Continuing Problem

PS Music's chart of accounts and the balance of accounts as of July 1, 20Y5 (all normal balances). are as follows: Instructions 1. Enter the July 1, 20Y5, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31,20Y5. 2. Net Income: The unadjusted trial balance of PS Music as of July 31, 20Y5, along with the adjustment data for $4,955 the two months ended July 31, 20Y5, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared: Instructions 1. (Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet. 2. Prepare an income statement, a statement of stockholders' equity, and a balance sheet. 3. Journalize and post the closing entries. The retained eamings account is 032 in the ledger of pS Music. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 4. Prepare a post-closing trial balance. The transactions completed by PS Music during June 20 Y 5 were described at the end of Chapter 1 . The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional imvestment in PS Music in exchange for common stock by depositing $5,000 in P5 Music's checking account. 1. Instead of continuing to share office space with a local real estate agency. Peyton decided to rent office space near a local music store. Pald rent for July, $1,750. 1. Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received $1,000 on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of \$3,600. Any additional hours beyond 80 will be billed to KXMO at $40 per hour. In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months. 3. Paid $250 on account. 4. Paid an attorney $900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense) 5. Purchased office equipment on account from Office Mart, $7,500. 8. Paid for a newspaper advertisement, $200. 11. Received $1,000 for serving as a disc jockey for a party. 13. Paid $700 to a local audio electronics store for rental of digital recording equipment. 14. Paid wages of $1,200 to receptionist and part-time assistant. Enter tbe following transactions on Page 2 of the tuo-column journat: 16. Received $2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, \$850. 21. Paid $620 to Upload Music for use of its current music demos in making various music sets. 22. Paid $800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for $2,500. Received $750, with the remainder due August 4, 20 Y 5. 27. Paid electric bill, $915. 28. Paid wages of $1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, $40. 30. Served as a disc jockey for a charity ball for $1,500. Received $500, with the remainder due on August 9 , 20 Ys. 31. Received $3,000 for serving as a disc jockey for a party. 31. Paid $1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Paid dividends, $1,250. (Continued) 3. Total of Debit column: $42,340 The unadjusted trial balance that you prepared for PS Music at the end of Chapter 2 should appear as follows: The data needed to determine adjustments are as follows: - During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. For information on the amount of the accrued revenue to be billed to KXMD, see the contract described in the July 3 transaction at the end of Chapter 2. - Supplies on hand at July 31,$275. - The balance of the prepaid insurance account relates to the July 1 transaction at the end of Chapter 2. - Depreciation of the office equipment is $50. - The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3 transaction at the end of Chapter 2. - Accrued wages as of July 31 were $140. Instructions 1. Prepare adjusting journal entries. You will need the following additional accounts: 18 Accumulated Depreciation-Office Equipment 22 Wages Payable 57 Insurance Expense 58 Depreciation Expense 2. Post the adjusting entries, inserting balances in the accounts affected. 3. Prepare an adjusted trial balance. Comprehensive Problem 1 A. Net income. $33,425 8 axtitrerstt Kelly Pitney began her consulting business, Kelly Consulting on April 1, 20v8. The accounthes oxcle for Kelly Consulting for Apeil, including finandal statements, was illistrated in this chypter Daing May, Kelly Consulting entered into the following transoctions: May 7 . Pecehed cast hom dients as an advance parment for nervices to be provided and recoided at as unearned feres 5 soo. 5. Recehred cain from clients on accoumt, 52.850. 9. Paid caila for a newspoper xdvertisement, 5225 . 11. Paid Office Seiben Co for part of the debt incarjed on April 5, S640. 15. Recoeded services provided on account for the period May 1-15, 59, 180. 17. Heconded canh from cath elents for Sers earned during the period May 1-14, 5s.358: Necond ibe following trantaxction on Aage 6 of the journal. xa. Rurchased nupplies on accedunt, 5735 . 21. Reconded services provided on account for the peciod May 16-20,\$4.820 is. Recoeded cath from cashidients for fees earned for the perlod May 1721,57,000. 27. Hecelwed cash from clents on accosant, 59,520 . 28. Paid part time receptionist for pwo weeto' salex, 3750. 30. Paid teleghone bill fot Mry, 5260 31. Paid electricity bill for May, sato. 31. Recorded cash from cash clents for fees earned for the period Mry 26-31, 53,300 . 31. Recorded services provided on account for the remainder of Nar, 52650. 31. Pald dividends 5 thistoo. Instructions 1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the pose-cloaing trul balance as of April 30,20V8, is shown in Exhibit 17. For each account in the post-chering trial balance, enter the balance in the appropriate Balance column of a four-column accoune. Date the balances May 1, 20Y8, and place a check mark (S) in the Posting Reference column. Journalize each of the May transactions in a rwo-column journal starting on Page. 5 of the joumal and using Kelly Consulting's chart of accounts. (Do not insert the account number in the fournal at this time.) 2. Post the journal to a ledger of four-column accounts 3. Prepare an unadfusted 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 expered during May is $275. (b) Supplies on hand on May 31 ares 575 . (c) Depreciarian of office equipment for May is 5330. (d) Accreed receptionist salary on May 31 is 5325 . (e) Rent expired during May is $1,600. (f) Uhearned fees on May 31 are \$3,210. 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadiheet and complete. the spreadsheet. 6. Journalize and post the adjusting entries. Pecord the adjusting entries on Page 7 of the joumal 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of stockholders' equity, and a bulance shert: 9. Prepare and post the clasing entries, Record the closing entries on Page 8 of the journal. Indicate closed accounts by inserting a line in both the Balance columas opposite the closing entry: 10. Prepare a post-closing trial balance