Danny\'s Consulting service (October 2017) 1 Owner invested S 18,000 cash into b
ID: 2541764 • Letter: D
Question
Danny's Consulting service (October 2017) 1 Owner invested S 18,000 cash into business 3 Owner paid his personal electric bill for $200 with company's check 4 Purchased supplies for $ 2300 on account 5 Paid monthly rent $ 2100 6 Received S 3,500 for services to be rendered in the future 10 Bought computer on account for $ 2400 12 Billed customers $ 7400 for services provided 8 Paid telephone bill S 600 26 Received S 3600 from customers billed on February 12th 27 Paid S 1000 for supplies bought on February 4th 30 Received advertising bill for $ 700 but still unpaid Chart of accounts: Cash 110; Accounts receivable 112; Supplies 114; Computer 115 Accounts Payable 210; Unearned revenue 212; Capital 301; Drawings 310 Consulting fees earned 400;Telephone expense 504; Rent Expense 509 Advertising expense 514. Instructions: Journalize the transactions (you can leave out explanation) Post to the ledger (t-account format) Prepare trial balance Prepare Income statement Prepare Statement of owner's equity Prepare Balance sheet nearned revenue is a liability account. It represents money a company receives i vance/upfront for services to be provided in the future. Hence the company is o provide service in the future
Explanation / Answer
Journal Entries -
Date
Account Titles
Debit
Credit
1-Oct-17
Cash
$18,000
Capital
$18,000
3-Oct-17
Drawings
$200
Cash
$200
4-Oct-17
Supplies
$2,300
Accounts Payable
$2,300
5-Oct-17
Rent Expense
$2,100
Cash
$2,100
6-Oct-17
Cash
$3,500
Unearned Revenue
$3,500
10-Oct
Computer
$2,400
Accounts Payable
$2,400
12-Oct-17
Accounts Receivable
$7,400
Service Revenue
$7,400
18-Oct-17
Telephone Expense
$600
Cash
$600
26-Oct-17
Cash
$3,600
Accounts Receivable
$3,600
27-Oct-17
Accounts Payable
$1,000
Cash
$1,000
30-Oct-17
Advertising Expense
$700
Advertising Payable
$700
T Accounts
Debit
Accounts Receivable
Credit
Date
Description
Amount
Date
Description
Amount
12-Oct
Service Revenue
$7,400
26-Oct
Cash
$3,600
31-Oct
Balance
$3,800
$7,400
$7,400
Debit
Computer
Credit
Date
Description
Amount
Date
Description
Amount
10-Oct
Accounts Payable
$2,400
31-Oct
Balance
$2,400
$2,400
$2,400
Debit
Accounts Payable
Credit
Date
Description
Amount
Date
Description
Amount
27-Oct-17
Cash
$1,000
4-Oct
Supplies
$2,300
31-Oct
Balance
$3,700
10-Oct-17
Computer
$2,400
$4,700
$4,700
Debit
Capital
Credit
Date
Description
Amount
Date
Description
Amount
1-Oct
Cash
$18,000
31-Oct
Balance
$18,000
$18,000
$18,000
Debit
Service Revenue
Credit
Date
Description
Amount
Date
Description
Amount
12-Oct
Accounts Receivable
$7,400
31-Oct
Balance
$7,400
$7,400
$7,400
Supplies
Date
Description
Amount
Date
Description
Amount
4-Oct-17
Accounts Payable
$2,300
31-Oct-17
Balance
$2,300
$2,300
$2,300
Unearned Revenue
Date
Description
Amount
Date
Description
Amount
6-Oct-17
Cash
$3,500
31-Oct-17
Balance
$3,500
$3,500
$3,500
Drawings
Date
Description
Amount
Date
Description
Amount
3-Oct-17
Cash
$200
31-Oct-17
Balance
$200
$200
$200
Consulting Fee Earned
Date
Description
Amount
Date
Description
Amount
31-Oct-17
Balance
$7,400
12-Oct-17
Accounts Receivable
$7,400
$7,400
$7,400
Telephone Expense
Date
Description
Amount
Date
Description
Amount
18-Oct-17
Cash
$600
31-Oct-17
Balance
$600
$600
$600
Rent Expense
Date
Description
Amount
Date
Description
Amount
5-Oct-17
Cash
$2,100
31-Oct-17
Balance
$2,100
$2,100
$2,100
Advertising Expense
Date
Description
Amount
Date
Description
Amount
31-Oct-17
Advertising Payable
$700
31-Oct-17
Balance
$700
$700
$700
Debit
Cash
Credit
Date
Description
Amount
Date
Description
Amount
1-Oct
Capital
$18,000
3-Oct
Drawings
$200
6-Oct
Unearned Revenue
$3,500
5-Oct-17
Rent Expense
$2,100
26-Oct
Accounts Receivable
$3,600
18-Oct
Telephone expense
$600
27-Oct-17
Accounts Payable
$1,000
31-Oct-17
Balance
$21,200
$25,100
$25,100
Trial Balance –
Danny's Consulting Service
Trial Balance
for the month ended October 2017
Account Titles
Debit
Credit
Cash
$21,200
Accounts Receivable
$3,800
Supplies
$2,300
Computer
$2,400
Accounts Payable
$3,700
Unearned Revenue
$3,500
Capital
$18,000
Drawings
$200
Consulting Fee Earned
$7,400
Telephone Expense
$600
Rent Expense
$2,100
Advertising Expense
$700
Advertising Payable
$700
Totals
$33,300
$33,300
Income Statement –
Danny's Consulting Service
Income Statement
for the month ended October 31, 2017
Sales Revenue
$7,400
Expenses -
Rent Expense
$2,100
Telephone Expense
$600
Advertising Expense
$700
expenses total
$3,400
Net Income
$4,000
Statement of owners’ Equity
Statement of Owner's Equity
Capital
$18,000
Less: Drawings
$200
$17,800
Retained Earnings
$4,000
Owners' equity
$21,800
Balance Sheet
Danny's Consulting Service
Balance Sheet
as on October 31, 2017
Assets
Cash
$21,200
Accounts Receivable
$3,800
Supplies
$2,300
Computer
$2,400
Total Assets
$29,700
Liabilities
Accounts Payable
$3,700
Unearned Revenue
$3,500
Advertising Payable
$700
Total liabilities
$7,900
Owner's Equity
Capital
$17,800
Retained Earnings
$4,000
Owner's Equity
$21,800
Total liabilities and Owners' Equity
$29,700
Journal Entries -
Date
Account Titles
Debit
Credit
1-Oct-17
Cash
$18,000
Capital
$18,000
3-Oct-17
Drawings
$200
Cash
$200
4-Oct-17
Supplies
$2,300
Accounts Payable
$2,300
5-Oct-17
Rent Expense
$2,100
Cash
$2,100
6-Oct-17
Cash
$3,500
Unearned Revenue
$3,500
10-Oct
Computer
$2,400
Accounts Payable
$2,400
12-Oct-17
Accounts Receivable
$7,400
Service Revenue
$7,400
18-Oct-17
Telephone Expense
$600
Cash
$600
26-Oct-17
Cash
$3,600
Accounts Receivable
$3,600
27-Oct-17
Accounts Payable
$1,000
Cash
$1,000
30-Oct-17
Advertising Expense
$700
Advertising Payable
$700
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