Instructions For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2012, 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 entered into the following transactions during July Jul 13 The following assets were received from Steffy Lopezin exchange for common stock: cash, $12.500, accounts receivable, $20.800; supplies, $3,200; and office equipment. $7,000. 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, $4,860 4 5 Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500. Purchased additional office equipment on account from Office Station Co., $6,500. 6 Received cash from clients on account, $15,100. 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 14 Recorded services provided on account for the period July 1-12, $13.300 Paid receptionist for two weeks' salary, $1,800 Record the following transactions on Page 2 of the journal Jul 17 19 Recorded cash from cash clients for fees earned during the period July 1-17,50,450 18 Paid cash for supplies, $600 20 &% Recorded services provided on account for the period July 13-20, $6.650. 24 Recorded cash from cash clients for fees earned for the period July 17-24, $4,000. Jul. 17 18 Record the following transactions on Page 2 of the journal; Recorded cash from cash clients for fees earned during the period July 1-17, $9,450 Paid cash for supplies, $600. 20 Recorded services provided on account for the period July 13-20, $6,650. 24 Recorded cash from cash clients for fees earned for the period July 17-24, $4,000. 26 Received cash from clients on account, $12,000. 27 Paid receptionist for two weeks' salary, $1,800. 29 Paid telephone bill for July, $350. 31 Paid electricity bill for July, $675 311 Recorded cash from cash clients for fees earned for the period July 25-31, $5,300. 31 31 Recorded services provided on account for the remainder of July, $3,000. Paid dividends, $12,500. 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) A. Insurance expired during July is $405 B. Supplies on hand on July 31 are $1,550. C. Depreciation of office equipment for July is $750 0 Acced recentionist ealan on 21 i 180 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). A. Insurance expired during July is $405. B. Supplies on hand on July 31 are $1,550. C. Depreciation of office equipment for July is $750. D. Accrued receptionist salary on July 31 is $180. E Rent expired during July is $2,400 F. Unearned fees earned on July 31, $2,000. 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. A Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles B. Post the adjusting entries, inserting balances in the accounts affected. 7. Prepare an adjusted trial balance. 8. A. Prepare an income statement for the month ended July 31, 2012. 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. Refer to the Accounts, Labels and Amount Descriptions provided for I. the exact wording of the answer choices for text entries. You will not need to enter colons () on the income statement. B. Prepare a statement of stockholders' equity for the month ended July 31, 2012. Be sure to complete the statement heading. Negative amount should be indicated by the minus sign. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If an amount is zero, enter "0" C. Prepare a balance sheet as of July 31, 2012. Be sure to complete the statement heading. Fixed assets must be entered in order according E. Rent expired during July is $2,400 F. Unearned fees earned on July 31, $2,000 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 A Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on July 31. Refer to the Chart of Accounts for exact wording of account titles. B. Post the adjusting entries, inserting balances in the accounts affected. 7. Prepare an adjusted trial balance. 8. A. Prepare an income statement for the month ended July 31, 2012. 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. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons () on the income statement B. Prepare a statement of stockholders' equity for the month ended July 31, 2012. Be sure to complete the statement heading. Negative amount should be indicated by the minus sign. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If an amount is zero, enter "0" C. Prepare a balance sheet as of July 31, 2012. Be sure to complete the statement heading. Fixed assets must be entered in order according to account number. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons () or the word "Less" on the balance sheet, they will automatically insert where necessary Negative amount should be indicated by the minus sign 9. A Journalize the closing entries on page 4 of the journal. Refer to the Chart of Accounts for exact wording of account titles B. 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. 