Question

Instructions For the past several years, Stefty Lopez has operated a part-time consulting business from his home. As of July 1, 20Y2, Stetty decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond entered into the following transactions during July: Jul 1 The following assets were received from Stefty Lopez in exchange for common stock: cash, $12,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,000. There were no liabilities received. Paid two months' rent on a lease rental oontract, $4,800. Paid the premiums on property and casualty insurance policies, $4,880 4 Received cash from clients as an advanoe payment for services to be provided, and recorded it as uneamed fees, $5,500. 5 Purchased additional office equipment on account from Office Station Co., $6,500. 6 Received cash from clients on account, $15,100. 10 Paid cash for a newspaper advertisement, $400. 12 Paid Office Station Co. for part of the debt incurred on July 5, $5,200 12 Recorded services provided on aocount for the period July 1-12, $13,300. 14 Paid receptionist for two weeks' salary, $1,800. Record the following transactions on Page 2 of the journal Jul 17 Recorded cash from cash clients for fees earned during the period July 1-17, $9,450. 18 Paid cash for supplies, $600.

Answer 1

A B DE Journal Entries Date Account Titles Debit ($) Credit ($) 1-Jul Cash $12,500 Accounts Receivable $20.800 Supplies $3,200 Office Equipment $7,000 Common Stock $43,500 (To record the common stock issued) 1-Jul Prepaid Rent $4,800 Cash $4,800 (To record the rent paid in advance) 2-Jul Prepaid Insurance $4,860 Cash $4,860 (To record the insurance policy) 4-Jul Cash $5,500 Unearned Fees $5,500 (To record the advance received) Office Equipment $6,500 Accounts Payable $6,500 (To record the equipment purchased) 6-Jul Cash $15,100 Accounts Receivable $15,100 (To record the cash received from clients) 10-Jul Advertisement Expense $400 Cash $400 (To record the cash paid for advertisement) 12-Jul Accounts Payable $5,200 Cash $5.200 (To record the cash paid to suppliers) 12-Jul Accounts Receivable $13,300 Fees Earned $13,300 (To record the services provided) 14-Jul Salaries Expense $1,800 Cash $1,800 (To record the salaries paid)

Date $600 G H Journal Entries Account Titles Debit ($) Credit ($) 17-Jul Cash $9.450 Fees Earned $9.450 (To record the services provided) 18-Jul Supplies Cash $600 (To record the supplies purchased) 20-Jul Accounts Receivable $6,650 Fees Earned $6,650 (To record the services provided) 24-Jul Cash $5,300 Fees Earned $5,300 (To record the services provided) 26-Jul Cash $12,000 Accounts Receivable $12.000 (To record the cash received from clients) 27-Jul Salaries Expense $1,800 Cash $1,800 (To record the salaries paid) 29-Jul Telephone Expense $350 Cash $350 (To record the telephone expense) 31-Jul Electricity Expense $675 Cash $675 (To record the electricity expense) 31-Jul Cash $5,300 Fees Earned $5,300 (To record the services provided) 31-Jul Accounts Receivable $3,000 Fees Earned $3,000 (To record the services provided) 31-Jul Dividends $12,500 Cash $12,500 (To record the dividends paid)

Date b. c. Adjusting Journal Entries Account Titles Debit ($) Credit ($) Insurance Expense $405 Prepaid Insurance $405 (To record the insurance Expense) Supplies Expense Supplies (To record the supplies Expense) Depreciation Expense $750 Accumulated Depreciation $750 (To record the depreciaiton expense) Salaries Expense $180 Salaries Payable $180 (To record the salaries expense) Rent Expense $2,400 Prepaid Rent $2,400 (To record the rent expense) Unearned Fees $2,000 Fees Earned $2,000 (To record the fees earned) e. f.

I U V W X Y Z AA AB AC AD AE Unadjustment Adjusted Post Closing Income Balance Trial Balance Adjustments Trial Balance Trial Balance Statement Sheet Debit ($) Credit ($) Debit ($) Credit ($) Debit ($) Credit ($) Debit ($) Credit ($) Debit ($) Credit ($) Debit ($) Credit (S) $25,565 $25,565 $25,565 $25,565 $21.950 $21.950 $21,950 $21.950 $3,800 $1.550 $2,250 $2,250 $2,250 $4.800 $2,400 $2,400 $2.400 $2.400 $4,860 $405 $4,455 $4,455 $4,455 $13,500 $13,500 $13,500 $13.500 $750 $750 $1,300 $1,300 $1,300 $1.300 $5,500 $2,000 $3,500 $3,500 $3,500 $180 $180 $180 $43,500 $43,500 $43,500 $43,500 $750 $750 Account Titles 4 Cash 5 Accounts Receivable 6 Supplies 7 Prepaid Rent 8 Prepaid Insurance 9 Office Equipment 10 Accumulated Depreciation 11 Accounts Payable 12 Unearned Fees 13 Salaries Payable 14 Common Stock 15 Retained Earnings 16 Dividends 17 Fees Earned 18 Salaries Expense 19 Advertising Expense 20 Telephone Expense 21 Electricity Expense 22 Insurance Expense 23 Supplies Expense 24 Depreciation Expense 25 Rent Expense 26 Net Income 27 Total $12,500 $12,500 $12,500 $12,500 $41,700 $2,000 $43.700 $43.700 $43,700 $3,600 $180 $3,780 $3.780 $400 $400 $350 $675 $3,780 $400 $350 $675 $405 $1,550 $750 $2,400 $350 $675 $405 $1,550 $750 $2,400 $405 $1.550 $750 $2,400 $400 $350 $675 $405 $1,550 $750 $2.400 $33,390 $43,700 $92.000 $92.000 $7,285 $7,285 $92,930 $92,930 $92,930 $92,930 $43,700 $82,620 $33.390 $82,620

