Question

At June 30, 2017, the end of its most recent fiscal year Green River Computer Consultants post-closing trial balance was as follows: Credit Cash Debit $5.230 1.200 Accounts receivable Supplies 690 Accounts payable $400 1.120 Unearned service revenue Common stock 3.600 Retained earnings 2.000 $7.120 57,120 The company underwent a major expansion in July, New staff was hired and more financing was obtained, Green River conducted the following transactions during July 2017, and adjusts its accounts monthly July 1Purchased equipment paying $4.000 cash and signing a 2-year note payable for $20.000. The equipment has a 4-year useful life. The note hasa 6% interest rate which is payable on the first day of each following month 2. Issued 20,000 shares of common stock for $50,000 cash 3 Paid $3.600 cash for a 12-month insurance policy effective July 1. 3 Paid the first 2 Ouly and August 2017) months' rent for an annual lease of office space for $4000 per month 6 Paid $3.800 for supplies Visited dient offices and agreed on the terms of a consulting project. Green River will bill the client. Connor Productions on the 20th of each month for services performed 10 Collected $1.200 cash on account from Milani Brothers. This client was biled in June when Green River performed the service Performed services for Enterprises. This dient paid $1.120 in advance last month All services relating to this payment are now completed 14 Paid $400 cash for a utility bill. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $12.000 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $11,000 20 Performed services worth $28.000 on account and billed customers. 20 Received a bill for $2.200 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,000 of revenue from the cash advance received July 16. 27 Received $15,000 cash from customers billed on July 20

Answer 1

39120 Statement of Income For the Month ending 31.7.2017 Service Revenue Less: Salaries Expense Advertising Expense Insurance Expense Rent Expense Supplies Expense Depreciation Expense Interest Expense Utilities Expense 22000 2200 300 4000 1250 500 100 800 31150 7970 -1200 6770 Income Tax Expense Net Income Statement of Retained Earnings For the Month ending 31.7.2017 Beginning Balance Net Income 2000 6770 8770

Amounts in $ Amounts in $ Balance sheet As at 31.7.2017 Assets Amounts in $ Amounts in $ Liabilities Current Assets Current Liabilities Cash 56630 Accounts Payable Accounts Receivable 13000 Unearned Service Revenue Supplies 3240 Interest Payable Prepaid Insurance 3300 76170 Salaries Payable Income Tax Payable Non Current Assets Equipment 24000 Non Current Liabilities Accum. Depre - Equip. -500 23500 Note Payable 3000 2000 100 11000 1200 17300 20000 Shareholders Equity Common stock Retained Earnings 99670 Total Liabilities & Shareholders Eq. 53600 8770 62370 99670 Total Assets

Dr. Closing Enteries Date Particulars 31.7.2017 Income Summary a/c To Salaries Expense To Advertising Expense To Insurance Expense To Rent Expense To Supplies Expense To Depreciation Expense To Interest Expense To Utilities Expense To Income Tax Expense (Expense accounts closed) Debit in $ Credit in $ 32350 22000 2200 300 4000 1250 500 100 800 1200 Dr. 39120 31.7.2017 Service Revenue a/c To Income Summary (Revenue accounts closed) 39120 Dr. 6770 31.7.2017 Income Summary a/c To Retained Earnings (Profits transferred) 6770