CPAs is a regional Public Accounting Firm. The four partners are all accounting graduates of ----. The firm has approximately 12 employees and offers services in audit, tax, and consulting.

The company maintains its financial records manually primarily with the use of Excel. The accounting records consist of a general journal, general ledger and a subsidiary ledger for Accounts Receivable. All journal entries are posted daily.

CPAs fiscal year-end is December 31. Adjusting entries are made at the end of every month. Assume all revenue and expense accounts are closed out monthly. The trial balance from September 1, 2016 is:

CPAs completed the following transactions during September 2016. All entries need to be entered in the general journal.

Date Transaction

9/1 Made a purchase of $2,000 supplies on account.

9/1 Paid $12,000 for a one year insurance policy. Coverage starts today.

9/1 Borrowed $15,000 from the bank. Interest rate is 6%. Interest is paid quarterly and the note will be paid back in full in two years.

9/1 Paid $10,000 cash for the purchase of 5 new laptops for employees.

9/10 Billed clients $20,000 for work performed since 9/1.

a. $11,000 to JJ Co.

b. $9,000 to Star Co.

9/12 Received a deposit of $18,000 toward future work to be performed for EN² Inc. EN² Inc. is a new customer.

9/15 Collected $12,000 from clients previously billed.

a. $8,000 from Roxie Inc.

b. $4,000 from Star Co.

9/15 Paid employee salaries of $15,000 for the work performed in the first two weeks of the month.

A.Include employer payroll taxes due of 10% of salaries.

9/18 Paid $2,000 for marketing expense incurred during September.

9/20 Paid $3,000 rent for the month of September.

9/22 Collected $9,000 from clients previously billed.

a. $6,000 from Daulton Co.

b. $3,000 from JJ Co.

9/25 Paid payroll taxes accrued on 9/15.

9/28 Billed customers $35,000 for services performed in September.

a. $10,000 Daulton

b. $15,000 Roxie

c. $10,000 Star Co.

Part 2:

Prepare the following adjusting journal entries in proper format in the general journal:

1. Accrued Salaries amounted to $14,000 for the work performed in December but not yet paid.

a. Employer payroll taxes are 10% of salaries.

2. Interest on the Note Payable

3. Depreciation on the computers, furniture and equipment.

a. All items (pre-existing items and new items purchased) have a 3 year life with no salvage value.

b. Depreciation is recorded monthly.

c. Computers, furniture and equipment as of 9/1 were purchased on January 1, 2015.

4. Supplies on hand at 9/30 was determined to be $500.

5. Record insurance expense for the month.

6. Amounts to be billed to customers for services performed prior to 9/30 but not yet billed are:

a. JJ Company - $5,000

b. Daulton Inc. - $4,000

7. Performed services of $6,000 during September for EN² Inc.

8. Assume the income tax rate is 35%

Debit S 18,000 Acct No. Account Name Credit 101 Cash 102 Accounts Receivable 103 Allowance for Uncollectible Accounts 104 Office Supplies 105 Prepaid Insurance 106Computers, Furniture and Equipment 107 Accumulated Depreciation- C, F and E 201 Accounts Payable 202Interest Payable 203 Payroll Tax Payable 204 Salaries Pavable 205 Income Taxes Pavable 206Notes Payable - Long Term 301 Common Stock, 5000 shares issued, no par 302 Retained Earnings 401 Services Revenue 501 Bad Debt Expense 502 Marketing and Selling Expense 503Rent Expense 504 Salaries Expense 505 Pavroll Tax Expense 506Interest Expense 507 Depreciation Expense 508 Supplies Expense 509 Income Tax Expense 510Insurance Expense 2,000 2,000 45,000 25,000 1,000 55,000 4,000 87,000$ 87,000