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Jim Kennedy opened a web consulting business called Kind Matters and recorded the following transactions in its first month of operations. April 1 Kennedy
Jim Kennedy opened a web consulting business called Kind Matters and recorded the following transactions in its first month of operations. April 1 Kennedy invests $98,000 cash along with office equipment valued at $29,000 in the company. April 2 The company prepaid $9,600 cash for twelve months' rent for office space. The company's policy is record prepaid expenses in balance sheet accounts. April 3 The company made credit purchases for $8,600 in office equipment and $4,200 in office supplies. Payment is due within 10 days. April 6 The company completed services for a client and immediately received $5,800 cash. April 9 The company completed a $9,000 project for a client, who must pay within 30 days. April 13 The company paid $12,800 cash to settle the account payable created on April 3. April 19 The company paid $2,640 cash for the premium on a 12-month insurance policy. The company's policy is record prepaid expenses in balance sheet accounts. April 22 The company received $3,900 cash as partial payment for the work completed on April 9. April 25 The company completed work for another client for $4,500 on credit. April 28 Kennedy withdrew $6,100 cash from the company for personal use. April 29 The company purchased $1,200 of additional office supplies on credit. April 30 The company paid $1,500 cash for this month's utility bill. Descriptions of items that require adjusting entries on April 30, 2021, follow. a) On April 2, the company prepaid $9,600 cash for twelve months' rent for office space. b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy's coverage began on April c) Office supplies on hand as of April 30 total $1,800. d) Straight-line depreciation of office equipment, based on a 5-year life and a $7,600 salvage value, is $500 per month. e) The company has completed work for a client, but has not yet billed the $2,200 fee. f) Wages due to employees, but not yet paid, as of April 30 total $3,200.
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