Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions:

May	3	Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
	5	Received cash from clients on account, $2,450.
	9	Paid cash for a newspaper advertisement, $225.
	13	Paid Office Station Co. for part of the debt incurred on April 5, $640.
	15	Recorded services provided on account for the period May 115, $9,180.
	16	Paid part-time receptionist for two weeks salary including the amount owed on April 30, $750.
	17	Recorded cash from cash clients for fees earned during the period May 116, $8,360.

Record the following transactions on Page 6 of the journal:

May	20	Purchased supplies on account, $735.
	21	Recorded services provided on account for the period May 1620, $4,820.
	25	Recorded cash from cash clients for fees earned for the period May 1723, $7,900.
	27	Received cash from clients on account, $9,520.
	28	Paid part-time receptionist for two weeks salary, $750.
	30	Paid telephone bill for May, $260.
	31	Paid electricity bill for May, $810.
	31	Recorded cash from cash clients for fees earned for the period May 2631, $3,300.
	31	Recorded services provided on account for the remainder of May, $2,650.
	31	Kelly withdrew $10,500 for personal use.

Required:

1.

The chart of accounts is shown in a separate panel and the post-closing trial balance as of April 30, 2016, is shown below.

A.	For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, enter Balance in the Item column and select a check mark in the Posting Reference column.
B.	Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Do not insert the account numbers in the journal at this time.)

2.

Post the journal entries on pages 5 and 6 of the journal to the ledger of four-column accounts.

3.

Prepare an unadjusted trial balance.

4.

At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

	Insurance expired during May is $275.
	Supplies on hand on May 31 are $715.
	Depreciation of office equipment for May is $330.
	Accrued receptionist salary on May 31 is $325.
	Rent expired during May is $1,600.
	Unearned fees on May 31 are $3,210.

5.

(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.

6.

A.	Journalize the adjusting entries on Page 7 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the adjusting entries to the ledger.

7.

Prepare an adjusted trial balance.

8.

Prepare an income statement, a statement of owners equity, and a balance sheet.*

9.

A.	Prepare the closing entries on Page 8 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the closing entries to the ledger. Indicate closed accounts by inserting a 0 (zero) in either of the Balance columns opposite the closing entry.

10.

Prepare a post-closing trial balance.

*	For guidance in completing the financial statements, be sure to read the instructions above each statement carefully.

---------------------------------------------------------------------------------

CHART OF ACCOUNTS

Kelly 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

	EQUITY
31	Kelly Pitney, Capital
32	Kelly Pitney, Drawing
33	Income Summary

	REVENUE
41	Fees Earned

	EXPENSES
51	Salary Expense
52	Rent Expense
53	Supplies Expense
54	Depreciation Expense
55	Insurance Expense
59	Miscellaneous Expense

-----------------------------------------------------------------------------

Labels
Cash flows from financing activities
Cash flows from investing activities
Cash flows from operating activities
Current assets
Current liabilities
Expenses
For the Month Ended May 31, 2016
May 31, 2016
Property, plant, and equipment
Amount Descriptions
Add withdrawals
Decrease in owners equity
Increase in owners equity
Kelly Pitney, capital, May 1, 2016
Kelly Pitney, capital, May 31, 2016
Less withdrawals
Net decrease in cash during month
Net income
Net income during the month
Net increase in cash during month
Net loss
Net loss during the month
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and owners equity
Total property, plant, and equipment

THIS IS WHAT I HAVE SO FAR...

1. B. Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. Refer to the Chart of Accounts for exact wording of account titles. Scroll down for page 6 of the journal. (Do not insert the account numbers in the journal at this time. This will be done during the posting step.) PAGE 5 JOURNAL DATE DESCRIPTION POST. REF DEBIT CREDIT May 3 Cash 4,500.00 Unearned Fees 4,500.00 May 5 Cash 2,450.00 Accounts Receivable 2,450.00 May 9 Miscellaneous Expense 225.00 Cash 225.00 May 13 Accounts Payable 640.00 Cash 640.00 May 15 Accounts Receivable 9,180.00 9,180.00 Fees Earned Salary Expense Salaries Payable 10 May 16 630.00 12 120.00 13 Cash 750.00 May 17 Cash 8,360.00 14 15 Fees Earned 8,360.00