Lena Kuznetsova provides coaching and mentoring services to individuals and companies. She operates the business as a proprietorship, under the name LVK Coaching Services, which has a December 31 year end. On November 30, 2021, the company?s general ledger included the following accounts (all accounts have normal balances):

December transactions were as follows:

Dec. 1 Paid December rent on her office space, $525.

1 Purchased additional equipment with a manufacturer?s suggested price of $3,270. After negotiations with the retailer, paid $1,270 cash and signed a note payable for $2,000.

4 Collected $1,880 from customers in payment of their accounts.

7 Paid the $308 monthly insurance premium.

8 Purchased $135 of supplies on account.

10 Paid $2,140 of the accounts payable from November.

12 Finished a coaching contract with a client for $765. The client had paid her in November.In November, Lena had recorded the $765 as a liability, Unearned Revenue. By finishing the coaching contract, she has ?paid? this obligation.

20 Received $3,480 cash from clients for services provided in December.

21 Paid office expenses of $115.

24 Withdrew $2,860 for personal use.

28 Billed clients $2,280 for coaching services provided in December. These clients will pay in January.

29 Received $560 cash advance from a client for a coaching contract that will start in January.

30 Paid part-time offi ce assistant $655 cash.

31 Made a $170 payment on the note payable. Of this amount, $10 is interest and the remainder is a principal payment on the note payable.

Instructions

a. Using T accounts, enter the November 30 balances in the ledger accounts.

b. Journalize the December transactions.

c. Post the December journal entries to the T accounts. Add new accounts if needed.

d. Prepare a trial balance at December 31, 2021.

Taking it further

Comment on the company?s cash balance. What concerns and suggestions do you have for the company to consider in January?

Transcribed Image Text:

Accounts payable Accounts receivable Advertising expense Cash Equipment Insurance expense L. Kuznetsova, capital $ 4,245 2,110 1,265 3,165 17,730 3,388 19,300 L. Kuznetsova, drawings Rent expense Salaries expense Service revenue $31,190 5,775 6,310 47,963 1,340 765 Supplies Unearned revenue