5. Case Study #4- Journal Entries and Closing Problem (Full case study #4 is due at the end of week 9. Only Requirements 1, 2, 3, and 4 are due at the end of week 7.) Yes - there are three weeks allowed to complete this case study.

Journal Entries and Closing Problem (Case Study #4): Global Requirements for Journal Entries and Closing Problem: 1. 2. 3. 4. 5. 6. 7. 8. 9. Read all of the instructions below first before attempting this problem. There is a journal entries ledger required. There is an account ledger required. There is an adjusted trial balance required. There is an income statement required. There is a statement owner's equity There is a balance sheet required. There is post closing trial balance required. All of the items above need to be titled. A sample title of the journal entry ledger would be as follows: Diamond Consulting Journal Entry Ledger For the Month of July 2015 Requirements for Journal Entries and Closing Problem: 1. Journalize each transaction in a two column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited: (This should be your record/ledger of journal entries.) Account Number 11 12 14 15 16 18 19 21 22 23 31 32 41 51 52 53 54 55 59 Account Name Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Deprecation Accounts Payable Salaries Payable Unearned Fees Steffy Lopez, Capital Steffy Lopez, Drawing Fees Earned Salary Expense Rent Expense Supplies Expense Depreciation Expense Insurance Expense Miscellaneous Expense 2. Post the journal to a ledger. This should be your record of each account and the transaction occurring within each account - similar to a T account or a T account format can be utilized. 3. Prepare an unadjusted trial balance. 4. At the end of July, the following adjustment data were assembled. Analyze and use the following data to complete parts (5) and (6). a. Insurance expired during July is $375. b. Supplies on hand on July 31 is $175. c. Deprecation of office equipment for July is $750. d. Accrued receptionist salary on July 31 is $175. e. Rent expired during July is $2,400. f. Unearned fees on July 31 are $2,750. 5. Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet. 6. Journalize and post the adjusting entries within the ledger for each account (See requirement 2 above) and also post the adjusting entries on the journal entries listing (See requirement 1 above.) 7. Prepare an adjusted trial balance. 8. Prepare an income statement, statement of owner's equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries within the ledger for each account (See requirement 2 above) and also post the adjusting entries on the journal entries listing (See Requirement 1 above.) 10. Prepare a post-closing trial balance. Journal Entries and Closing Problem: For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2015, Steffy decided to move to rented quarter and to operate the business, which was to be known as Diamond Consulting, on a full-time basis, Diamond Consulting entered into the following transactions during July: As of July 1: The following assets were received from Steffy Lopez: Account Cash Accounts Receivable Supplies Office Equipment No liabilities received Amount $13,500 $20,800 $3,200 $7,500 The following items occurred during the month of July: Date Durin g July 1 2 4 5 Transaction Detail Paid two months' rent on lease rental contract, $4,800. Paid the premiums on property and casualty insurance policies, $4,500. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500. Purchased additional office equipment on account from Office Station Co., $6,500. 6 10 12 12 14 17 18 20 24 26 27 29 31 31 31 31 Received cash from clients on account, $15,300. Paid cash for a newspaper advertisement, $400. Paid Office Station Co. for part of the debt incurred on July 5, $5,200. Recorded services provided on account for the period July 1 - 12, $13,300. Paid receptionist for two weeks' salary, $1,750. Recorded cash from cash clients for fees earned during the period July 1 - 17, $9,450. Paid cash for supplies, $600. Recorded services provided on account for the period July 13 - 20, $6,650. Recorded cash from cash clients for fees earned for the period July 17 - 24, $4,000. Received cash from clients on account, $12,000. Paid receptionist for two weeks' salary, $1,750. Paid telephone bill for July, $325. Paid electricity bill for July, $675. Recorded cash from cash clients for fees earned for the period July 25 - 31, $5,200. Recorded services provided on account for the remainder of July, $3,000. Steffy withdrew $12,500 for personal use. Diamond Consulting Journal Entry Ledger For the month of July 2015 Debit Credit 7/1 Cash 13,500 A/R 20,800 Supplies 3,200 Office Equip. 7,500 Steffy Lopez Cap. Prepaid Rent 45,000 4800 Cash 4,800 7/2 Prepaid Ins. 4,500 Cash 4,500 7/4 Cash 4,500 Unearned Fees 4,500 7/5 Office Equip 6,500 A/P 6,500 7/6 Cash 15,300 A/R 15,300 7/10 Misc. Exp 400 Cash 400 7/12 A/P 5,200 Cash 5,200 7/12 A/R 13,300 Fees Earned 13,300 7/14 Salary Exp 1,750 Cash 1,750 7/17 Cash 9,450 Fees Earned 9,450 7/18 Supplies 600 Cash 600 7/20 A/R 6,650 Fees Earned 6,650 7/24 Cash 4,000 Fees Earned 4,000 7/26 Cash 12,000 A/R 12,000 7/27 Salary Exp 1,750 Cash 1,750 7/29 Misc Exp 325 Cash 325 7/31 Misc Exp 675 Cash 675 7/31 Cash 5,200 Fees Earned 5,200 7/31 A/R 3.000 Fees Earned 3,000 7/31 Steffy Lopez, Drawing Cash 12,500 12,500 Diamond Consulting Journal Ledger For the Month of July 2015 Cash Debit Credit 7/1 Steffy Lopez Capital 13,500 7/1 Prepaid Rent 4,800 7/6 A/R 15,300 7/2 Prepaid Ins 4,500 7/9 Unearned Fees 4,500 7/10 Misc. Exp 400 7/17 Fees Earned 9,450 7/12 A/P 7/24 Fees Earned 4,000 7/14 Salary Exp 7/26 A/R 7/31 Fees Earned 12,000 5,200 63,950 5,200 7/18 Supplies 1,750 600 7/27 Salary Exp 1,750 7/29 Misc Exp 325 7/31 Misc Exp 675 7/31 Drawing 12,500 Balance 31,450