Date 1 Debit ($) Credit (S) $43,700 $43,700 2 $10,310 Closing Journal Entries Account Title Fees Earned Income Summary (To close Revenue) Income Summary Salaries Expense Advertising Expense Telephone Expense Electricity Expense Insurance Expense Supplies Expense Depreciation Expense Rent Expense (To close Expense) Income Summary Retained Earnings (To close the net income) Retained Earnings Dividends (To record the Dividends transfer) $3,780 $400 $350 $675 $405 $1,550 $750 $2,400 3 $33,390 $33,390 4 $12,500 $12,500

W Adjustments Debit ($) Credit ($) Credit ($) Unadjustment Trial Balance Debit ($) =12500-4800-4860+5500+15100-400-5200-1800+9450-600+4000+12000-1800-350-675-12500 =20800-15100+13300+6650-12000+5300+3000 =3200+600 =4800 =4860 =7000+6500 1550 2400 405 750 1=6500-5200 =5500 180 =12500+20800+3200+7000 Account Titles 4 Cash 5 Accounts Receivable 6 Supplies 7 Prepaid Rent 8 Prepaid Insurance 9 Office Equipment 10 Accumulated Depreciation 11 Accounts Payable 12 Unearned Fees 13 Salaries Payable 14 Common Stock 15 Retained Earnings 16 Dividends 17 Fees Earned 18 Salaries Expense 19 Advertising Expense 20 Telephone Expense 21 Electricity Expense 22 Insurance Expense 23 Supplies Expense 24 Depreciation Expense 25 Rent Expense 26 Net Income 27 Total =12500 =13300+9450+6650+4000+5300+3000 2000 =1800+1800 =400 350 675 550 2400 =SUM(T4:T26) =SUM(U4:26) =SUM(V4:V26)e-SUM(W4:W26)

AB AC AD AE Income Statement Balance Sheet AA Post Closing Trial Balance Debit ($) Credit ($) =X4 =X5 =X6 Debit ($) Credit ($) Debit ($) Credit ($) T=X6 Y Adjusted Trial Balance Debit ($) Credit ($) =T4+V4-W4 =T5+V5-W5 =T6+V6-W6 =T7+V7-W7 =T8+V8-W8 =T9+V9-W9 =U10+W10-V10 =U11+W11-V11 =U12+W12-V12 =U13+W13-V13 =U14+W14-V14 I=X7 =X8 =X8 =X9 J=X9 =Y10 =Y11 =Y12 =Y13 =Y14 =Y10 =Y11 =Y12 =Y13 =Y14 3 Account Titles 4. Cash 5 Accounts Receivable 6 Supplies 7 Prepaid Rent 8 Prepaid Insurance 9 Office Equipment 10 Accumulated Depreciation 11 Accounts Payable 12 Unearned Fees 13 Salaries Payable 14 Common Stock 15 Retained Earnings 16 Dividends 17 Fees Earned 18 Salaries Expense 19 Advertising Expense 20 Telephone Expense 21 Electricity Expense 22 Insurance Expense 23 Supplies Expense 24 Depreciation Expense 25 Rent Expense 26 Net Income 27 Total =T16+V16-W16 =Z16 =U17+W17-V17 =T18+V18-W18 =T19+V19-W19 =T20+V20-W20 =T21+V21-W21 =T22+V22-W22 =T23+V23-W23 =T24+V24-W24 =T25+V25-W25 =X16 =Y17 =Y17 1=X18 =Z18 =X19 =Z19 =X20 =Z20 =X21 =Z21 =X22 =Z22 =X23 =Z23 =X24 =Z24 =X25 =Z25 =AC17-SUMAB18:AB25) =SUM(Z4-Z26) =SUMAA4:AA26) I=SUMAB4:AB26) I=SUM(AC4:AC26 =AB26 =SUMAD4-AD26/CESUMAE4:AE26 =SUM(X4-X26) =SUM(Y4:Y26)