ACC 421 Accounting Cycle Problem Ahlee Adams and Alana Miller graduated in accou
ID: 2463611 • Letter: A
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ACC 421 Accounting Cycle Problem Ahlee Adams and Alana Miller graduated in accounting with their Masters m May of Year 17. During the rest of Year 17, they completed the CPA exam Ashlee and Alana worked for a large manufacturing company during Year 18 and 19 By November, Year 19. Ashlee and Alana decided to take their savings and start their own CPA practice. In December, Year 19. they worked with an attorney and established A & M CPA. UC Also, they rented office space By January, they were ready to Stan business Ouring January Year 20. A & M CPA, UC had the following transactions: Record the above transactions in journal form Post the transactions to ledger accounts. Prepare an unadjusted trial balance. At the end of January. Ashlee and Alana prepared the following information: Supplies on hand, $100. One month rent has been used. The equipment purchased on January 2 had a 5-year Me and no salvage value Ashlee and Alana decided to use the straight-line method of depreciation. One month insurance has expired. One month interest on the note was accrued. Record the adjusting entries in journal form and post to ledger accounts Prepare an adjusted trial balance. Prepare financial statements-income statement, statement of retained earnings, and balance sheet. Prepare closing entries In journal form and post to ledger accounts. Prepare a post-closing trial balance.Explanation / Answer
Journal Entries :
_______________________________________________________________________________________
Date Description Ref Debit ($) Credit($)
Jan 2 Bank 14,000
Common stock 14,000
(to record common stock )
Jan. 2 Prepaid rent 3,000
Cash 3,000
(to record rent of three months)
Jan. 2 Legal fees 2,000
Cash 2,000
Jan 2 Prepaid insurance 3,600
Cash 3,600
Jan 2 Supplies 500
Cash 500
Jan 2 Office equipment 8,000
Cash 2,000
4% Notes payable 6,000
Jan 6 Cash 1,000
Service revenue 1,000
Jan 6 Advertisement 400
Cash 400
Jan 10 Bank 2,000
Cash 2,000
jan 17 Accounts receivable 1,000
Cash 3,000
Service revenue 4,000
Jan 22 Cash a/c 500
Accounts Receivable 500
Jan 24 Accounts receivable 1,200
Cash 4,000
Service Revenue 5,200
Jan 28 Cash 800
Accounts receivable 800
Jan 31 Telephone bill 250
Cash 250
Jan. 31 Gas 200
Cash 200
Jan 31 Electricity bill 75
Cash 75
Jan 31 Accounts receivable 1,500
Cash 4,500
Service revenue 6,0 00
Jan 31 Dividend 2,000
Cash 2,000
______________________________________________________________________________________
Adjustment entrries:
1. Rent 1,000
Prepaid rent 1,000
2. Depreciaiton 133
Accumulated depreciation 133
3. Insurance 300
Prepaid insurance 300
4. Accrued interest 20
Interest 20
_________________________________________________________________________________________
T accounts :
Bank a/c
Debit ! credit
14000 !
2000 !
Bal 16,000
Common stock a/c
Detbit Credit
14,000
Cash a/c
Debit Credit
1,000 3,000
3,000 2,000
500 3.600
4,000 500
800 2,000
4,500 400
13,800 2,000
250
200
75
2000
1,6025
Bal 2,225
Legal fees
Debit Credit
2000
Prepaid insurance
Debit credit
3,600
Supplies
Debit Credit
500
Office Equipment
Debit Credit
2,000
6,000
4% Notes payable
Debit Credit
6.000
Note: time not sufficient
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