Insert Layout References Open in Desktop App Search Times New Ro... v 11 B ... ... I U D A Instructions for Completing Comprehensive Problem The comprehensive problem provides an illustration of the basic accounting cycle. Students must complete the following items for the first month of operation (January) and the second month of operations (February). Hint: Complete all items listed below (W-111) for January prior to starting February 1. Record transactions with journal entries in the General Journal 2. Post journal entries to the General Ledger 3. Prepare the trial balance before adjustment (on the worksheet) 4. Prepare the adjusting journal entries. 5. Post the adjusting entries to the General Ledger 6. Prepare the adjusted trial balance on the worksheet). 7. Complete the worksheet. 8. Prepare closing journal entries 9. Post the closing entries to the General Ledger 10. Prepare the post-closing trial balance, 11. Prepare the following financial statements a. Income Statement b. Balance Sheet c. Statement of Retained Earnings. Comprehensive Problem Part One - January Times New Ro... 11 ... V ... Comprehensive Problem Part One - January Kellers Music was organized in January of 2017. The company offers music lessons to people of all ages and skill level. The company charges an annual $50 registration fee and $100 monthly due per student for music lessons. You have been hired by the company to install and maintain the company's accounting system. The owner of Kellers Music would like see the following statements at the end of each month Income Statement Balance Sheet Retained Earnings Statement The following transactions occurred during the month of January Jan. IKellers Music is organized as a corporation and sells $50,000 of capital stock to its owners. 1 Paid the annual insurance premium of $1,824 (Hint: Prepaid are recorded as an asset the resource has been used up. 1 Rented a building for $1,250 per month and paid the first three month's rent in advance 1 Paid $17,340 for the purchase, delivery, and installation of the following: Musical Instruments...... Computer... Fumiture.... $12,000 $1,440 $3,900 2 Received cash of $1,650 for signing up 11 students. The $1.650 included $550 collected for the annual registration fee and $1,100 for the monthly dues for lessons 3 Paid $220 for fliers to be distributed this week to local schools 5 Purchased supplies (business cards, ink, paper, pencils, etc...) on account. $225. 5 Purchased snacks on account for grand opening event for $145 Cadvertising expense). 9 Received cash of $1250 for signing up 10 additional students. The $1.250 included $500 collected for the registration fee and $750 for the prorated monthly dues for lessons 10 Hired a music teacher to help out in the evenings at $20 hour. (Hint: No entry required) 15 Siged up 7 additional students for $700. The $700 included $350 collected for the annual registration fee and $350 for prorated monthly dues for lessons. 24 Paid the music teacher hired on January 10th for 9 hours 26 152 Signed up 10 additional students which paid an annual registration fee of $50 student and $100 monthly dues. These students will not begin music lessons until next month, but each student paid for February lessons in advance. (Hint: The amour collected for the registration fee kammed in January at that is when the registration took place in January. The most collected for escort is recorded a d me since the service will not be provided on February). 31 The owner manager is a musician giving lessons (employee of company) and takes a salary of $2,500 for first month SJU LOL SOL Additional Information needed for adjusting entries at January 31st 1. Record depreciation expense using the straight line depreciation method for the month of January using the following useful lives (no residual value is anticipated): a. Musical Instruments b. Computer c. Furniture 5 years 10 years Avears 2. The cost of supplies on hand at January 31" was $95. 3. The music teacher has worked 4.5 hours since January 24th that he hasn't been paid. These wages will not be paid until next pay day 4. Electricity bill received but unpaid at January 31 totaled $196. 5. Additional adjustments are required for the rent and insurance expired during the month of January English (US) 9094 search 'o a
