During August 20x1, the Kinsey Consultants LLC accounting records needed the following year-end adjustments: 1) The Prepaid Insurance account had an August 1 beginning balance of $2,000 and $8,000 of premium payments were recorded during August. The unexpired insurance relating to future periods on August 31" $4,000. 2) Supplies on hand at August 31 $2,500 3) Building depreciation for the entire year $15,000 Equipment depreciation is the remaining book value 4) Pepsi Company paid a $15,000 retainer on August 29th for future advisory services. Amount has not been recorded to the accounting records. 5) Kinsey's weekly salaries and wages of $12,000 is for a 6-day workweek ending on Saturday September 2nd. Wages will be paid on September 4th. The weekly salaries and wages have not been recorded for the last week of August. 6) Berger consulting revenue earned not invoiced to client on Aug. 31st. $13,000 7) Kinsey collected Dickens previously billed consulting balance due $55,000 B) Kinsey completed a portion of Johnson's prepaid advisory contract $5,000 9) On August 31* Kinsey received $20,000 payment on the Notes Receivable. 10) Kinsey paid rent due on copier equipment $1,000 Instructions: 1) Record each business transaction to the General Journal Template using proper journal entry structure including a brief entry explanation on the line after the journal entry. Leave a line space between each journal entry. 2) Post the General Journal entries to the appropriate General Ledger accounts Template. Maintain a running balance for each General Ledger account. 3) Prepare an Adjusted Trial Balance as of August 31, 20x1. 4) Determine Kinsey Consulting's Net Operating Income (Loss) for August 31, 20X1. Provide your answer in the box on the bottom of the Adjusted Trial Balance Template. Show your calculations. 5) Briefly explain the Matching Principle and its importance. Kinsey Consultants LLC uses the accrual method of accounting, not the cash method of accounting, and recognizes revenue and expenses using the Matching Principle. On August 31, 20x1, Kinsey Consultants' Unadjusted Trial Balance was as follows: KINSEY CONSULTANTS LLC Unadjusted Trial Balance August 31, 20x1 108,000 79,000 40,000 12,000 10,000 330,000 75,000 28,000 Cash Accounts Receivable Notes Receivable Supplies Prepaid Insurance Building Accumulated Depreciation - Building Equipment Accumulated Depreciation - Equipment Accounts Payable Salaries & Wages Payable Unearned Consulting Revenue Notes Payable Kinsey Capital Consulting Revenue Wage Expense Rent Expense Supplies Expense Insurance Expense Utilities Expense Depreciation Expense Miscellaneous Expenses 22,000 15,000 15,000 10,000 55,000 375,000 325,000 175,000 22,000 13,000 28,000 35,000 12,000 TOTALS $ 892,000 $ 892,000
