Comprehensive Problem

The chart of accounts for Kelly Consulting is as follows.

11 Cash	31 Kelly Pitney, Capital
12 Accounts Receivable	32 Kelly Pitney, Drawing
14 Supplies	33 Income Summary
15 Prepaid Rent	41 Fees Earned
16 Prepaid Insurance	51 Salary Expense
18 Office Equipment	52 Rent Expense
19 Accumulated Depreciation	53 Supplies Expense
21 Accounts Payable	54 Depreciation Expense
22 Salaries Payable	55 Insurance Expense
23 Unearned Fees	59 Miscellaneous Expense

Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2015. The accounting cycle for Kelly Consulting for April, including financial statements, is listed above. During May, Kelly Consulting entered into the following transactions.

May

3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $3,550.

5. Received cash from clients on account, $3,100.

9. Paid cash for a newspaper advertisement, $150.

13. Paid Office Station Co. for part of the debt incurred on April 5, $200

15. Recorded services provided on account for the period May 1-15, $5,350.

16. Paid part-time receptionist for two weeks salary including the amount owed on April 30, $850. Record the following transaction on Page 6 of the journal.

17. Recorded cash from cash clients for fees earned during the period May 1-16, $5,000.

20. Purchased supplies on account, $1,500.

21. Recorded services provided on account for the period May 16-20, $12,175

25. Recorded cash from cash clients for fees earned for the period May 17-23, $2,125.

27. Received cash from clients on account, $5,250. 28. Paid part-time receptionist for two weeks salary, $850.

30. Paid telephone bill for May, $330.

31. Paid electricity bill for May, $290.

31. Recorded cash from cash clients for fees earned for the period May 26-31, $5,500.

31. Recorded services provided on account for the remainder of May, $4,950.

31. Kelly withdrew $7,000 for personal use.

Instructions

1. The chart of accounts for Kelly Consulting is shown on page 1, and the post-closing trial balance as of April 30, 2015, is shown on page 3. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2015, and place a check mark in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consultings chart of accounts. (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.

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

a. Insurance expired during May is 300.

b. Supplies on hand on May 31 are $200.

c. Depreciation of office equipment for May is $300.

d. Accrued receptionist salary on May 31 is $450.

e. Rent expired during May is $2,000. f. Unearned fees on May 31 are $2,500.

5. Enter the unadjusted trial balance on an end-of period spreadsheet (work sheet) and complete the spreadsheet.

6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal.

7. Prepare an adjusted trial balance.

8. Prepare an income statement, a statement of owners equity, and a balance sheet.

9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.

10. Prepare a post-closing trial balance.

Kelly Consulting

Post -Closing Trial Balance

30-Apr-15

Debit Balances

Credit Balances

11 Cash

20,000

12 Accounts Receivable

3,400

14 Supplies

3,450

15 Prepaid Rent

3,200

16 Prepaid Insurance

1,500

18 Office Equipment

14,500

19 Accum Depreciation

330

21 Accounts Payable

8,000

22 Salaries Payable

3,000

23 Unearned Fees

2,500

31 Kelly Pitney, Capital

32,220

46,050

46,050

If zero, OK

0

If red, you are out of balance

0

11	Account no	Cash				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
12	Account no	Account Receivable				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
14	Account no	Supplies				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
15	Account no	Prepaid Rent				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
16	Account no	Prepaid Insurance				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
18	Account no	Office Equipment				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
19	Account no	Accumulated Depreciation				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
21	Account no	Accounts Payable				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
22	Account no	Salaries Payable				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
23	Account no	Unearned Fees				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
31	Account no	Kelly Pitney, Capital				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
32	Account no	Kelly Pitney, Drawing				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance				0	0
						0	0
						0	0
						0	0
						0	0
						0	0
						0	0
						0	0
33	Account no	Income Summary				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
41	Account no	Fees Earned				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
51	Account no	Salary Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
52	Account no	Rent Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
53	Account no	Supplies Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
54	Account no	Depreciation Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
55	Account no	Insurance Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
59	Account no	Miscellaneous Expense				Balance
	Date	Description	Ref #	Debit	Credit	Debit	Credit
	30-Apr	Beginning Balance
	Reconciling totals			0	0	0	0
	Warning	Green OK			0		0
		Red - You are out of balance			0		0

Monthly Journal Entries
		Debit	Credit
Date	Description

Kelley Consulting

Worksheet

For the Month Ended May 31, 2010

Unadjusted Trial Balance

Adjustments

Adjusted Trial Balance

Income Statement

Balance Sheet

Account Title

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

Debit

Credit

11 Cash

12 Accounts Receivable

14 Supplies

15 Prepaid Rent

16 Prepaid Insurance

18 Office Equipment

19 Accum Depreciation

21 Accounts Payable

22 Salaries Payable

23 Unearned Fees

31 Alperco, Capital

32 Alperco, Drawing

33 Income Summary

41 Fees Earned

51 Salary Expense

52 Rent Expense

53 Supplies Expense

54 Depreciation Expense

55 Insurance Expense

59 Miscellaneous Expense

Totals

0

0

0

0

0

0

0

0

0

0

Net Income (Loss)

Reconciling Totals

0

0

0

0

0

0

Warnings

Green - OK

0

0

0

0

0

Red - You are out of balance

0

0

0

0

0

Closing Journal Entries
		Debit	Credit
Date	Description
Income Statement Balance Sheet

Adjusting Journal Entries
		Debit	Credit
Date	Description