At June 30, 2020, the end of its most recent fiscal year, Novak Computer Consultants' post-closing trial balance was as follows: Debit Credit Cash $4,920 Accounts receivable 1.130 Supplies 650 Accounts payable $380 Unearned service revenue 1.050 Owner's capital 5,270 $6,700 $6,700 July 1 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Novak conducted the following transactions during July 2020, and adjusts its accounts monthly. Purchased equipment, paying $4.000 cash and signing a 2-year note payable for $18,800. 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. Owner invested $47,000 cash in the company. 3 Paid $3,600 cash for a 12-month insurance policy effective July 1. Paid the first 2 (July and August 2020) months' rent for an annual lease of office space for $3,800 per month Paid $3,600 for supplies Visited client offices and agreed on the terms of a consulting project. Novak will bill the client, Connor Productions, on the 20th of each month for services performed. Collected $1,130 cash on account from Milani Brothers. This client was billed in June when Novak performed the service. Performed services for Fitzgerald Enterprises. This client paid $1,050 in advance last month. All services relating to this payment are now completed. Paid $380 cash for a utility bill. This related to June utilities that were accrued at the end of June. 3 6 9 10 13 14 16 18 20 20 Met with a new client, Thunder Bay Technologies. Received $11,300 cash in advance for future services to be performed. Paid semi-monthly salaries for $10,300. Performed services worth $26,300 on account and billed customers. Received a bill for $2,100 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 $9,400 of revenue from the cash advance received July 16. Received $14,100 cash from customers billed on July 20. 23 27 Adjustment data: 1. 2. 3. 4. 5. 6. 7. 8. Adjustment of prepaid insurance. Adjustment of prepaid rent. Supplies used, $1,200 Equipment depreciation, $475 per month. Accrual of interest on note payable. Salaries for the second half of July, $10,300, to be paid on August 1. Estimated utilities expense for July, $750 (invoice will be received in August). Income tax for July, $1,130, will be paid in August. (a) Enter the July 1 balances in the ledger accounts. (Post entries in the order displayed in the problem statement.) Cash Accounts Receivable Supplies Accounts Payable Unearned Service Revenue Owner's Capital