Complete Accounting Cycle

For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 20Y6, Jeff decided to move to rented quarters and to operate the business, which was to be known as Rosebud Consulting, on a full-time basis. Rosebud entered into the following transactions during April:

Apr. 1. The following assets were received from Jeff Horton in exchange for common stock: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. There were no liabilities received.

1. Paid three months rent on a lease rental contract, $6,000.

2. Paid the premiums on property and casualty insurance policies, $4,200.

4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400.

5 Purchased additional office equipment on account from Smith Office Supply Co., $8,000

6 Received cash from clients on account, $11,700.

10 Paid cash for a newspaper advertisement, $350.

12 Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400.

12 Recorded services provided on account for the period April 112, $21,900.

14 Paid receptionist for two weeks salary, $1,650.

Record the following transactions on Page 2 of the journal:

17 Recorded cash from cash clients for fees earned during the period April 116, $6,600.

18 Paid cash for supplies, $725.

20 Recorded services provided on account for the period April 1320, $16,800.

24 Recorded cash from cash clients for fees earned for the period April 1724, $4,450.

26 Received cash from clients on account, $26,500.

27 Paid receptionist for two weeks salary, $1,650.

29 Paid telephone bill for April, $540.

30 Paid electricity bill for April, $760.

30 Recorded cash from cash clients for fees earned for the period April 2530, $5,160.

30 Recorded services provided on account for the remainder of April, $2,590.

30 Paid dividends, $18,000.

Required:

1. Journalize each transaction in a two-column journal starting on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. If there is more than one entry on the same date, be sure to enter the transactions in the exact order as presented in the data. (Do not insert the account numbers in the journal at this time.) If an amount box does not require an entry, leave it blank.

11 Cash 31 Common Stock

12 Accounts Receivable 32 Retained Earnings

14 Supplies 33 Dividends

15 Prepaid Rent 41 Fees Earned

16 Prepaid Insurance 51 Salary Expense

18 Office Equipment 52 Supplies Expense

19 Accumulated Depreciation 53 Rent Expense

21 Accounts Payable 54 Depreciation Expense

22 Salaries Payable 55 Insurance Expense

23 Unearned Fees 59 Miscellaneous Expense

You will use the attached spreadsheet to complete several of the remaining parts of this problem. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

2. Post the transactions from part 1 to the general ledger in the attached spreadsheet. The posting must be in chronological order. Be sure to go back and enter the appropriate posting references in the journal.

3. In the spreadsheet, prepare an unadjusted trial balance.

4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during April is $350.

b. Supplies on hand on April 30 are $1,225.

c. Depreciation of office equipment for April is $400.

d. Accrued receptionist salary on April 30 is $275.

e. Rent expired during April is $2,000.

f. Unearned fees on April 30 are $2,350.

5. (Optional) In the spreadsheet, enter the unadjusted trial balance on the end-of-period worksheet and complete the worksheet.

6. Journalize the adjusting entries on Page 3 of the journal. (Do not insert the account numbers in the journal at this time.) Post the adjusting entries to the general ledger in the spreadsheet. The posting must be in chronological order. Then go back and enter the appropriate posting references in the journal.

7. In the spreadsheet, prepare the adjusted trial balance.

8. Prepare an income statement, a statement of stockholders equity, and a balance sheet. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

9. Journalize the closing entries on Page 4 of the journal. (Do not insert the account numbers in the journal at this time.) Post the closing entries to the general ledger in the spreadsheet. Then go back and enter the appropriate posting references in the journal. If an amount box does not require an entry, leave it blank.

10. Prepare a post-closing trial balance. List the accounts in order by type: Assets, Liabilities, Capital, Dividends, Revenue, and Expenses. If an amount box does not require an entry, leave it blank.