At June 30, 2022, the end of its most recent fiscal year, Blue Spruce Computer Consultants' post-closing trial balance was as follows: Debit Credit Cash $5.180 Accounts receivable 1,270 Supplies 740 Accounts payable $420 Unearned service revenue 1.140 Common stock 3,280 Retained earnings 2,350 $7,190 $7,190 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Blue Spruce conducted the following transactions during July 2022, and adjusts its accounts monthly. July 1 Purchased equipment, paying $4,000 cash and signing a 2-year note payable for $20,000. 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. 2. Issued 19,000 shares of common stock for $47,500 cash. 3 Paid $3,240 cash for a 12-month insurance policy effective July 1. 3 Paid the first 2 (July and August 2022) months' rent for an annual lease of office space for $4,200 per month. 6 Paid $3,500 for supplies. 9 Visited client offices and agreed on the terms of a consulting project. Blue Spruce will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,270 cash on account from Milani Brothers. This client was billed in June when Blue Spruce performed the service. 13 Performed services for Fitzgerald Enterprises. This client paid $1,140 in advance last month. All services relating to this payment are now completed. 14 Paid $420 cash for a utility bill. This related to June utilities that were accrued at the end of June. 9 Visited client offices and agreed on the terms of a consulting project. Blue Spruce will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,270 cash on account from Milani Brothers. This client was billed in June when Blue Spruce performed the service. 13 Performed services for Fitzgerald Enterprises. This client paid $1,140 in advance last month. All services relating to this payment are now completed. 14 Paid $420 cash for a utility bill. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $11,100 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $10,600. 20 Performed services worth $25,600 on account and billed customers. 20 Received a bill for $2,400 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,300 of revenue from the cash advance received July 16. 27 Received $14,600 cash from customers billed on July 20. The chart of accounts for Blue Spruce Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation-Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, and Utilities Expense. Cash July 1 Bal. 5,180 + 4 Accounts Receivable July 1 Bal. 1,270 Prepaid Insurance Supplies July 1 bal. 740 Prepaid Rent Equipment Accounts Payable 4 July 1 Bal. 420 Unearned Service Revenue July 1 Bal. 1,140 Notes Payable Common Stock July 1 Bal. 3,280 4 4 Retained Earnings July 1 Bal. 2,350 July 31 Bal. 2,350 Service Revenue + . + + Common Stock July 1 Bal. 3,280 Retained Earnings July 1 Bal. 2,350 July 31 Bal. 2,350 Service Revenue 2 Salaries and Wages Expense Advertising Expense 4
