Final I.F. Review-JOURNAL ENTRIES Record the following company events using journal entries--step 2 of the Accounting Cycle. Use the chart of accounts if needed. A new owner started a CPA firm on June 1 and plans to prepare financial statements at the end of month. Jun 1: To start the company, the owner invested $10,000 of her cash and contributed furniture worth $15,000 into the business. Jun 2: The Company paid $3,000 cash to rent office space for 2 months. Jun 3: The Company purchased $10,000 of equipment on credit for its operations. Jun 4: The Company paid $1,200 for two months of advertising to inform the public of its opening. Jun 5: Work was completed for the first client A and $2,500 cash was collected. Jun 6: Another client B was serviced on credit and an invoice was issued for $8,000. Jun 7: Additional equipment was bought for $2,000 cash. Jun 8: The sole employee's $3,000 gross wages for the month was processed. Social Security taxes were $186, Medicare taxes $44, FWT $100, and SWT $10. Jun 9: Client B from Jun 6 paid a partial balance in cash for $5,000. Jun 10: Service was completed for customer C for $4,500 cash. Jun 11: The Company paid its balance in full for the equipment purchased on Jun 3. Jun 12: The owner withdrew $1,000 cash from the company to pay herself. Jun 13: The Company purchased office supplies from Costco for $800 in cash. Jun 14: $1,000 of equipment purchased on Jun 7 was returned for cash due to defects. Jun 15: The Company paid $900 cash for utilities. Kaua'i Community College ACC 124 PRINCIPLES OF ACCOUNTING I - Ann Y. Kennedy, CPA, MBA Final Exam Review - ADJUSTING JOURNAL ENTRIES Prepare the appropriate ADJUSTING journal entries to transfer amounts from the balance sheet to the income statement--step 5 of the Accounting Cycle. Use the chart of accounts if needed. The company would like to prepare financial statements at the end of month 6/30. 1. Jun 30: There was only $600 of office supplies LEFT on hand. 2. Jun 30: One month of advertising was used in June. 3. Jun 30: Record one month of rent used in June. 4. Jun 30: Record furniture straight-line depreciation for June. Salvage value is expected to by $5,000 and the life of the furniture is 5 years. 5. Jun 30: Record equipment straight-line depreciation for June. Salvage value is $3,000 and the expected life is 4 years. 6. Jun 30: Since the owner forgot to pay his employee, record the AJE to pay the employee what is owed. 7. Jun 30: The employee worked during the last week of the month and $500 in wages should be accrued. I Final I. F. Review- Journal Entries 1 June cash JE Date ACCI+ Description ref Debit credit 10,000 Furniture 15,000 capital 25.000 owners inveniment 2 June 2 prepaid Rent 3,000 Cash 3000 cash payment for office rent for 2 months 3 June 3 Equipment, 10000 Accounts Payable 10,000 Credi 4 June 4 Prepaid Advertising Advertising expense cash co. bought equip on 1200 1200 cash payment for 2 months advertising 5 June 5 cash Service Revenue provided service for cash 6 June 6 ACC Receivable service revenue provided service on creat 2.500 2500 8000 8000 Journal Entries JE pate ACC+ Description ver Debit Credit 7 June 7 equipment Cam 2000 2000 purchased additional equip. Wcash 8 June 8 wage expense 3000 SS Payable 186 medicare Payable 44 FWT payable 100 SWI payable 10 10 record payroll 9 June 9 cash 5000 Account Receivable 5,000 partial payment for service on June 6 10 June 10 cash Semce Revenue service completed for cash 11 June 11 Accounts payable cash payment of acct payable on 12 June 12 withdrawal cash 4500 4500 10000 10,000 June 31 1000 1,000 owner withdrew cash to pay herself Journal Entries NE Date Track + Description fet Debit 13 June 13 Equipment Cash purchased supplies credit 800 office 800 in cash 14 June-14 cash 1000 Purchases To record the return of inventory 15 June 15 Utility Expense 1000 900 cash 900 Paid uhlity in cash Adjusting Journal Entry JE Date ACCT & Derahiption rell Debit Creant 1 6130 supplies expense Supplies 200 200 26130 Adverting Expense 600 Prepaid Advertising 600 3 6130 reni A/C 1000 1000 4 6/30 Depreciation expense 4000 Accumilated dep. -equipp 2000 5 6/30 Depreciation expense. ACC depreciation-equip. 2250 2250 Adjusting Journal Entries JE Date Acct + Description. reff Debit/credit 6. 6130 salary expense 3000 Cunpaid salary 3000 76136 wage expense 500 wages payable 500 Closing JE'S [AJE/ Date Acct & descr. 6130 Revenue service revy Income Summary Close revenue accts. 12 6130 Income Summary. Depreciation expense wage expense utility expense Advertising expense /ref/ Debit Credit 12000 12000 9350 4250 3000 900 1200 25000 25000 close expence Acct. close income summary acc 3 6/30 Income Summary Capital 4 C130 Capital withdrawal close withdrawal acct 1000 1000 Account Cash Unadjusted T/B Dr 10,000 A/R Office supplies Prepaid advertising 1,200 Prepaid rent 3,000 Furniture 15,000 A/D-furniture Equipment A/D-equipment A/P Soc sec payable Medicare payable FWT payable SWT payable Wages payable Capital Withdrawals Revenue Adjusting JE's Cr Dr 25,000 1,000 12,000 Advertising expense Depre exp-furniture Depre exp equipment Office supplies expense Rent expense Wage expense Utilities expense 3,000 900 Totals 34,100 37,000 Adjusted T/B Cr Dr Income Statement Cr Dr Balance Sheet Or Dr Cr Account Cash A/R Office supplies Prepaid advertising Prepaid rent Furniture A/D-furniture Equipment A/D equipment A/P Soc sec payable Medicare payable FWT payable SWT payable Wages payable Capital Withdrawals Revenue Advertising expense Depre exp-furniture Depre exp- equipment Office supplies expense Rent expense Wage expense Utilities expense Income summary Totals Dr Adjusted T/B Closing JE's Post Closing T/B Cr Dr Cr Dr Cr Final LF. Review-T-Accounts Use the chart of accounts to set up T-accounts in the proper order-start at top left, go down, then right. cash furniture swt payable capital A/R equipment wages payable revenue office supplies Soc Sec payable advertising expense withdrawal repaid advertising medicare payable fice supplies expen utilities exp prepaid rent fwt payable rent exp