Question

4-8j: Comprehensive Problem 1 Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 20Y8. 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: Ma Received cash from clients as an advance payment for services to be provided and recorded it as uncared foes, $4.500 Received cash from clients on account, $2,450 1 Paid cash for a newspaper advertisement, $225. 13. Paid Office Station Co. for part of the debt incurred on April. 5640 15. Recorded services provided on account for the period May 1-15.59.180 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, 5750 17. Recorded cash from cash clients for fees earned during the period May 1-16, S8,360, Record the following transactions on Page 6 of the journal: po. purchased supplies on account, $735. Recorded services provided on account for the period May 16-20, S4,830 B. Recorded cash from cash clients for fees earned for the period May 17-23.57.900 27. Received cash from clients on account, 89,520 28. Paid part-time receptionist for two weeks' salary, 5750. po. paid telephone bill for May, $260. 1. Faid electricity bill for May, S810. 31. Recorded cash from cash clients for fees eamed for the period May 26-31, 53,300 31. Recorded services provided on account for the remainder of May, $2,650. 2.1. Paid 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, 20Y8, 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-column account. Date the balances May 1, 20Y8, and place a check mark (™) in the Posting Reference column. Journalize 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 journal at this time.) 2. Post the journal to a ledger of four-column accounts. 3. Prepare an unadjusted trial balance.

Answer 1

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

Dr. Debit in $ Credit in $ 6575 1705 Closing Enteries Date Particulars 31.5.2019 Income Summary a/c To Salary Expense To Rent Expense To Supplies Expense To Depreciation Expense To Insurance Expense To Miscellaneous Expense (Expense accounts closed) 1600 1370 330 275 1295 Dr. 40000 31.5.2019 Fees Earned a/c To Income Summary (Revenue accounts closed) 40000 Dr. 33425 31.5.2019 Income Summary a/c To Retained Earnings (Profits transferred) 33425 10500 31.5.2019 Retained Earnings a/c Dr. To Dividends (Cash withdrawn for personal use) 10500