Question
For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2016, Steffy decided to move
For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2016, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July:
Jul. | 1 | The following assets were received from Steffy Lopez: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received. | |||||||||||||||||||||||||||||||||
1 | Paid two months rent on a lease rental contract, $4,800. | ||||||||||||||||||||||||||||||||||
2 | Paid the premiums on property and casualty insurance policies, $4,500. | ||||||||||||||||||||||||||||||||||
4 | Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500. | ||||||||||||||||||||||||||||||||||
5 | Purchased additional office equipment on account from Office Station Co., $6,500. | ||||||||||||||||||||||||||||||||||
6 | Received cash from clients on account, $15,300. | ||||||||||||||||||||||||||||||||||
10 | Paid cash for a newspaper advertisement, $400. | ||||||||||||||||||||||||||||||||||
12 | Paid Office Station Co. for part of the debt incurred on July 5, $5,200. | ||||||||||||||||||||||||||||||||||
12 | Recorded services provided on account for the period July 112, $13,300. | ||||||||||||||||||||||||||||||||||
14 | Paid receptionist for two weeks salary, $1,750. Record the following transactions on Page 2 of the journal:
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Required: | |||||||||||||
1. | Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) | ||||||||||||
2. | Post the journal to a ledger of four-column accounts. Add the appropriate posting reference to the journal. | ||||||||||||
3. | Prepare an unadjusted trial balance. | ||||||||||||
4. | At the end of July, the following adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6).
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5. | (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the work sheet. | ||||||||||||
6. |
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7. | Prepare an adjusted trial balance. | ||||||||||||
8. | Prepare an income statement, a statement of owners equity, and a balance sheet.* | ||||||||||||
9. |
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10. | Prepare a post-closing trial balance.
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1. | Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) |
6.a. | Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. |
9.a. | Journalize the closing entries on page 4 of the journal. |
Note: Scroll down to access pages 2 through 4 of the journal.
6. a. Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. 9. a. Journalize the closing entries on page 4 of the journal. Post the journal to a ledger of four-column accounts. Add the appropriate posting reference to the journal. Post the adjusting entries, inserting balances in the accounts affected. Post the closing entries, inserting balances in the accounts affected. Leave the ITEM column BLANK for each row. If the account balance is zero (0) after closing entries are posted, enter a zero (0) in the account's normal balance column. 3. Prepare an unadjusted trial balance. 7. Prepare an adjusted trial balance. 8. Prepare an income statement for the month ended July 31, 2016. Be sure to complete the statement heading. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. 8. Prepare a statement of owners equity for the month ended July 31, 2016. Be sure to complete the statement heading. No additional investments were made during the year. If a net loss has been incurred or there has been a decrease in owners equity, enter that amount as a negative number using a minus sign. Use the list of Labels and Amount Descriptions for the correct wording of text items. 8. Prepare a balance sheet as of July 31, 2016. Be sure to complete the statement heading. Fixed assets must be entered in order according to account number. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. 10. Prepare a post-closing trial balance.
PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REP DEBIT CREDIT 10Step by Step Solution
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