Comprehensive Problem : Making Paper Music Company Complete the following compre
ID: 2447873 • Letter: C
Question
Comprehensive Problem: Making Paper Music Company
Complete the following comprehensive problem by following the accounting cycle with the exception of the worksheet.
The working papers are attached and should be used to complete this problem.
Making Paper Music Company Owner: Chris Brown Chart of Accounts as of July 1, 2014
11 Cash $5,310
12 Accounts Receivable $1,250
14 Supplies $170 15 Prepaid Insurance $0
17 Office Equipment $0
18 Accumulated Depreciation $0
21 Accounts Payable $250
22 Wages Payable $0
23 Unearned Revenue $0
31 Chris Brown, Capital $5,000
32 Chris Brown, Drawing $500
41 Fees Earned $6,650
50 Wages Expense $400
51 Office Rent Expense $750
52 Equipment Rental Expense $700
53 Utilities Expense $300
54 Music Expense $1,590
55 Advertising Expense $450
56 Supplies Expense $180
57 Legal Expenses $0
58 Insurance Expense $0
59 Miscellaneous Expense $300
60 Depreciation Expense $0
*Accounts Payable—Mega Music Café is the vendor the $250 is owed to
*Accounts Receivable-- Wiz Kalefa is the customer’s name that owes the $1250
1. Post the beginning balances shown in the Chart of Accounts above in the ledgers.
2. Journalize and post the following transactions:
July 1: Chris Brown made an additional investment in the Making Paper Music Company by depositing $4,000 in the bank.
July 1: Procured office space near a local music store and paid the rent for July of $1,800. July 1: Prepaid a one year insurance policy to State Farm for $2700.
July 2: Received a check from Wiz Khalifa for payment on his account, $1250.
July 3: Chris Brown signed a contract with Local Artist radio station to provide guest spots for the next three months. The contract requires Chris to provide services for 80 hours per month for $3600 (per month) and any additional hours over 80 are billed at $40 per hour.
July 3: Chris Brown receives an advance payment from Local Artist radio station in the amount of $7200 pertaining to the contract signed. July 3: Wrote a check to Mega Music Café for the amount owed
July 4: Met with an attorney to have the contract with Local Artist Radio reviewed and paid the legal fees in full--$800
July 5: Purchased office equipment from Office Depot for $6,000 and placed on account
July 8: Paid the Atlanta Journal Constitution $200 for an advertisement in the Sunday paper
July 11: Received $900 cash for singing at a party
July 13: Paid $600 to Capricorn Records to rent some studio equipment
July 14: Paid Lil Wayne $1,200 for assisting with parties and recording
July 16: Received $1200 for singing at a party
July 18: Purchased supplies from Office Depot on account $1080
July 21: Paid $620 to Digital Music for the use of music demos
July 22: Paid $800 to Jam Time Radio Station to advertise the services of Making Paper Music Company twice daily for the remainder of the month
July 23: Sang at a party for Sean Combs and charged $2500. $750 was paid in cash on the spot and the remainder was billed in an invoice
July 27: Paid $760 to Georgia Power for the electric bill
July28: Paid wages of $1200 to Lil Wayne for assisting with parties and recording
July 29: Paid $370 in various miscellaneous expenses
July 30: Sang at Missy Elliot’s Charity Ball and charged $1800. $400 was paid in cash on the spot and the remainder was billed in an invoice
July 31: Received $2800 for singing at a party
July 31: Paid $1400 in royalties to Motown Music for the use of others music
July 31: Chris Brown withdrew $1500 for personal bills
3. Prepare an Unadjusted Trial Balance forJuly 31, 2014
4. Journalize and post the following adjusting entries as of July 31, 2014 • Record the accrued revenues of $1600 • Supplies on hand at the end of the month $400 • Adjust the prepaid insurance account for one month • Record the depreciation for the Office Equipment $75 • Adjust the unearned revenue account for one month of revenues earned from Local Artist Radio • Record the accrued wages, to Lil Wayne, of $170
5. Prepare an Adjusted Trial Balance as of July 31, 2014
6. Prepare an Income Statement, Statement of Owner’s Equity, and a Balance Sheet as of July 31, 2014
7. Journalize and post the closing entries
8. Prepare a Post-Closing Trial Balance
Explanation / Answer
Comprehensive Problem : Making Paper Music Company Complete the following compre
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