Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Green River conducted the following transactions during July

image text in transcribedimage text in transcribed

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Green River conducted the following transactions during July 2017, and adjusts its accounts monthly. July 1 Purchased equipment, paying $4.000 cash and signing a 2-year note payable for $20,000. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month. 2 Issued 20,000 shares of common stock for $50,000 cash. 3 Paid $3,600 cash for a 12-month insurance policy effective July 1 3 Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $4,000 per month. 6 Paid $3,800 for supplies. Visited client offices and agreed on the terms of a consulting project Green River will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,200 cash on account from Milani Brothers. This client was billed in June when Green River performed the service. Performed services for Fitzgerald Enterprises. This client paid $1,120 in advance last month. All services relating to this payment are now completed. 14 Paid $400 cash for a utility bill. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $12,000 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $11,000. 20 Performed services worth $28.000 on account and billed customers. 20 Received a bill for $2,200 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,000 of revenue from the cash advance received July 16. 27 Received $15,000 cash from customers billed on July 20. Adjustment data: 1. Adjustment of prepaid insurance. 2. Adjustment of prepaid rent. 3. Supplies used, $1.250. 4. Equipment depreciation, $500 per month. 5. Accrual of interest on note payable. 6. Salaries for the second half of July, $11,000, to be paid on August 1. 7. Estimated utilities expense for July $800 (invoice will be received in August). 8. Income tax for July $1.200, will be paid in August. The chart of accounts for Green River Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable. Unearned Service Revenue. Common Stock Retained Earnings. Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense. Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense. Supplies Expense, and Utilities Expense. Account Titles and Explanation Debit Credit No. 1. Date July 31 ) Insurance Expense 300 Prepaid Insurance 300 2 July 31 Supplies 1250 3. July 31 Rent Expense 4000 Prepaid Rent 4000 July 31 Depreciation Expense 500 Accumulated Depreciation-Equipment 500 5. July 31 Utilities Expense 400 Accounts Payable 400 6. July 31 Interest Expense 1200 Accounts Payable 1200 7. July 31 Salaries and Wages Expense 11000 Salaries and Wages Payable 11000 8. July 31 1 Income Taxes Expense 1200 Income Taxes Payable 1200 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Green River conducted the following transactions during July 2017, and adjusts its accounts monthly. July 1 Purchased equipment, paying $4.000 cash and signing a 2-year note payable for $20,000. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month. 2 Issued 20,000 shares of common stock for $50,000 cash. 3 Paid $3,600 cash for a 12-month insurance policy effective July 1 3 Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $4,000 per month. 6 Paid $3,800 for supplies. Visited client offices and agreed on the terms of a consulting project Green River will bill the client, Connor Productions, on the 20th of each month for services performed. 10 Collected $1,200 cash on account from Milani Brothers. This client was billed in June when Green River performed the service. Performed services for Fitzgerald Enterprises. This client paid $1,120 in advance last month. All services relating to this payment are now completed. 14 Paid $400 cash for a utility bill. This related to June utilities that were accrued at the end of June. 16 Met with a new client, Thunder Bay Technologies. Received $12,000 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $11,000. 20 Performed services worth $28.000 on account and billed customers. 20 Received a bill for $2,200 for advertising services received during July. The amount is not due until August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $10,000 of revenue from the cash advance received July 16. 27 Received $15,000 cash from customers billed on July 20. Adjustment data: 1. Adjustment of prepaid insurance. 2. Adjustment of prepaid rent. 3. Supplies used, $1.250. 4. Equipment depreciation, $500 per month. 5. Accrual of interest on note payable. 6. Salaries for the second half of July, $11,000, to be paid on August 1. 7. Estimated utilities expense for July $800 (invoice will be received in August). 8. Income tax for July $1.200, will be paid in August. The chart of accounts for Green River Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable. Unearned Service Revenue. Common Stock Retained Earnings. Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense. Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense. Supplies Expense, and Utilities Expense. Account Titles and Explanation Debit Credit No. 1. Date July 31 ) Insurance Expense 300 Prepaid Insurance 300 2 July 31 Supplies 1250 3. July 31 Rent Expense 4000 Prepaid Rent 4000 July 31 Depreciation Expense 500 Accumulated Depreciation-Equipment 500 5. July 31 Utilities Expense 400 Accounts Payable 400 6. July 31 Interest Expense 1200 Accounts Payable 1200 7. July 31 Salaries and Wages Expense 11000 Salaries and Wages Payable 11000 8. July 31 1 Income Taxes Expense 1200 Income Taxes Payable 1200

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Power Of Accounting What The Numbers Mean And How To Use Them

Authors: Lawrence Lewis

1st Edition

0415884306, 978-0415884303

More Books

Students also viewed these Accounting questions

Question

Identify examples of loaded language and ambiguous language.

Answered: 1 week ago