit Credit No. Balances Balances Cash 11 44,19 Accounts Receivable 12 8,08 14 715 15 1,60 1,22 16 18 14,50 Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation-Office Equip. Accounts Payable Salaries Payable Unearned Fees 19 660 21 895 22 325) 23 3,21

Common Stock 31 30,00 Retained Earnings 32 12,30 Dividends 33 10,50 Fees Earned 41 40,00 51 1,70 52 1,60 53 1,37 Salary Expense Rent Expense Supplies Expense Depreciation Expense-Office Equipment Insurance Expense Miscellaneous Expense 54 330 55 275 59 1,29 87,39 87,39 8. Kelly Consulting Income Statement Fees earned $40,00 $1,70 1,60 Expenses: Salary expense Rent expense Supplies expense Depreciation expense-office equipment Insurance expense Miscellaneous expense 1,37 330 275 1,29 Total expenses 6,57 Net income $33,42 9. Kelly

Consulting Retained Earnings Statement Retained earnings, May 1, 2018 $12,30 Net income $ Dividends 310,30 Change in retained earnings Retained earnings, May 31, 2018 22,92 $33,22 Kelly Consulting Balance Sheet Assets Current assets: Cash $44,19 Accounts receivable 8,08 715 1,60 1,22 $55,81 Supplies Prepaid rent Prepaid insurance Total current assets Property, plant, and equipment: Office equipment Accum. depreciation-office equipment Total property, plant, and equipment $14,50 (66 13,84 Total assets $09,65 Liabilities Current liabilities: Accounts payable Salaries payable Unearned fees 325 3,21 Total liabilities $

Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $30,00 35,22 65,22 $59,65 10. Journal Date Post. Debit Credit 2018 Closing Entries May 3 Fees Earned 41 40,00 Income Summary 34 40,00 3 34 6,57 51 1,70 52 1,60 Income Summary Salary Expense Rent Expense Supplies Expense Depreciation Expense-Office Equip. Insurance Expense Miscellaneous Expense 53 1,37 54 330 55 275 59 1,29 13 34 33,42 Income Summary Retained Earnings 32 33,42 13 32 10,50 Retained Earnings Dividends 33 10,50 Kelly Consulting Post-Closing Trial Balance

Accoun t Debit Credit Balance Balance No. S S Cash 11 44,19 Accounts Receivable 12 8,08 14 715 15 1,60 16 1,22 18 14,50 Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Office Equipment Accounts Payable Salaries Payable Unearned Fees 19 660 21 895 22 325 23 3,21 Common Stock 31 30,00 Retained Earnings 32 35,22 70,31 70,31