10. Prepare a post-closing trial balance. CHART OF ACCOUNTS Diamond Consulting General Ledger ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Rent 16 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Fees REVENUE 41 Fees Earned EXPENSES 51 Salary Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense 55 Insurance Expense 59 Miscellaneous Expense EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends Labels and Amount Descriptions Labels Current assets Current liabilities Expenses For the Month Ended July 31, 20Y2 July 31, 20Y2 Property, plant, and equipment Revenues Amount Descriptions Balances, July 1, 20Y2 Balances, July 31, 20Y2 Dividends Issued common stock Net income Net loss Total assets Total current assets Total expenses Total liabilities Total liabilities and stockholders' equity Total property, plant, and equipment Total stockholders' equity < 1 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) Note: Scroll down to access pages 2 through 4 of the journal 10 12 25 PAGE 1 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY All work saved. Email Instructor Submit Test for Gradim 12 14 14 O 2 I DATE DESCRIPTION JOURNAL I PAGE 2 ACCOUNTING EQUATION POST REF DENT CREDIT ASSETS LIABILITIES EQUITY 12 19 I 6. a. Journalize the adjusting entries on page 3 of the journal Adjusting entries are recorded on July 31 2 10 11 11 13 DATE DESCRIPTION Adjusting Entries JOURNAL PAGE 3 ACCOUNTING EQUATION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 9. a. Journalize the closing entries on page 4 of the journal 10 JOURNAL PAGE 4 ACCOUNTING EQUATION DATE DESCRIPTION POST REX DEBIT CREDIT ASSETS LIABILITIES EQUITY Closing Entries 2. Post the journal to a ledger of four-column accounts. Add the appropriate posting reference to the journal 6. b. Post the adjusting entries, inserting balances in the accounts affected 9. b. 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 Account: Cash Account: Accounts Receivable Account: Supplies Account: Prepaid Rent Account: Prepaid Insurance Account: Office Equipment Account: Accumulated Depreciation Account: Accounts Payable Account: Salaries Payable Account: Unearned Fees Account: Common Stock Account: Retained Earnings Account: Dividends Account: Fees Earned Account: Salary Expense Account: Rent Expense Account: Supplies Expense Account Depreciation Expense Account: Insurance Expense Account: Miscellaneous Expense LEDGER Account No. 11 Account No. 12 Account No. 14 Account No. 15 Account No. 16 Account No. 18 Account No. 19 Account No. 21 Account No. 22 Account No. 23 Account No. 31 Account No. 32 Account No. 33 Account No. 41 Account No. 511 Account No. 52 Account No. 53 Account No. 54 Account No. 55 Account No. 59 3. Prepare an unadjusted trial balance. 1 Cash 2 Accounts Receivable 3 Supplies < 4 Prepaid Rent Diamond Consulting UNADJUSTED TRIAL BALANCE July 31, 2012 ACCOUNT TITLE 5 Prepaid Insurance Office Equipment 7 Accumulated Depreciation Accounts Payable Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned DEBIT CREDIT ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Supplies 4 Prepaid Rent 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation s Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 15 Salary Expense 16 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals Adjusted Trial Balance 7. Prepare an adjusted trial balance. 1 Cash 2 Accounts Receivable 3 Supplies Diamond Consulting ADJUSTED TRIAL BALANCE July 31, 2012 ACCOUNT TITLE 4 Prepaid Rent 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation 8 Accounts Payable Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends A Cone Carned DEBIT CREDIT ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Supplies 4 Prepaid Rent 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Dividends 14 Fees Earned 15 Salary Expense 16 Rent Expense 17 Supplies Expense 18 Depreciation Expense 19 Insurance Expense 20 Miscellaneous Expense 21 Totals Income Statement Ba. Prepare an income statement for the month ended July 31, 2012. 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. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons () on the income statement 3 (Label) Diamond Consulting Income Statement (Label) Statement of Stockholders' Equity 8b. Prepare a statement of stockholders' equity for the month ended July 31, 2012. Be sure to complete the statement heading Negative amount should be indicated by the minus sign. Refer to the Accounts. Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. If an amount is zero, enter "0" Balance Sheet Diamond Consulting Statement of Stockholders' Equity (Label) Retained Common Stock Total Earnings Balance Sheet 8c. Prepare a balance sheet as of July 31, 2012. Be sure to complete the statement heading Fored assets must be entered in order according to account number. Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. You will not need to enter colons () or the word "Less" on the balance sheet they will automatically insert where necessary. Negative amount should be indicated by the minus sign (Label) Assets Diamond Consulting Balance Sheet (Label) 10 (Label) 6 7 9 (Label) 10 10 11 12 13 13 . 24 15 (Label) 16 16 Liabilities 17 17 18 19 20 Stockholders' Equity E 21 22 13 23 24 Post-closing Trial Balance 10. Prepare a post-closing trial balance. 1 Cash 2 Accounts Receivable 3 Supplies Diamond Consulting POST-CLOSING TRIAL BALANCE July 31, 2012 ACCOUNT TITLE 4 Prepaid Rent 5 Prepaid Insurance 6 Office Equipment 7 Accumulated Depreciation 8 Accounts Payable 9 Salaries Payable 10 Unearned Fees 11 Common Stock 12 Retained Earnings 13 Totals DEBIT CREDIT