| You have been hired as an accountant for Yazstremski and Zimmer, LLC, a law firm. The business was created on May 1, 2017. The company will have a fiscal year end of April 30. The initial formation of the company involved contibutions of cash and property the the founding shareholders, and resulted in the balances that are included in the first 2 columns of the worksheet (see the worksheet tab). | During May, the first month of operations, the following transactions occurred: | | Event | | | | Paid $25,800 for a twelve month general and liability insurance policy which expires April 30, 2018. | | Purchased office furniture and computers for $21,780. | | Purchased $1,650 of office supplies on account. | | Hired an administrative assistant to begin work on May 21. Paid $2,200 to a firm that helped the talent search. | | Borrowed $24,000 from the bank for operating cash. The note has a 3.4% interest rate (simple interest) and | | is to be repaid in four years. | | Received a $21,100 retainer from a large client with pending litigation. The amount will pay for future services. | | Paid $2,830 for maintenance and cleanup of office space in advance of opening. | | (week of) Performed services for various clients for $1,400 cash and another $22,700 on account. | | Paid $800 to suppliers for purchases previously made on account. | | Paid salaries to employees totaling $13,100 for services rendered for 1 week. | | Paid utility bill totaling $220. | | Collected $4,300 as payment for amounts previously billed. | | Dividends of $1,200 were declared and paid. | At the end of May, the following additional information is available to help determine what adjustments are needed: | | | | One month of interest has accrued on the note payable for the bank loan. | | Salaries of $13,100 are paid every Friday (for a 5 day work week). May 31, 2017 was a Wednesday. | | One month of the insurance policy has expired. | | Office supplies supplies on hand are $950. | | A review of the unbilled hours report indicates that $9,200 of work has been performed but not yet billed. | | Depreciation expense for the building is $250 and for the furniture and fixtures is $200. | | $1,900 worth of legal services have been performed for the client who paid by retainer. | SUGGESTED STEPS FOR COMPLETION OF THE PROJECT: | | | | Prepare journal entries to record the May transactions given. Please refer to the Worksheet tab for Account Titles. | | Post the journal entries to ledger accounts using T-accounts to represent ledger accounts. Dont forget the opening balances from the information given on the Worksheet. There is a tab to use for T Accounts if you choose to. | | Add the May journal entry information to the Worksheet in the May columns | | Prepare an unadjusted trial balance as of May 31, 2017. This will be part of the Worksheet you prepare. There is a tab in this file that you will use for this. Excel formulas must be used throughout the project to obtain full credit. | | Prepare adjusting entries for the month of May given the information provided. | | Post the adjusting entries to the T-accounts and to the Adjusting entries columns on the worksheet | | Prepare an adjusted trial balance as of May 31, 2017. This will be part of the Worksheet you prepare. There is a tab in this file that you will use for this. | | ######################################################################################## | | Prepare and post closing entries for the end of the period and to the T Accounts | | ######################################################################################## | | | |
