At June 30, 2017, the end of its most recent fiscal year, Grouper Computer Consultants post-closing trial balance was as follows: Credit Debit $4,500 1,030 590 Cash Accounts receivable Supplies Accounts payable Unearned service revenue Common stock Retained earnings $340 960 3,100 1,720 $6,120 $6,120 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Grouper conducted the following transactions during July 2017, and adjusts its accounts monthly. July 1 2 3 3 6 9 10 Purchased equipment, paying $3,200 cash and signing a 2-year note payable for $17,200. The equipment has a 4- year useful life. The note has a 6% interest rate which is payable on the first day of each following month. Issued 17,200 shares of common stock for $43,000 cash. Paid $3,000 cash for a 12-month insurance policy effective July 1. Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $3,400 per month. Paid $3,300 for supplies. Visited client offices and agreed on the terms of a consulting project. Grouper will bill the client, Connor Productions, on the 20th of each month for services performed. Collected $1,030 cash on account from Milani Brothers. This client was billed in June when Grouper performed the service. Performed services for Fitzgerald Enterprises. This client paid $960 in advance last month. All services relating to this payment are now completed. Paid $340 cash for a utility bill. This related to June utilities that were accrued at the end of June. Met with a new client, Thunder Bay Technologies. Received $10,300 cash in advance for future services to be performed Paid semi-monthly salaries for $9,500. Performed services worth $24,100 on account and billed customers. Received a bill for $1,900 for advertising services received during July. The amount is not due until August 15. Performed the first phase of the project for Thunder Bay Technologies. Recognized $3,600 of revenue from the cash advance received July 16. Received $12,900 cash from customers billed on July 20. 13 14 16 18 20 20 23 27 Adjustment data: 1. 2. 3. 4. 5. Adjustment of prepaid insurance. Adjustment of prepaid rent. Supplies used $1,100 Equipment depreciation, $425 per month. Accrual of interest on note payable. Salaries for the second half of July, $9,500, to be paid on August 1. Estimated utilities expense for July $690 (invoice will be received in August). Income tax for July, $1,030, will be paid in August. 6. 7. 8. Post to the ledger accounts. (Post entries in the order of journal entries presented in the previous part.) Cash July 1 Bal. 4,500 Accounts Receivable July 1 Ball 1.030 Prepaid Insurance Supplies July 1 bal. 590 Prepaid Rent Equipment Accounts Payable July 1 Bal. 340 Unearned Service Revenue July 1 Bal. 960 Notes Payable Common Stock July 1 Bal. 3.100 Retained Earnings July 1 Bal. 1,720 Service Revenue