(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

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division

P 12-7 Securities held-to-maturity, securities available for sale, and trading securities

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities intending to earn profits on short-term differences in price. The following selected transactions relate to Amalgamated's investment activities during the last quarter of 2011 and the first month of 2012. The only securities held by Amalgamated at October 1 were $30 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value. The company's fiscal year ends on December 31.

2011
Oct. 18 Purchased 2 million preferred shares of Millwork Ventures Company for $58 million as a speculative investment to be sold under suitable circumstances.
31 Received semiannual interest of $1.5 million from the Kansas Abstractors bonds.
Nov. 1 Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2018. Semiannual interest is payable April 30 and October 31.
1 Sold the Kansas Abstractors bonds for $28 million because rising interest rates are expected to cause their fair value to continue to fall.
Dec. 1 Purchased 12% bonds of Household Plastics Corporation at their $60 million face value, to be held until they mature in 2028. Semiannual interest rate is payable May 31 and November 30.
20 Purchased U.S. Treasury bonds for $5.6 million as trading securities, hoping to earn profits on short-term differences in prices.
21 Purchased 4 million common shares of NXS Corporation for $44 million as trading securities, hoping to earn profits on short-term differences in prices.
23 Sold the Treasury bonds for $5.7 million.
29 Received cash dividends of $3 million from the Millwork Ventures Company preferred shares.
31 Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market share of the Millwork Ventures Company preferred stock was up $27.50 per share and $11.50 per share for the NXS Corporation common. The fair values of the bond investments were $58.7 million for Household Plastics Corporation and $16.7 million for Holistic Entertainment Enterprises.

2012
Jan. 7 Sold the NXS Corporation common shares for $43 million.

Required:
Prepare the appropriate journal entry for each transaction or event.

Click here for the solution: Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division

Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012

P4-2A Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012. The trial balance at June 30 is as follows.

VOGEL CONSULTING
Trial Balance
June 30, 2012
Debit Credit
Cash $ 6,850
Accounts Receivable 7,000
Prepaid Insurance 2,880
Supplies 2,000
Equipment 15,000
Accounts Payable $ 4,230
Unearned Service Revenue 5,200
Common Stock 22,000
Service Revenue 8,300
Salaries and Wages Expense 4,000
Rent Expense 2,000
$39,730 $39,730

In addition to those accounts listed on the trial balance, the chart of accounts for Vogel also contains the following accounts: Accumulated Depreciation—Equipment, Utilities Payable, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. Supplies on hand at June 30 total $720.
2. A utility bill for $180 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $4,100 of unearned service revenue has been earned at the end of the month.
5. Salaries of $1,250 are accrued at June 30.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. Invoices representing $3,900 of services performed during the month have not been recorded as of June 30.

Instructions
(a) Prepare the adjusting entries for the month of June.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at June 30, 2012.

Click here for the solution: Gil Vogel started his own consulting firm, Vogel Consulting, on June 1, 2012

For the past several years, Emily Page has operated a part-time consulting business from her home

PR 4-6A For the past several years, Emily Page has operated a part-time consulting business from her home. As of June 1, 2010, Emily decided to move to rented quarters and to operate the business, which was to be known as Bottom Line Consulting, on a full-time basis. Bottom Line Consulting entered into the following transactions during June:

June 1: The following assets were received from Emily Page: cash, $20,000; accounts receivable, $4,500, supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
1. Paid three months rent on a lease rental contract, $6,000.
2. Paid the premiums on property casualty insurance policies, $2,400.

AND SO ON

Check: 8. Net Income $16,455

Click here for the solution: For the past several years, Emily Page has operated a part-time consulting business from her home

Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

P3-1B Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008. The trial balance at May 31 is as follows.

MODINE CONSULTING, INC.
Trial Balance
May 31, 2008
Account
Number Debit Credit
101 Cash $ 7,700
112 Accounts Receivable 4,000
126 Supplies 1,500
130 Prepaid Insurance 4,800
149 Office Furniture 9,600
201 Accounts Payable $ 3,500
209 Unearned Service Revenue 3,000
311 Common Stock 19,100
400 Service Revenue 6,000
726 Salaries Expense 3,000
729 Rent Expense 1,000
$31,600 $31,600

In addition to those accounts listed on the trial balance, the chart of accounts for Modine Consulting also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Office Furniture, No. 212 Salaries Payable, No. 229 Travel Payable, No. 631 Supplies Expense,No. 717 Depreciation Expense,No. 722 Insurance Expense, and No. 736 Travel Expense.

