2.1. Company Background Information Williams Tax Service The Mid-Term Problem covers a monthly accounting cycle for Williams Tax Service, a sole proprietorship which is owned by John Williams. The business operations began on January 1, 2021. Williams Tax Service is a service organization and is located at 123 South Main Street in Graham, North Carolina. The company employs one employee, a receptionist/bookkeeper, Margaret Simmons, who is paid semi-monthly. Williams Tax Service rents the building they operate in and prepaid $12,000 for twelve months rent on January 1, 2021. Rent expense is allocated monthly. They also prepaid $6,000 for a twelve-month insurance policy on January 1, 2021, and allocate insurance expense monthly for expired insurance. To help in the operations of the business, Williams Tax Service purchased $15,000 worth of equipment on January 1, 2021 which will be depreciated over five years (60 months) at $250 per month. Williams Tax Service accepts both cash and credit (on account) from their clients, and have some clients who wish to pay in advance for their services (unearned fees). These fees are taken into Fees Earned as they are earned. Williams Tax Service prepares monthly financial statements, including the Income Statement, the Statement of Owner's Equity, and a Classified Balance Sheet. These statements are distributed internally as well as to outside users such as creditors and clients. A chart of accounts for Williams Tax Service is given, along with a post-closing trial balance for March 30, 2021. You will use the Excel template provided in Chapter 4 of this booklet to complete the activities for the month of April. The general ledger includes beginning balances for April. There is a sample gradesheet in Chapter 3 which will give you a breakdown of the points. If you have any questions on how to complete this problem, contact your instructor. This problem should help you to understand the accounting cycle and how accounting works. Have fun!