Base your answers to questions 10 through 15 on the following information:

The Mid-Valley Accounting Agency, owned and operated by Jeffery Thomas, organized for business on January 1, 20XX. It's assumed, in this problem, that 11 months have elapsed since the company began operations, and that the January 1 through November 30 transactions have been entered in the journal and posted to the ledger.

The company's chart of accounts is as follows:

MID-VALLEY ACCOUNTING AGENCY Chart of Accounts

Current Assets(100-199)

100 Cash

101 Marketable Securities

110 Accounts Receivable

111 Notes Receivable

112 Interest Receivable

120 Prepaid Insurance

121 Prepaid Rent

122 Prepaid Advertising

130 Office Supplies

131 Accounting Supplies

Fixed Assets(200-299)

200 Office Furniture

201 Accumulated DepreciationOffice Furniture

210 Office Machines

211 Accumulated DepreciationOffice Machines

220 Land

Current Liabilities(300-399)

300 Accounts Payable

301 Notes Payable

310 Salaries Payable

320 Interest Payable

Owner's Equity(500-599)

500 Jeffery Thomas, Capital

501 Jeffery Thomas, Drawing

550 Income Summary

Revenue(600-699)

600 Fee Income

610 Interest Income

Expenses(700-799)

700 Salaries Expense

701 Rent Expense

702 Advertising Expense

703 Utilities Expense

704 Office Supplies Expense

705 Accounting Supplies Expense

706 Depreciation ExpenseOffice Furniture

707 Depreciation ExpenseOffice Machines

708 Telephone Expense

709 Miscellaneous Expense

710 Insurance Expense

720 Interest Expense 1

000 Expense and Revenue Summary

An unadjusted trial balance was prepared from the ledger accounts on November 30, as follows:

MID-VALLEY ACCOUNTING AGENCY Trial Balance November 30, 20XX

Cash $ 7,200

Marketable Securities 4,000

Accounts Receivable 4,285

Notes Receivable 2,500

Prepaid Insurance 2,700

Prepaid Rent 100

Office Supplies 275

Accounting Supplies 320

Office Furniture 2,400

Accumulated DepreciationOffice Furniture $ 220

Office Machines 3,600

Accumulated DepreciationOffice Machines 330

Accounts Payable 2,250

Notes Payable 2,000

Jeffery Thomas, Capital 10,000

Jeffery Thomas, Drawing 3,500

Fee Income 35,295

Interest Income 40

Salaries Expense 15,200

Rent Expense 1,100

Advertising Expense 900

Utilities Expense 650

Depreciation ExpenseOffice Furniture 220

Depreciation ExpenseOffice Machines 330

Telephone Expense 430

Miscellaneous Expense 425

$50,135 $50,135

The following transactions took place during the month of December:

Dec. 1 Contracted with the local newspaper for three months of advertising and paid in full the total fee of $600.

1 Purchased additional office supplies on account, $45.

2 Billed the Hughes Body and Fender Shop for services rendered, $150.

3 Paid $700 on account for office equipment purchased in June.

3 Received $320 cash for services rendered.

4 Jeffery Thomas withdrew $250 from the business for his personal use.

5 Received a check for $30 representing interest due on marketable securities.

5 Received a bill from Steno Services Company for outside clerical service performed, $35. Charge is to be recorded as a miscellaneous expense of doing business.

8 Paid telephone expense of $55.

9 Received $270 from clients on account.

9 Billed the Vingsen Modeling Agency for services rendered, $300.

10 Paid an electric bill in full, $85. 1

11 Purchased a tract of land for $6,000 by issuing a note payable for $4,000 and paying the balance in cash.

11 Accepted a 90-day $1,000 note receivable from the Stansbury Manufacturing Company for services performed.

12 Purchased accounting supplies on account, $100.

15 Paid semimonthly salaries of $690.

16 Received $400 cash for services performed.

18 Billed the Coleman Coal Company for work performed, $220.

18 Paid creditors in full for office supplies purchased on December 1 and accounting supplies purchased on December 12.

19 Received $125 from clients on account.

19 Paid miscellaneous expenses of $15.

22 Invested another $1,000 in high-grade marketable securities.

23 Paid for advertisement presented on radio station WALX, $95.

23 Received a check from the Hughes Body and Fender Shop for $150, payment on account.

26 Received $175 cash for work performed.

29 Paid miscellaneous expenses of $40. 30 Paid semimonthly salaries of $690.

30 Wrote off $100 of prepaid rent as of November 30 to rent expense for December.

Additional data (ADJUSTING ENTRIES):

a. Accrued interest on notes payable was $10 as of December 31, 20XX.

b. One month's advertising was expended in accordance with the agreement made with the newspaper on December 1.

c. Office supplies on hand were determined to be $75 as of December 31.

d. Salaries earned but not yet paid amounted to $45 on December 31.

e. Accrued interest on notes receivable was $30 as of December 31.

f. Accounting supplies on hand were determined to be $210 as of December 31.

g. Unexpired insurance premiums amounted to $1,800 as of December 31.

h. Depreciation on office furniture and office machines was determined to be $20 and $30, respectively, for the month of December.

REQUIRED: 1. Journalize the December transactions (omit explanations). 2. Post the journal entry amounts to the ledger accounts. Complete questions 10 through 15.

10. On December 26, cash in the amount of $175 was received for work performed. When you record this transaction in the General Journal, to which account should the credit entry be made?

A. Cash

B. Accounts Payable

C. Interest Income

D. Fee Income

11. What is the correct adjusting entry for the expired insurance premium as of December 31?

A. Insurance Expense 1,800 Prepaid Insurance 1,800

B. Prepaid Insurance 1,800 Insurance Expense 1,800

C. Insurance Expense 900 Prepaid Insurance 900

D. Prepaid Insurance 900 Insurance Expense 900

12. What is the net income for the Mid-Valley Accounting Agency for the year ended December 31, 20XX?

A. $13,440.

B. $14,105.

C. $15,240.

D. $16,350.

13. The balance in the Cash account, as shown on the work sheet in the Balance Sheet debit column, is

A. $4,305.

B. $3,895.

C. $2,995.

D. $2,305.

14. The balance in the Fee Income account, as shown on the work sheet in the Income Statement credit column, is

A. $35,295.

B. $37,685.

C. $37,860.

D. $38,130.

15. From the information on the work sheet, determine what the balance in the Jeffery Thomas, Capital account would be if a post-closing trial balance is prepared as of December 31, 20XX.

A. $21,490

B. $15,185

C. $10,000

D. $6,250