Question

The following information applies to the questions displayed below) at January 1 (beginning of its fiscal year), Conover, Inc., a financial services consulting firm, reported the following account balances in thousands of dollars, except number of shares and par value per shares $ $ Cash Short-term investments Accounts receivable Supplies Prepaid expenses Office equipment Accumulated depreciation office equipment 1.970 Accounts payable 480 Uneamed revenue 3,640 Salaries Payable 220 Short-term note payable 4,790 Common stock $1 par value 1600 Additional paid in capital (410) Retained earnings 280 1390 940 850 120 6,630 2080 a. Received $9.570 cash for consulting services rendered b. Issued 11,400 additional shares of common stock at a market price of $155 per share. c. Purchased $710 of equipment, paying 20 percent in cash and owing the rest on a short tennote d. Received $960 from clients for consulting Services to be performed in the next year. e. Bought $540 of supplies on account 1. Incurred and paid $1,870 in utilities for the current year g. Consulted for clients in the current year for fees totaling $1,690, due from clients in the next yeat. h. Received $3,050 from clients paying on their accounts 1. Incurred $6.280 in salaries in the current year, paying $5.370 and owing the rest (to be paid next year) J. Purchased $1.300 in short term investments and paid $870 for insurance coverage beginning in the next fiscal year, k. Received $45 in interest revenue earned in the current year on short-term investments vale

Answer 1

Solution: Part 1: Transaction Account title cash consulting fees revneue Credit Debit 9570 a 9570 b 1767 cash=11400*155/1000 common stock=11400*1/1000 Additional paid in captial 11 1756 C 710 office equipment cash=710*0.20 short term note payable 142 568 d 960 cash unearned revenue 960 e 540 supplies accounts payable 540 f 1870 utilities expense cash 1870 8 1690 account receivable consulting fees revneue 1690 h 3050 cash account receivable 3050 6280 salaries expense cash salaries payable 5370 910 j short term investments prepaid expense cash 1300 870 2170 k 45 cash Interest revenue 45

Part 2: Beg. Bal short term investments Beg. Bal 4801 j 1300 a Cash 1970 9570 1767 960 3050 45 1420 1870 f 53700 2170 End bal b b d h k 1780 End bal 7810 Beg. Bal 8 Account receivable 3640 3050 h 1690 Beg. Bal e supplies 220 540 End bal 2280 End bal 760 Prepaid expense 4790 870 Beg. Bal j Beg. Bal office equipment 1600 710 с End bal 5660 End bal 2310 Accumulated depreciation Beg. Bal 410 Beg. Bal accounts payable 280 540 e End bal 410 End bal 820 Beg. Bal Unearned revenue 1390 960 d Beg. Bal salaries payable 940 910 i End bal 2350 End bal 1850 short term note payable Beg. Bal 850 Beg. Bal common stock 120 11 b 568 C End bal 1418 End bal 131

Additional paid in capital Beg. Bal 6630 1756 b retained earnings 2080 Beg. Bal End bal 8386 End bal 2080 Interest revenue Beg. Bal Consulting fees revenue Beg. Bal 9570 a 16908 End bal 11260 45k End bal 45 salaries expense Utilities expense Beg. Bal i Beg. Bal f 6280 1870 End bal 6280 End bal 1870

Part 3: Revenues Assets 11305 Expense 20190 = Liabilites 8150 = Net income 6438 = stockholder equity 3155 13752 working: Revneue Consulting fees revenue Interest revenue 11260 45 11305 Expenses salaries expense Utilities expense 6280 1870 8150 Assets Cash short term investments Account receivable supplies Prepaid expense office equipment Accumulated depreciation 7810 1780 2280 760 5660 2310 -410 20190 Liabilities accounts payable Unearned revenue salaries payable short term note payable 820 2350 1850 1418 6438 stockholder equity common stock Additional paid in capital retained earnings Net income 131 8386 2080 3155 13752