Other data:
1. $500 of supplies have been used during the month.
2. Travel expense incurred but not paid on May 31, 2008, $200.
3. The insurance policy is for 2 years.
4. $1,000 of the balance in the unearned service revenue account remains unearned at the end of the month.
5. May 31 is a Wednesday, and employees are paid on Fridays. Modine Consulting has two employees, who are paid $700 each for a 5-day work week.
6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $160 per month for 60 months.
7. Invoices representing $1,000 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May. Use J4 as the page number for your journal.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column.
(c) Prepare an adjusted trial balance at May 31, 2008.

Check: (c) Adj. trial balance $33,800


Click here for the solution: Linda Ace started her own consulting firm, Modine Consulting, Inc. on May 1, 2008

Draw the activity-on-node (AON) project network associated with the following activities for Dave Carhart’s consulting company project

Problem 3.3 Draw the activity-on-node (AON) project network associated with the following activities for Dave Carhart’s consulting company project. How long should it take Dave and his team to complete this project? What are the critical path activities?

Activity Immediate Predecessor Days
A - 3
B A 4
C A 6
D B 6
E B 4
F C 4
G D 6
H E,F 8


Click here for the solution: Draw the activity-on-node (AON) project network associated with the following activities for Dave Carhart’s consulting company project

For the past several years, Sara Keith has operated a part-time consulting business from her home

ACC 1800 – Accounting Procedures
Fall 2011 - Comprehensive Problem

For the past several years, Sara Keith has operated a part-time consulting business from her home. As of June 1, 2011, Sara decided to move to rented quarters and to operate the business, which was to be known as S&K Consulting, on a full-time basis. S&K Consulting entered into the following transactions during June:

June 1 The following assets were received from Sara Keith: cash, $20,000; accounts receivable, $4,500; supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
June 1 Paid three month’s rent on a lease contract, $6,000.
June 2 Paid the annual premiums on property and casualty insurance policies, $2,400.
June 4 Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700.
June 5 Purchased additional office equipment on account, $3,500.
June 6 Received cash from clients on account, $3,000.
June 10 Paid cash for a newspaper advertisement, $200.
June 12 Paid for part of the debt incurred on June 5, $750.
June 12 Recorded services provided on account for the period June 1-12, $5,100.
June 14 Paid part-time receptionist for two weeks’ salary, $1,100.
June 17 Recorded cash from clients for fees earned for the period June 1-16, $6,500.
June 18 Paid cash for supplies, $750.
June 20 Recorded services provided on account for the period June 13-20, $3,100.
June 24 Recorded cash from cash clients for fees earned for the period June 17-24, $5,150.
June 26 Received cash from clients on account, $6,900.
June 27 Paid part-time receptionist for two weeks’ salary, $1,100.
June 29 Paid telephone bill for June, $150.
June 29 Paid electricity bill for June, $400.
June 30 Recorded cash from cash clients for fees earned for the period June 25-30, $2,500.
June 30 Recorded services provided on account for the remainder of June, $1,100.
June 30 Sara withdrew $5,000 for personal use.

Instructions:
1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited.
11 Cash 31 Sara Keith, Capital
12 Accounts Receivable 32 Sara Keith, Withdrawals
14 Supplies 41 Service Revenue
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Service Revenue
2. Open T-accounts and post the journal entries to the T-accounts.
3. Complete a worksheet at end of June using the following adjustment data:
a. Insurance expired during June is $200.
b. Supplies on hand on June 30 are $650.
c. Depreciation of office equipment for June is $250.
d. Accrued receptionist salary on June 30 is $220.
e. Rent expired during June is $2,000.
f. Unearned service revenue on June 30 is $1,875.
4. Prepare an income statement, a statement of owner’s equity and a balance sheet.
5. Journalize and post the adjusting entries.
6. Journalize and post the closing entries.
7. Compute final balances in each T-account.
8. Prepare the post-closing trial balance.


Click here for the solution: For the past several years, Sara Keith has operated a part-time consulting business from her home

You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting

You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting. Sheila is an excellent consultant, but not a good accountant. She has attempted to prepare the first month’s financial statements, however, the statements do not balance. Her financial statements are a good starting point, but your job is to correct the errors.

