Complete Accounting Cycle Please complete Part 1 AND Part 2 PART 1 For the past several years, Steffy Lopez has operated a part time consulting business from his home As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full time basis Diamond Consulting entered into the following transactions during July Jul 1 The following assets were received from Steffy Lopez in exchange for common stock cash, $13,500 accounts receivable, $20,800 supplies, $3,200 and office equipment, $7,500 There were no liabilities received 1 Paid two months rent on a lease rental contract, $4,800 2 Paid the annual premiums on property and casualty insurance policies, $4,500 4 Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500 5 Purchased additional office equipment on account from Office Station Co , $6,500 6 Received cash from clients on account, $15,300 10 Paid cash for a newspaper advertisement, $400 12 Paid Office Station Co for part of the debt incurred on July 5, $5,200 12 Recorded services provided on account for the period July 112, $13,300 14 Paid receptionist for two weeks salary, $1,750 Record the following transactions on Page 2 of the journal Jul 17 Recorded cash from cash clients for fees earned during the period July 117, $9,450 18 Paid cash for supplies, $600 20 Recorded services provided on account for the period July 1320, $6,650 24 Recorded cash from cash clients for fees earned for the period July 1724, $4,000 26 Received cash from clients on account, $12,000 27 Paid receptionist for two weeks salary, $1,750 29 Paid telephone bill for July, $325 31 Paid electricity bill for July, $675 31 Recorded cash from cash clients for fees earned for the period July 2531, $5,200 31 Recorded services provided on account for the remainder of July, $3,000 31 Paid dividends, $12,500 Required 1 Journalize each transaction in a two column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited (Do not insert the account numbers in the journal at this time ) 2 Post the journal to a ledger of four column accounts 3 Prepare an unadjusted trial balance If an amount box does not require an entry, leave it blank 4 At the end of July, the following adjustment data were assembled Analyze and use these data to complete requirements (5) and (6) A Insurance expired during July is $375 B Supplies on hand on July 31 are $1,525 C Depreciation of office equipment for July is $750 D Accrued receptionist salary on July 31 is $175 E Rent expired during July is $2,400 F Unearned fees on July 31 are $2,750 5 A Journalize the adjusting entries on page 3 of the journal Adjusting entries are recorded on July 31 Refer to the Chart of Accounts for exact wording of account titles B Post the adjusting entries, inserting balances in the accounts affected 7 Prepare an adjusted trial balance If an amount box does not require an entry, leave it blank PART 2 For the past several years, Steffy Lopez has operated a part time consulting business from his home As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full time basis Diamond Consulting entered into transactions during July In Part 1 of this problem, the accounting cycle was completed up through the preparation of the adjusted trial balance Required 8 A From Part 1, use the adjusted trial balance figures to prepare an income statement for the month ended July 31, 2018 Be sure to complete the statement heading If a net loss has been incurred, enter that amount as a negative number using a minus sign Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries You will not need to enter colons ( ) on the income statement B From Part 1, use the adjusted trial balance figures to prepare a retained earnings statement for the month ended July 31, 2018 Be sure to complete the statement heading Negative amount should be indicated by the minus sign Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries If an amount is zero, enter 0 C From Part 1, use the adjusted trial balance figures to prepare a balance sheet as of July 31, 2018 Be sure to complete the statement heading Fixed assets must be entered in order according to account number Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries You will not need to enter colons ( ) on the balance sheet they will automatically insert where necessary Negative amount should be indicated by the minus sign 9 A Journalize the closing entries on page 4 of the journal Closing entries are recorded on July 31 Refer to the Chart of Accounts for exact wording of account titles Prepare a post closing trial balance Chart of Accounts CHART OF ACCOUNTS Diamond Consulting General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent EXPENSES 51 Salary Expense 52 Rent Expense 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense LIABILITIES 59 Miscellaneous Expense 21 Accounts Payable 22 Salaries Payable Chart of Accounts 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary Adjusted Trial Balance Shaded cells have feedback X 7 Prepare an adjusted trial balance If an amount box does not require an entry leave it blank Question not attempted Diamond Consulting Score 0 80 ADJUSTED TRIAL BALANCE July 31, 2018 ACCOUNT TITLE DEBIT CREDIT Cash Accounts Receivable Supplies Prepaid Rent Shaded cells have fe Adjusted Trial Balance 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation 8 Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 16 Gloon Adjusted Trial Balance 14 Fees zarned Shaded cells have 15 Salary Expense 16 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals Points Chart of Accounts CHART OF ACCOUNTS Diamond Consulting General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 14 Supplies EXPENSES 15 Prepaid Rent 51 Salary Expense 52 Rent Expense 16 Prepaid Insurance 18 Office Equipment 53 Supplies Expense Anni Chart of Accounts 19 Accumulated Depreciation 54 Depreciation Expense 55 Insurance Expense LIABILITIES 59 Miscellaneous Expense 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary Labels and Amount Descriptions Labels Current assets Current liabilities Expenses For the Month Ended July 31, 2018 July 31, 2018 Property, plant, and equipment Amount Descriptions Change in retained earnings Net income Net loss Retained earnings, July 1, 2018 Labels and Amount Descriptions Change in retained earnings Net income Net loss Retained earnings, July 1, 2018 Retained earnings, July 31, 2018 Total assets Total current assets Total expenses Total liabilities Total liabilities and stockholders' equity Total property, plant, and equipment Total stockholders' equity Income Statement Diamond Consulting Income Statement (Label) 2 Label) Diamond Consulting Retained Earnings Statement (Label) Balance Sheet Diamond Consulting Balance Sheet (Label) Assets 2 (Label) (Label) Balance Sheet Liabilities 15 (Label) Stockholders' Equity Post closing Trial Balance July 31, 2018 ACCOUNT TITLE DEBIT CREDIT Cash 2 Accounts Receivable Supplies Prepaid Rent 5 Prepaid Insurance Office Equipment Accumulated Depreciation 8 Accounts Payable Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Totals

