PART 1:

PART 2:

PR 4-5A Complete accounting cycle Obj. 4,5 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: July 1. The following assets were received from Steffy Lopez in exchange for common stock cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. 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, $4,500. 4. Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500 5. Purchased additional office equipment on account from Office Station Co, $6,500. 6. Received cash from clients on account, $15,300, 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. Recorded services provided on account for the period July 1-12. $13,300. 14. Paid receptionist for two weeks' salary, $1,750. Record the following transactions on Page 2 of the journal: 17. Recorded cash from cash clients for fees earned during the period July 1-17. $9,450. 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, S4,000. 26. Received cash from clients on account, $12,000. 27. Paid receptionist for two weeks' salary: $1,750. 29. Paid telephone bill for July, $325. 31. Paid electricity bill for July, 5675. 31. Recorded cash from cash clients for fees earned for the period July 25-31, $5,200. 31. Recorded services provided on account for the remainder of July, $3,000. 31. Paid dividends, $12,500. Instructions 1. Journalize each transaction in a two-column journal starting on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 11 Cash 31 Common Stock 12 Accounts Receivable 32 Retained Earnings 14 Supplies 33 Dividends 15 Prepaid Rent 41 Fees Earned 16 Prepaid Insurance 51 Salary Expense 18 Office Equipment 52 Rent Expense 19 Accumulated Depreciation 53 Supplies Expense 21 Accounts Payable 54 Depreciation Expense 22 Salaries Payable 55 Insurance Expense 23 Unearned Fees 59 Miscellaneous Expense 2. Post the journal to a ledger of four-column accounts. 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 parts (5) and (6). (a) Insurance expired during July is $375. (b) Supplies on hand on July 31 are $1,525. (c) Depreciation of office equipment for July is $750. (d) Accrued receptionist salary on July 31 is $175. le) Rent expired during July is $2,400, f) Unearned fees on July 31 are $2,750, 5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 3 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of stockholders' equity, and a balance sheet 9. Prepare and post the closing entries. Record the closing entries on Page 1 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry 10. Prepare a post-closing trial balance, Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. In the general ledger accounts, only normal balance columns will be graded. In graded sections, enter a zero in cells you would otherwise leave blank. 1. and 2. JOURNAL Page 1 Post. Ref. Debit Credit Date Description 2012 July 1 Cash Accounts Receivable Supplies Office Equipment Common Stock 1 11 12 14 18 31 13.500 20.800 3,200 7.500 45,000 2 4 5 8 10 12 12 14 JOURNAL Page 2 Post. Ref. Description Debit Credit Date 2012 July 17 18 20 24 26 27 29 31 31 111 31 31 GENERAL LEDGER 2., 6., and 9. Cash Post Ref. 11 Balance Credit Item Debit Credit Debit 1 0 13,500 Date 20Y2 July 1 1 2 4 8 10 12 14 17 18 24 28 27 29 31 31 31 13,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Accounts Receivable Post Ref. 12 Balance Credit Item Debit Credit Debit 1 20.800 Date 2012 July 1 6 12 20 28 31 20.800 0 0 0 0 0 Supplies 14 Post. Ref. Item Balance Credit Debit Credit Debit July 1 3,200 Date 20Y2 1 18 31 Adjusting Prepaid Rent 3,200 0 0 0 0 0 Post. Ref. 15 Balance Credit Debit Credit Debit 0 Date Item 2012 July 1 31 Adjusting Prepaid Insurance 0 0 0 Post Ref. 16 Balance Credit Debit Credit Debit Date Item 20Y2 July 2 31 Adjusting Office Equipment 0 0 0 0 Post. Ref. 18 Balance Credit Date Item Debit Credit Debit 2012 July 1 7.500 1 5 Accumulated Depreciation 7,500 0 0 0 Post 19 Balance Credit Ref. Debit Credit Debit Date Item 20Y2 July 31 Adjusting Accounts Payable 0 0 Post Ref. 21 Balance Credit Debit Credit Debit Date Item 20Y2 July 5 12 Salaries Payable 0 0 0 0 22 Balance Post. Ref. Debit Credit Debit Credit Date Item 2012 July 31 Adjusting Unearned Fees 0 0 Post Ref. 23 Balance Credit Item Debit Credit Debit Date 20Y2 July 4 31 OO Adjusting ool Common Stock Post 31 Balance Credit Ref. Debit Credit Debit Date Item 20Y2 July 1 Retained Earnings 1 0 45,000 45.000 Post 32 Balance Credit Ref. Debit Credit Debit 0 Date Item 20Y2 July 1 31 Closing 31 Closing Dividends 0 0 OO Post. Ref. 33 Balance Credit Date Item Debit Credit Debit 20Y2 July 31 31 Closing Fees Earned 0 0 OO Post Ref. 41 Balance Credit Debit Credit Debit Date Item 20Y2 July 12 17 20 24 31 31 31 Adjusting 31 Closing Salary Expense OOOOOO 0 0 Post Ref. 51 Balance Credit Debit Credit Debit 0 Date Item 20Y2 July 14 27 31 Adjusting 31 Closing Rent Expense 0 0 0 0 0 0 0 Post Ref. 52 Balance Credit Item Debit Credit Debit Date 20Y2 July 31 31 Adjusting Closing 0 0 oo Supplies Expense Post 53 Balance Credit Ref. Debit Credit Debit Date Item 20Y2 July 31 Adjusting 31 Closing Depreciation Expense 0 0 0 0 Post Ref. 54 Balance Credit Debit Credit Debit Date Item 2012 July 31 Adjusting 31 Closing Insurance Expense 0 0 0 0 Post Ref. 55 Balance Credit Debit Credit Debit Date Item 2012 July 31 Adjusting 31 Closing Miscellaneous Expense 0 0 0 0 Post Ref. 59 Balance Credit Item Debit Credit Debit Date 20Y2 July 10 29 31 31 OOOO Closing