The statements are presented here.

SHEILA SHAW CONSULTING
Balance Sheet
August 31, 2007

Assets Liabilities
Current assets: Current liabilities:
Cash................................ $ 21,300 Accounts payable........ $ 1,250
Accounts receivable....... 3,800 Prepaid rent................. 2,050
Supplies........................... 875 Unearned fees.............. 1,150
Salaries payable.............. 150 Total liabilities................ $ 4,450
Prepaid insurance.......... 1,670
Total current assets..... $ 27,795
Property, plant, and
Equipment:...................... Owner's Equity
Office equipment............ $ 21,250 Sheila Shaw, capital....... 47,720
Less accum. depr............ 675
Total Property, plant,
and equipment............. 20,575 Total liabilities and
Total assets......................... $ 48,370 owner's equity............. $ 52,170

SHEILA SHAW CONSULTING
Income Statement
For the Month Ended August 31, 2007

Fees earned.................................................................................... $ 24,325
Expenses:
Salary expense....................................................................... $1,550
Rent expense.......................................................................... 1,200
Supplies expense.................................................................... 1,250
Insurance expense................................................................. 1,000
Miscellaneous expense.......................................................... 715
Interest expense..................................................................... 65
Bad Debt expense.................................................................. 150
Repairs and Maintenance.................................................... 200
Utilities expense..................................................................... 150
Payroll Tax expense.............................................................. 125
Office expense....................................................................... 525
Total expenses................................................................... 6,930
Net income..................................................................................... $ 17,395

SHEILA SHAW CONSULTING
Statement of Owner's Equity
For the Month Ended August 31, 2007

Sheila Shaw, capital, August 1, 2007........................................... $ 0
Additional investments during the month................................... 36,000
Total............................................................................................... $ 36,000
Net income for the month............................................................. $ 17,395
Less withdrawals........................................................................... 5,000
Increase in owner's equity............................................................ 12,395
Sheila Shaw, capital, August 31, 2007......................................... $ 48,395

SHEILA SHAW CONSULTING
Statement of Cash Flows
For the Month Ended August 31, 2007

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the month:................................................... $17,395
Adjustment for depreciation....................................... 675
Cash provided by operating activities................................. 18,070
(Increase) in working capital items
Accounts receivable.......................................................... (3,800)
Supplies.............................................................................. (875)
Prepaid expenses............................................................... 3,720
Accounts payable.............................................................. 1,250
Salaries payable................................................................. 150
Unearned fees.................................................................... 1,150
Cash flows from operating activities........................................... $18,990
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of office equipment........................................... (21,250)
Cash flows from investing activities............................................ $(21,250)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from shareholder (net of withdrawals).............. 31,000
Cash flows from financing activities........................................... $31,000
Net increase in cash....................................................................... $28,740
CASH-BEGINNING OF PERIOD............................................. 0
CASH-END OF PERIOD............................................................ $21,300

Sheila is grateful to have you on board as her controller, and you are eager to make a good impression on her by finding the errors in her statements. Download Sheila’s statements and make the changes to them. All the information you need to find the errors is contained in these statements.

Hint: There are 2 errors in the Balance Sheet, 1 error in the Income Statement, 1 error in the Statement of Owner’s Equity, and 2 errors in the Statement of Cash Flows. You will want to keep in mind all that you have learned in terms of the items on financial statements which are duplicated and flow from one statement to another.

Assignment Checklist:
1. Report 2 balance sheet errors
2. Produces 1 statement of owner’s equity errors
3. Report 2 errors on the statement of cash
4. Prepare corrected financial statements


Click here for the solution: You have accepted a job as the controller of a start-up company–a consulting firm, called Sheila Shaw Consulting

Prison Watch Company offers legal consulting advice to prison inmates

PR 4-1A Prison Watch Company offers legal consulting advice to prison inmates. Prison Watch Company prepared the end-of-period spreadsheet (work sheet) at the top of the following page at June 30, 2010, the end of the current fiscal year.

Instructions
1. Prepare an income statement for the year ended June 30.
2. Prepare a statement of owner’s equity for the year ended June 30. No additional investments were made during the year.
3. Prepare a balance sheet as of June 30.
4. On the basis of the end-of-period spreadsheet (work sheet), journalize the closing entries.
5. Prepare a post-closing trial balance.

