xercise 1 For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2014, 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 Consulting entered into the following transactions during July July 1. The following assets were received from Steffy Lopez: cash, $13,500; accountseceivable, 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. 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, $4,000. 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, $675 31. Recorded cash from cash clients for fees earned for the period July 25-31, S5,200. 31. Recorded services provided on account for the remainder of July, $3,000. 31.Steffy withdrew $12,500 for personal use. Instructions 1 Journalize each transaction, referring to the following chart of accounts in selecting the accounts to be debited and credited. Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation Accounts Payable Salaries Payable Unearned Fees Steffy Lopez, Capital Steffy Lopez, Drawing Fees Earned Salary Expense Rent Expense Supplies Expense Depreciation Expense Insurance Expense Miscellaneous Expense 2. 3. Prepare an unadjusted trial balance. At the end of July, the following adjustment data were assembled. Journalize and post the adjusting entries. (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. (e) Rent expired during July is $2,400. (f) Unearned fees on July 31 are $2,750 Prepare an adjusted trial balance. Prepare an income statement, a statement of owner's equity, and a balance sheet. 4. 5
