The following are the balances in the accounts for Joan Miller Advertising Agenc

Question

The following are the balances in the accounts for Joan Miller Advertising Agency as of July 31

During the month of August, the agency engaged in the following transactions:

Aug. 1 Received an additional investment of cash from Joan Miller, $6,300.Aug
2 Purchased additional office equipment with cash, $1200.

Aug. 5 Received art equipment transferred to the business from Joan Miller, $1,400.

Aug. 6 Purchased additional office supplies with cash, $90

Aug. 7 Purchased additional art supplies on credit from Taylor Supply Company, $450.

Aug. 8 Completed the series of advertisements for Marsh Tire Company that began on July, and billed Marsh Tire Company for the total services performed, including the accrued revenues that had been recognized in January of $200 (see accounts receivable). The total bill is $800.

Aug. 9 Paid the secretary for two weeks' wages, $1200.

Aug. 12 Paid the amount due to Morgan Equipment for the office equipment purchased last month $1,500

Aug. 13 Accepted an advance fee in cash for artwork to be done for another agency, $1,600.
Aug. 14 Purchased a copier from Morgan Equipment for $2,100, paying $350 in cash and agreeing to pay the rest in equal payments over the next five months.

Aug. 15 Performed advertising services and accepted a cash fee, $1,450.

Aug. 16 Received payment on account from Ward Department Stores for services performed last month, $2,800.

Aug. 19 Paid amount due for the telephone bill that was received and recorded at the end of July , $140.

Aug. 20 Performed advertising services for Ward Department Stores and agreed to accept payment next month, $3,200.

Aug. 21 Performed art services for a cash fee, $580.

Aug. 22 Received and paid the utility bill for August, $220.

Aug 23. Paid the secretary for two weeks' wages, $1200.

Aug. 26 Paid the rent for Sept in advance, $800.

Aug. 27 Received the telephone bill for February, which is to be paid next month, $160.

Aug. 30 Paid out cash to Joan Miller as a withdrawal for personal living expenses, $1,400.

At the end of Augusr, adjustments are made for the following:

a. One month's prepaid rent has expired.$800

b. One month's prepaid insurance has expired, $80.

c. An inventory of art supplies reveals $600 of supplies are still on hand on aug 31.

d. An inventory of office supplies reveals $410 in office supplies are still on hand on aug 31

e. Depreciation on the Art equipment for aug is calculated to be $100.

f. Depreciation on the Office equipment for aug is calculated to be $100.

g. Art services performed for which payment has been received in advance total $1,300

h. Advertising services performed that will not be billed until spe total $290.

i. Three days' worth of secretarial wages had accrued by the end of aug ( assume a five day week).

Question 6) Prepare a balance sheet

Debit Credit Cash 9140 Accounts Receivable 5000 Art Supplies 1300 Office Supplies 600 Prepaid Rent 800 Prepaid Insurance 880 Art Equipment 4200 Accumulated Depreciation--Art eq 70 Office Equipment 3000 Accumulated Depreciation--Office eq 50 Accounts Payable 3240 Unearned Art Fees 600 Wages Payable 360 Joan Miller, Captial                                    credit-20,600

Explanation / Answer

Joan Miller Advertising Agency All Amounts in $ Adjusted Trial Balance as on August 31 Particulars Debit Credit Opening Increase Decrease Closing Opening Decrease Increase Closing Cash 9140 14030 8100 15070 0 Accounts Receivable 5000 3400 4100 4300 0 Art Supplies 1300 450 1150 600 0 Office Supplies 600 90 280 410 0 Prepaid Rent 800 800 800 800 0 Prepaid Insurance 880 80 800 0 Art Equipment 4200 1400 5600 0 Accumulated Depreciation--Art eq 0 70 100 170 Office Equipment 3000 3300 6300 0 Accumulated Depreciation--Office eq 0 50 100 150 Accounts Payable 0 3240 1500 2200 3940 Accrued Expenses 0 160 160 Unearned Art Fees 0 600 600 1890 1890 Wages Payable 0 360 360 720 Joan Miller, Capital 0 20600 1400 7700 26900 Art Fees Revenue 0 0 1380 1380 Secretary Wages 2760 2760 0 0 Advertising Fees 0 0 290 4650 4360 Telephone Expenses 300 300 0 0 Utilities Cost 220 220 0 0 Rental Expenses 800 800 0 0 Supplies Expenses 1430 1430 0 0 Insurance Expenses 80 80 0 0 Depreciation - Art Equipment 100 100 0 0 Depreciation - Office Equipment 100 100 0 0 Total 24920 29260 14510 39670 24920 3790 18540 39670 Income Statement For the Year Ended 31 August Advertising Fees 4360 Art Fees Revenue 1380 5740 Less : Secretary Wages 2760 Telephone Expenses 300 Utilities Cost 220 Rental Expenses 800 Supplies Expenses 1430 Insurance Expenses 80 Depreciation - Art Equipment 100 Depreciation - Office Equipment 100 5790 Loss for the month -50 Balance Sheet As on 31 August Assets Cash 15070 Accounts Receivable 4300 Art Supplies 600 Office Supplies 410 Prepaid Rent 800 Prepaid Insurance 800 Art Equipment 5600 Accumulated Depreciation--Art eq 170 5770 Office Equipment 6300 Accumulated Depreciation--Office eq 150 6150 Total Assets 33900 Liabilities Accounts Payable 3940 Accrued Expenses 160 Unearned Art Fees 1890 Wages Payable 720 Joan Miller, Capital 27190 Total Liabilities 33900

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