Comprehensive Problem: Making Paper Music Company

Complete the following comprehensive problem by following the accounting cycle with the exception of the worksheet. The working papers are attached and should be used to complete this problem.

Making Paper Music Company

Owner: Chris Brown

Chart of Accounts as of July 1, 2014

11 Cash $5,310

12 Accounts Receivable $1,250

14 Supplies $170

15 Prepaid Insurance $0

17 Office Equipment $0

18 Accumulated Depreciation $0

21 Accounts Payable $250

22 Wages Payable $0

23 Unearned Revenue $0

31 Chris Brown, Capital $5,000

32 Chris Brown, Drawing $500

41 Fees Earned $6,650

50 Wages Expense $400

51 Office Rent Expense $750

52 Equipment Rental Expense $700

53 Utilities Expense $300

54 Music Expense $1,590

55 Advertising Expense $450

56 Supplies Expense $180

57 Legal Expenses $0

58 Insurance Expense $0

59 Miscellaneous Expense $300

60 Depreciation Expense $0

*Accounts PayableMega Music Caf is the vendor the $250 is owed to

*Accounts Receivable-- Wiz Kalefa is the customers name that owes the $1250

Post the beginning balances shown in the Chart of Accounts above in the ledgers.

Journalize and post the following transactions:

July 1: Chris Brown made an additional investment in the Making Paper Music Company by depositing $4,000 in the bank.

July 1: Procured office space near a local music store and paid the rent for July of $1,800.

July 1: Prepaid a one year insurance policy to State Farm for $2700.

July 2: Received a check from Wiz Khalifa for payment on his account, $1250.

July 3: Chris Brown signed a contract with Local Artist radio station to provide guest spots for the next three months. The contract requires Chris to provide services for 80 hours per month for $3600 (per month) and any additional hours over 80 are billed at $40 per hour.

July 3: Chris Brown receives an advance payment from Local Artist radio station in the amount of $7200 pertaining to the contract signed.

July 3: Wrote a check to Mega Music Caf for the amount owed

July 4: Met with an attorney to have the contract with Local Artist Radio reviewed and paid the legal fees in full--$800

July 5: Purchased office equipment from Office Depot for $6,000 and placed on account

July 8: Paid the Atlanta Journal Constitution $200 for an advertisement in the Sunday paper

July 11: Received $900 cash for singing at a party

July 13: Paid $600 to Capricorn Records to rent some studio equipment

July 14: Paid Lil Wayne $1,200 for assisting with parties and recording

July 16: Received $1200 for singing at a party

July 18: Purchased supplies from Office Depot on account $1080

July 21: Paid $620 to Digital Music for the use of music demos

July 22: Paid $800 to Jam Time Radio Station to advertise the services of Making Paper Music Company twice daily for the remainder of the month

July 23: Sang at a party for Sean Combs and charged $2500. $750 was paid in cash on the spot and the remainder was billed in an invoice

July 27: Paid $760 to Georgia Power for the electric bill

July 28: Paid wages of $1200 to Lil Wayne for assisting with parties and recording

July 29: Paid $370 in various miscellaneous expenses

July 30: Sang at Missy Elliots Charity Ball and charged $1800. $400 was paid in cash on the spot and the remainder was billed in an invoice

July 31: Received $2800 for singing at a party

July 31: Paid $1400 in royalties to Motown Music for the use of others music

July 31: Chris Brown withdrew $1500 for personal bills

Prepare an Unadjusted Trial Balance for July 31, 2014

Journalize and post the following adjusting entries as of July 31, 2014

Record the accrued revenues of $1600

Supplies on hand at the end of the month $400

Adjust the prepaid insurance account for one month

Record the depreciation for the Office Equipment $75

Adjust the unearned revenue account for one month of revenues earned from Local Artist Radio

Record the accrued wages, to Lil Wayne, of $170

Prepare an Income Statement, Statement of Owners Equity, and a Balance Sheet as of July 31, 2014

Journalize and post the closing entries

Prepare a Post-Closing Trial Balance