Extra Credit Opportunity

Instructions:

Enter the beginning account balances into the General Ledger.

Analyze each transaction and record it in the General Journal. You do not need to include explanations in your journal entries.

Post the transactions to the General Ledger.

Prepare the adjusting entries in the General Journal.

Compute and record the adjustment for supplies used during the month. An inventory taken on January 31^st showed supplies of $4200 on hand.

Compute and record the adjustment for expired insurance for the month.

Record the adjustment for one month of expired rent of $4000.

Record the adjustment for depreciation of $183 on the old equipment for the month. The first adjustment for the new equipment will be recorded in February.

Post the adjusting entries in the General Ledger.

Prepare the Income Statement.

Prepare the Statement of Owners Equity.

Prepare the classified Balance Sheet.

Journalize and post the closing entries.

Beginning Balances:

Debit Credit

Cash $111,350

Accounts Receivable $5,000

Supplies $1,000

Prepaid Rent $4,000

Equipment $11,000

Accumulated Depreciation-Equip. $183

Accounts Payable $3,500

Carolyn Wells, Capital $128,667

Transactions:

January 2, 2016 Purchased supplies for $6,000 cash

January 2, 2016 Purchased a one-year insurance policy for $7,200 cash

January 7, 2016 Sold services for $20,000 in cash and $4,000 on credit

January 12, 2016 Collected a total of $4,000 on account from credit customers

January 12, 2016 Paid $3,200 cash to pay for special promotional advertising

January 13, 2016 Collected a total of $3,500 on account from credit customers

January 14, 2016 Returned supplies that were damaged for a cash refund of $650

January 15, 2016 Sold services for $20,700 in cash and $2,300 on credit

January 20, 2016 Purchased supplies for $4,600 on credit

January 20, 2016 Sold services for $12,500 in cash and $3,350 on credit

January 20, 2016 Collected a total of $4,500 on account from credit customers

January 21, 2016 Paid $6,075 cash to pay for maintenance work on office equipment

January 22, 2016 Paid $3,200 cash for special promotional advertising

January 23, 2016 Paid the monthly phone bill for $925 cash

January 26, 2016 Collected $1,600 on account from credit customers

January 27, 2016 Paid $3,000 cash for the supplies purchased on account during 2015

January 28, 2016 Paid $2,350 cash for the monthly utility bill

January 29, 2016 Sold services for $19,000 in cash and $2,750 on account

January 31, 2016 Issued checks for a total of $25,750 to pay monthly salaries

January 31, 2016 Issued a check for $15,000 for personal use

January 31, 2016 Paid $4,150 cash for maintenance services for the month

January 31, 2016 Purchased equipment for $15,000; paid $10,000 cash with the balance on credit

January 31, 2016 Sold services for $5,600 in cash and $1,580 on credit

Hints:

Your Net Income for January should be $34,597

Total Assets at the end of January should be $158,364, and total Equity should be $148,264

You do not have to do any Trial Balances, but you may do so if it is helpful to you.

General Journal				Page	1
Date		Accounts	Post Ref.	Debit	Credit
General Journal				Page	2
Date		Accounts	Post Ref.	Debit	Credit

Transactions: January 2, 2016 Purchased supplies for $6,000 cash Purchased a one-year insurance policy for $7,200 cash January 2, 2016 Sold services for $20,000 in cash and $4,000 on credit January 7, 2016 January 12, 2016 Collected a total of $4,000 on account from credit customers January 12, 2016 paid $3,200 cash to pay for special promotional advertising Collected a total of $3,500 on account from credit customers January 13, 2016 January 14, 2016 Returned supplies that were damaged for a cash refund of $650 January 15, 2016 Sold services for $20,700 in cash and $2,300 on credit January 20, 2016 Purchased supplies for $4,600 on credit January 20, 2016 Sold services for $12,500 in cash and $3,350 on credit January 20, 2016 Collected a total of $4,500 on account from credit customers Paid $6,075 cash to pay for maintenance work on office equipment January 21, 2016 Paid $3,200 cash for special promotional advertising January 22, 2016 Paid the monthly phone bill for $925 cash January 23, 2016 January 26, 2016 Collected $1,600 on account from credit customers Paid $3,000 cash for the supplies purchased on account during 2015 January 27, 2016 Paid $2,350 cash for the monthly utility bill January 28, 2016 January 29, 2016 Sold services for $19,000 in cash and $2,750 on account January 31, 2016 ssued checks for a total of $25,750 to pay monthly salaries January 31, 2016 Issued a check for $15,000 for personal use January 31, 2016 Paid $4,150 cash for maintenance services for the month January 31, 2016 Purchased equipment for $15,000; paid $10,000 cash with the balance on credit January 31, 2016 Sold services for $5,600 in cash and $1,580 on credit Hints: Your Net Income for January should be $34,597 Total Assets at the end of January should be $158,364, and total Equity should be $148,264 You do not have to do any Trial Balances, but you may do so if it is helpful to you