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Casado and Associates Bookkeeping Services- Process one complete accounting cycle Mariana Casado has bookkeeping business that provides bookkeeping services for small and medium businesses in

Casado and Associates Bookkeeping Services- Process one complete accounting cycle

Mariana Casado has bookkeeping business that provides bookkeeping services for small and medium businesses in the south Puget Sound area. In addition to managing and working in her business, she also hires two employees: another accountant (YOU) and an office manager.

The business rents a big office in a strip mall in Lakewood. They hire out a cleaning service to keep the office clean, and they pay rent for their office space. They depreciate all office equipment and furniture. This business used the Allowance for Doubtful Accounts method to manage their receivables.

This business is a sole proprietorship. The post-closing trial balance for the bookkeeping business is as follows on December 31st, 2020:

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As the accountant hired by Ms. Casado, you need keep the books for the bookkeeping business. You will do that by performing the following tasks:

  1. Journalize all January 2021 transactions
  2. Post the transactions to the general ledger accounts
  3. Prepare the Trial Balance for January 2021 on the worksheet
  4. Record the following end of the month adjustments:

Adjusting Entries

Adjust the supplies account. An end of the period count (January 31st) shows the business has $3,650 of supplies on hand

Record the adjustment for insurance expense for the month of January

Record the rent expense for January in the amount of $4,000

Record the furniture and depreciation expense for January in the amount of $250

Write off A/R in the amount of $2,400 (allowance method)

Replenish The Allowance for doubtful accounts, so its balance is $3,000

Accrued 3,600 in wages January

  1. Journalize and post the closing entries
  2. Complete all columns of the worksheet provided for this project
  3. Prepare the Income Statement for the month of January
  4. Prepare the Statement of Owners equity for the month of January
  5. Prepare the Balance Sheet for the month of January
  6. Prepare a post-closing trial balance

January Transactions

January day

Transaction

4

Purchased a 1-year insurance policy for $6,240 with check# 234

4

Purchased supplies for $5,600. Issued check # 235

6

Collected $3,800 on account from credit customers

7

Returned damaged supplies in the amount of $530

8

Sold 6-months bookkeeping services for $32,600 to Antonia's Diner. Of this amount, the client paid $10,000 with check# 598, and CASADO issued credit for the remainder. Work has not yet been performed.

9

CASADO performed bookkeeping services to Antonia's Diner in the amount of $12,000

11

Bought radio slots from KIRO to advertise services locally, on account, for 2,780

12

Prepared a batch of 1099s for a construction client. The service cost $4,900, of which $2,000 was paid by the customer with a check (#1002), and the remainder was put on account

12

Collected $7,300 on account from credit customers

14

Issued check# 236 to pay for the office cleaning in the amount of $1,050

15

Received a monthly telephone bill for $340

18

Sold bookkeeping services for $3,050, of which $2,000 was immediately collected.

19

Purchased Supplies for $4,300 with check# 237

20

Collected $3,000 on account from credit customers

20

Sold $13,560 in tax prep services that will be concluded in January. On account.

21

Purchased newspaper space for advertising on account for $2,500

22

Collected $3,600 on account

22

Purchased supplies for $490. Received an invoice.

25

Issued check# 238 to pay for utilities in the amount of $890

26

Sold tax preparation services for $2,600, of which everything has been collected.

26

Purchased one additional computer for $380 on account

27

Prepared a batch of 1099s for a bakery chain client. Services were provided for $6,400 on account

27

Issued check# 238 to pay for supplies in the amount of $ 350

28

Collected $8,900 from clients on account

28

Issued check #238 to pay for maintenance services for January $680

29

Issued checks #239 and #240 to cover payroll. These checks total $10,600

29

Issued check# 241 for an owner's withdraw in the amount if $10,000

29

Purchased a new set of office furniture for $1,350 on credit.

29

Expensed one month of insurance

29

Paid bills in the amount of $4,360 using check#242

29

Sold services for $3,600, of which $1,500 was paid.

Account Name Dec 31st Balances Dr. Cr. 227,107 6,530 327 1,030 Cash in Bank Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Prepaid Rent Furniture and equipment Accumulated depreciation FF&E Accounts Payable Wages Payable Unearned Revenue- Antonia CASADO, Capital Total 4,000 12,650 2,300 5,600 2,500 240,590 251,317 251,317 Account Name Dec 31st Balances Dr. Cr. 227,107 6,530 327 1,030 Cash in Bank Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Prepaid Rent Furniture and equipment Accumulated depreciation FF&E Accounts Payable Wages Payable Unearned Revenue- Antonia CASADO, Capital Total 4,000 12,650 2,300 5,600 2,500 240,590 251,317 251,317

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