(Comprehensive Problem 1) Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2010

Comprehensive Problem 1
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2010. The accounting cycle for Kelly Consulting for April, including financial statements was illustrated on page 157-168. During May, Kelly consulting entered the following transactions:

Check Figure: 8. Net Income $27,665

May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,500.
5. Received cash from clients on account, $1,750.
9. Paid cash for a newspaper advertisement, $300.
13. Paid office station company for part of the debt incurred on april 5, $400.
15. Recorded services provided on account for the period May 1-15, $6,100.
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 1-16, $8,200.
20. Purchased supplies on account, $400
21. Recorded services provided on account for the period May 16-20, $3,900.
25. Recorded cash from cash clients for fees earned for the period May 17-23, $5,100.
27. Received cash from clients on account, $9,500.
28. Paid part-time receptionist for two weeks salary, $750.
30. Paid telephone bill for May, $120.
31. Paid electricity bill for May $290.
31. Recorded cash from cash clients for fees earned for the period May 26-31, $3,875.
31. Recorded services provided on account for the remainder of May, $3,200.
31. Kelly withdrew $8,000 for personal use.

Instructions:
1. The chart of accounts for Kelly Consulting is shown on page 158, and the post-closing trial balance as of April 30, 2010 is shown on page 166. 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, 2010, and place a check mark in the posting reference column. Journalize each of the May transactions in a two column journal using Kelly Consulting's chart of accounts. (do not insert the account numbers in the journal at this time.)
2. Post the journal to a ledger of four-column accounts.
3. Prepare an unadjusted trail balance
4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts 5 and 6.
a. Insurance expired during May is $300.
b. Supplies on hand on May 31 are $600.
c. Depreciation of office equipment for May is $330.
d. Accrued receptionist salary on May 31 is $240.
e. Rent expired during May is $1,600.
f. Unearned fees on May 31 are $2,000
5. Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet.
6. Journalize and post the adjusting entries.
7.Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner's equity, and a balance sheet.
9. Prepare and post the closing entries. (Income summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.
10. Prepare a post-closing trial balance

Click here for the solution: (Comprehensive Problem 1) Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2010

On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel

Problem 4-2A Applying The Accounting Cycle

On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel. The following transactions occurred during the company’s first month:
April 1 Stafford invested $20,000 cash and computer equipment worth $40,000 in the business.
2 Rented furnished office space by paying $1,700 cash for the first month’s (April) rent.
3 Purchased $1,100 of office supplies for cash.
10 Paid $3,600 cash for the premium on a 12-month insurance policy. Coverage begins on April 11.
14 Paid $1,800 cash for two weeks’ salaries earned by employees.
24 Collected $7,900 cash on commissions from airlines on tickets obtained for customers.
28 Paid another $1,800 cash for two weeks’ salaries earned by employees.
29 Paid $250 cash for minor repairs to the company’s computer.
30 Paid $650 cash for this month’s telephone bill.
30 Stafford withdrew $1,500 cash for personal use.

The company’s chart of accounts follows:

Required
1. Use the balance column format to set up each ledger account listed in its chart of accounts.
2. Prepare journal entries to record the transactions for April and post them to the ledger accounts. The company records prepaid and unearned items in balance sheet accounts.
3. Prepare an unadjusted trial balance as of April 30.
4. Use the following information to journalize and post adjusting entries for the month:
a. Two-thirds of one month’s insurance coverage has expired.
b. At the end of the month, $700 of office supplies are still available.
c. This month’s depreciation on the computer equipment is $600.
d. Employees earned $320 of unpaid and unrecorded salaries as of month-end.
e. The company earned $1,650 of commissions that are not yet billed at month-end.
5. Prepare the income statement and the statement of owner’s equity for the month of April and the balance sheet at April 30, 2005.
6. Prepare journal entries to close the temporary accounts and post these entries to the ledger.
7. Prepare a post-closing trial balance.

Check (3) Unadj. trial balance totals, $67,900
(4a) Dr. Insurance Expense, $200
(5) Net income, $1,830; Capital (4/30/2005), $60,330; Total assets, $60,650
(7) P-C trial balance totals, $61,250

Click here for the solution: On April 1, 2005, Jennifer Stafford created a new travel agency, See-It-Now Travel

Towne Architects incorporated as licensed architects on April 1, 2012

P3-5A Towne Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred:

Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $375 per week, payable monthly.
2 Paid office rent for the month $900.
3 Purchased architectural supplies on account from Spring Green Company $1,300.
10 Completed blueprints on a carport and billed client $1,900 for services.
11 Received $700 cash advance from J. Madison to design a new home.
20 Received $2,800 cash for services completed and delivered to M. Svetlana.
30 Paid secretary-receptionist for the month $1,500.
30 Paid $300 to Spring Green Company for accounts payable due.

The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.

Instructions
(a) Journalize the transactions, including explanations.
(b) Post to the ledger T accounts.
(c) Prepare a trial balance on April 30, 2012.

Click here for the solution: Towne Architects incorporated as licensed architects on April 1, 2012