Check: Net Loss $14,150


Click here for the solution: Prison Watch Company offers legal consulting advice to prison inmates

Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010

Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010. The trial balance at June 30 is as follows.

WAEGELEIN CONSULTING
Trial Balance
June 30, 2010
Debit Credit
Cash 6,850
Accounts Receivable 7,000
Prepaid Insurance 2,640
Supplies 2,000
Office Equipment 15,000
Accounts Payable 4,540
Unearned Service Revenue 5,200
Common Stock 21,750
Service Revenue 8,000
Salaries Expense 4,000
Rent Expense 2,000
39,490 39,490

In addition to those accounts listed on the trial balance, the chart of accounts for Waegelein also contains the following accounts:

Accumulated Depreciation - Office Equipment, Utilities Payable, Salaries Payable, Depreciation Expense, Insurance Expense, Utilities Expense, Supplies Expense

Other data:
1. Supplies on hand at June 30 total $980.
2. A utility bill for $180 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $3,900 of unearned service revenue has been earned at the end of the month.
5. Salaries of $1,250 are accrued at June 30.
6. The office equipment has a 5-year life with no salvage value and is being depreciated at $250 per month for 60 months.
7. Invoices representing $3,500 of services performed during the month have not been recorded as of June 30.

Instructions:
a. Prepare the adjusting entries for the month of June.
b. Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
c. Prepare an adjusted trial balance at June 30, 2010.

Click here for the solution: Nick Waege started his own consulting firm, Waegelein Consulting, on June 1, 2010

Software Associates (SA) is a computer software consulting firm that specializes in designing and implementing integrated marketing database warehousing programs

P 12–17: Software Associates

Software Associates (SA) is a computer software consulting firm that specializes in designing and implementing integrated marketing database warehousing programs. Humphrey Catalog is a client.

In preparing its bid for Humphrey, SA estimates its total labor cost for this project to be $222,500, broken down as follows:

Required:
a. Prepare a performance report for the Humphrey Catalog project.
b. Offer a plausible explanation for SA’s performance on the Humphrey project.

Click here for the solution: Software Associates (SA) is a computer software consulting firm that specializes in designing and implementing integrated marketing database warehousing programs

Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012

P4-2B Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012. The trial balance at May 31 is as shown below.

Quinn CONSULTING
Trial Balance
May 31, 2012
Debit Credit
Cash$ 7,500
Accounts Receivable 3,000
Prepaid Insurance 3,600
Supplies 2,500
Equipment 12,000
Accounts Payable $ 3,500
Unearned Service Revenue 4,000
Common Stock 19,100
Service Revenue 7,500
Salaries and Wages Expense 4,000
Rent Expense 1,500
34,100 $34,100

In addition to those accounts listed on the trial balance, the chart of accounts for Quinn Consulting also contains the following accounts: Accumulated Depreciation Equipment, Salaries and Wages Payable, Depreciation Expense, Insurance Expense, Utilities Expense, and Supplies Expense.

Other data:
1. $750 of supplies have been used during the month.
2. Utility costs incurred but not paid are $260.
3. The insurance policy is for 2 years.
4. $1,500 of the balance in the Unearned Service Revenue account remains unearned at the end of the month.
5. Assume May 31 is a Thursday and employees are paid on Fridays. Quinn Consulting has two employees that are paid $600 each for a5-day work week.
6. The equipment has a 5-year life with no salvage value and is being depreciated at $200 per month for 60 months.
7. Invoices representing $1,980 of services performed during the month have not been recorded as of May 31.

Instructions
(a) Prepare the adjusting entries for the month of May.
(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances. Use T accounts.
(c) Prepare an adjusted trial balance at May 31, 2012.

Check: (c) tot. trial balance $37,500

Click here for the solution: Pamela Quinn started her own consulting firm, Quinn Consulting, on May 1, 2012

P3-6 Presented below are the trial balance and the other information related to Carlos Beltran, a consulting engineer

Problem 3-6 (P3-6) Presented below are the trial balance and the other information related to Carlos Beltran, a consulting engineer.

AND SO ON

Instructions
(a) From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2007. (Omit explanations.)
(b) Prepare an income statement for 2007, a classified balance sheet, and a statement of owner’s equity. Carlos Beltran withdrew $17,000 cash for personal use during the year.

Click here for the solution: P3-6 Presented below are the trial balance and the other information related to Carlos Beltran, a consulting engineer