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 16, 2024

Complete Accounting Cycle Please complete Part 1 AND Part 2 PART 1 For the past several years, Steffy Lopez has operated a part-time consulting business

Complete Accounting Cycle

Please complete Part 1 AND Part 2

PART 1

For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July:

Jul.	1	The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received.
	1	Paid two months rent on a lease rental contract, $4,800.
	2	Paid the annual premiums on property and casualty insurance policies, $4,500.
	4	Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500.
	5	Purchased additional office equipment on account from Office Station Co., $6,500.
	6	Received cash from clients on account, $15,300.
	10	Paid cash for a newspaper advertisement, $400.
	12	Paid Office Station Co. for part of the debt incurred on July 5, $5,200.
	12	Recorded services provided on account for the period July 112, $13,300.
	14	Paid receptionist for two weeks salary, $1,750.

Record the following transactions on Page 2 of the journal:

Jul.	17	Recorded cash from cash clients for fees earned during the period July 117, $9,450.
	18	Paid cash for supplies, $600.
	20	Recorded services provided on account for the period July 1320, $6,650.
	24	Recorded cash from cash clients for fees earned for the period July 1724, $4,000.
	26	Received cash from clients on account, $12,000.
	27	Paid receptionist for two weeks salary, $1,750.
	29	Paid telephone bill for July, $325.
	31	Paid electricity bill for July, $675.
	31	Recorded cash from cash clients for fees earned for the period July 2531, $5,200.
	31	Recorded services provided on account for the remainder of July, $3,000.
	31	Paid dividends, $12,500.

Required:

Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)

Post the journal to a ledger of four-column accounts.

Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it blank.

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

A.	Insurance expired during July is $375.
B.	Supplies on hand on July 31 are $1,525.
C.	Depreciation of office equipment for July is $750.
D.	Accrued receptionist salary on July 31 is $175.
E.	Rent expired during July is $2,400.
F.	Unearned fees on July 31 are $2,750.

A.	Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the adjusting entries, inserting balances in the accounts affected.

Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

image text in transcribed

PART 2

Required:

A.	From Part 1, use the adjusted trial balance figures to prepare an income statement for the month ended July 31, 2018. Be sure to complete the statement heading. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons (:) on the income statement.
B.	From Part 1, use the adjusted trial balance figures to prepare a retained earnings statement for the month ended July 31, 2018. Be sure to complete the statement heading. Negative amount should be indicated by the minus sign. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If an amount is zero, enter "0".
C.	From Part 1, use the adjusted trial balance figures to prepare a balance sheet as of July 31, 2018. Be sure to complete the statement heading. Fixed assets must be entered in order according to account number. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons (:) on the balance sheet; they will automatically insert where necessary. Negative amount should be indicated by the minus sign.

A.	Journalize the closing entries on page 4 of the journal. Closing entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles.

Prepare a post-closing trial balance.

image text in transcribed

Chart of Accounts CHART OF ACCOUNTS Diamond Consulting General Ledger ASSETS REVENUE 41 Fees Earned 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent EXPENSES 51 Salary Expense 52 Rent Expense 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense LIABILITIES 59 Miscellaneous Expense 21 Accounts Payable 22 Salaries Payable Chart of Accounts 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary Adjusted Trial Balance Shaded cells have feedback. X 7. Prepare an adjusted trial balance. If an amount box does not require an entry leave it blank. Question not attempted. Diamond Consulting Score: 0/80 ADJUSTED TRIAL BALANCE July 31, 2018 ACCOUNT TITLE DEBIT CREDIT Cash Accounts Receivable Supplies Prepaid Rent Shaded cells have fe Adjusted Trial Balance 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation 8 Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 16 Gloon Adjusted Trial Balance 14 Fees zarned Shaded cells have 15 Salary Expense 16 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals Points: Chart of Accounts CHART OF ACCOUNTS Diamond Consulting General Ledger ASSETS REVENUE 11 Cash 41 Fees Earned 12 Accounts Receivable 14 Supplies EXPENSES 15 Prepaid Rent 51 Salary Expense 52 Rent Expense 16 Prepaid Insurance 18 Office Equipment 53 Supplies Expense Anni Chart of Accounts 19 Accumulated Depreciation 54 Depreciation Expense 55 Insurance Expense LIABILITIES 59 Miscellaneous Expense 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary Labels and Amount Descriptions Labels Current assets Current liabilities Expenses For the Month Ended July 31, 2018 July 31, 2018 Property, plant, and equipment Amount Descriptions Change in retained earnings Net income Net loss Retained earnings, July 1, 2018 Labels and Amount Descriptions Change in retained earnings Net income Net loss Retained earnings, July 1, 2018 Retained earnings, July 31, 2018 Total assets Total current assets Total expenses Total liabilities Total liabilities and stockholders' equity Total property, plant, and equipment Total stockholders' equity Income Statement Diamond Consulting Income Statement (Label) 2 Label) Diamond Consulting Retained Earnings Statement (Label) Balance Sheet Diamond Consulting Balance Sheet (Label) Assets 2 (Label) (Label) Balance Sheet Liabilities 15 (Label) Stockholders' Equity Post-closing Trial Balance July 31, 2018 ACCOUNT TITLE DEBIT CREDIT Cash 2 Accounts Receivable Supplies Prepaid Rent 5 Prepaid Insurance Office Equipment Accumulated Depreciation 8 Accounts Payable Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Totals