Complete Accounting Cycle For the past several years, Jeff Horton has operated a

Question

Complete Accounting Cycle

For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2019, Jeff decided to move to rented quarters and to operate the business, which was to be known as Rosebud Consulting, on a full-time basis. Rosebud Consulting entered into the following transactions during April:

Required:

1. Journalize each transaction, in chronological order, in a two-column journal starting on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. If there is more than one entry on the same date, be sure to enter the transactions in the exact order as presented in the data. (Do not insert the account numbers in the journal at this time.) For a compound transaction, if an amount box does not require an entry, leave it blank.

You will use the attached spreadsheet to complete several of the remaining parts of this problem. Click on the Spreadsheet icon above to open and save the Excel file to your computer. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

2. Post the transactions from part 1 to the general ledger in the attached spreadsheet. The posting must be in chronological order. Be sure to go back and enter the appropriate posting references in the journal.

3. In the spreadsheet, prepare an unadjusted trial balance.

4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during April is $350.
b. Supplies on hand on April 30 are $1,225.
c. Depreciation of office equipment for April is $400.
d. Accrued receptionist salary on April 30 is $275.
e. Rent expired during April is $2,000.
f. Unearned fees on April 30 are $2,350.

5. (Optional) In the spreadsheet, notice that the unadjusted trial balance amounts have been entered. Enter the adjusting entries and complete the remainder of the worksheet.

6. Journalize the adjusting entries on Page 3 of the journal. (Do not insert the account numbers in the journal at this time.) Post the adjusting entries to the general ledger in the spreadsheet. The posting must be in chronological order. Then go back and enter the appropriate posting references in the journal.

7. In the spreadsheet, prepare the adjusted trial balance.

8. Prepare an income statement, a statement of owner's equity, and a balance sheet.

9. Journalize the closing entries on Page 4 of the journal. (Do not insert the account numbers in the journal at this time.) Post the closing entries to the general ledger in the spreadsheet. Then go back and enter the appropriate posting references in the journal.

For a compound transaction, if an amount box does not require an entry, leave it blank.

10. Prepare a post-closing trial balance. If a box does not require an entry, leave it blank.

Apr. 1. The following assets were received from Jeff Horton: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. There were no liabilities received. 1. Paid three months' rent on a lease rental contract, $6,000. 2. Paid the premiums on property and casualty insurance policies, $4,200. 4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400. 5. Purchased additional office equipment on account from Smith Office Supply Co., $8,000. 6. Received cash from clients on account, $11,700. 10. Paid cash for a newspaper advertisement, $350. 12. Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400. 12. Provided services on account for the period April 1–12, $21,900. 14. Paid receptionist for two weeks' salary, $1,650.

Explanation / Answer

S No Date Account Debit Credit 1 Apr 1 Cash 20000 1 Apr 1 Accounts Receivable 14700 1 Apr 1 Supplies 3300 1 Apr 1 Office Equipment 12000 1 Apr 1 Jeff Horton, Capital 50000 2 Apr 1 Prepaid Rent 6000 2 Apr 1 Cash 6000 3 Apr 2 Prepaid Insurance 4200 3 Apr 2 Cash 4200 4 Apr 4 Cash 9400 4 Apr 4 Unearned Fees 9400 5 Apr 5 Office Equipment 8000 5 Apr 5 Accounts Payable 8000 6 Apr 6 Cash 11700 6 Apr 8 Accounts Receivable 11700 7 Apr 10 Miscellaneous Expense 350 7 Apr 10 Cash 350 8 Apr 12 Accounts Payable 6400 8 Apr 12 Cash 6400 9 Apr 12 Accounts Receivable 21900 9 Apr 12 Fees Earned 21900 10 Apr 14 Salary Expense 16500 10 Apr 14 Cash 16500 11 Apr 17 Cash 6600 11 Apr 17 Fees Earned 6600 12 Apr 18 Supplies 725 12 Apr 18 Cash 725 13 Apr 20 Accounts Receivable 16800 13 Apr 20 Fees Earned 16800 14 Apr 24 Cash 4450 14 Apr 24 Fees Earned 4450 15 Apr 26 Cash 26500 15 Apr 26 Accounts Receivable 26500 16 Apr 27 Salary Expense 1650 16 Apr 27 Cash 1650 17 Apr 29 Miscellaneous Expense 540 17 Apr 29 Cash 540 18 Apr 30 Miscellaneous Expense 760 18 Apr 30 Cash 760 19 Apr 30 Cash 5160 19 Apr 30 Fees Earned 5160 20 Apr 30 Accounts Receivable 2590 20 Apr 30 Fees Earned 2590 21 Apr 30 Jeff Horton, Drawing 18000 21 Apr 30 Cash 18000 Closing Entries 1 Apr 30 Insurance Expense 350 1 Apr 30 Prepaid Insurance 350 2 Apr 30 Supply Expense (3300+725-1225) 2800 2 Apr 30 Supplies 2800 3 Apr 30 Depreciation Expense 400 3 Apr 30 Accumulated Depcreciation 400 4 Apr 30 Salaries Expense 275 4 Apr 30 Salaries Payable 275 5 Apr 30 Rent Expense 2000 5 Apr 30 Prepaid Rent 2000 6 Apr 30 Unearned Fees 9400-2350 7050 6 Apr 30 Fees Earned 7050 Account Date Sum of Debit Sum of Credit Balance Remarks Cash Apr 1        20,000.00 20,000.00 Cash Apr 1            6,000.00 14,000.00 Cash Apr 2            4,200.00     9,800.00 Cash Apr 4          9,400.00 19,200.00 Cash Apr 6        11,700.00 30,900.00 Cash Apr 10                350.00 30,550.00 Cash Apr 12            6,400.00 24,150.00 Cash Apr 14          16,500.00     7,650.00 Cash Apr 17          6,600.00 14,250.00 Cash Apr 18                725.00 13,525.00 Cash Apr 24          4,450.00 17,975.00 Cash Apr 26        26,500.00 44,475.00 Cash Apr 27            1,650.00 42,825.00 Cash Apr 29                540.00 42,285.00 Cash Apr 30                760.00 41,525.00 Cash Apr 30          5,160.00 46,685.00 Cash Apr 30          18,000.00 28,685.00 Asset Prepaid Rent Apr 1          6,000.00     6,000.00 Asset Accounts Payable Apr 5            8,000.00     8,000.00 Accounts Payable Apr 12          6,400.00     1,600.00 Liability Accounts Receivable Apr 1        14,700.00 14,700.00 Accounts Receivable Apr 8          11,700.00     3,000.00 Accounts Receivable Apr 12        21,900.00 24,900.00 Accounts Receivable Apr 20        16,800.00 41,700.00 Accounts Receivable Apr 26          26,500.00 15,200.00 Accounts Receivable Apr 30          2,590.00 17,790.00 Asset Office Equipment Apr 1        12,000.00 12,000.00 Office Equipemnt Apr 5          8,000.00 20,000.00 Asset Prepaid Insurance Apr 2          4,200.00     4,200.00 Asset Supplies Apr 1          3,300.00     3,300.00 Supplies Apr 18              725.00     4,025.00 Asset Jeff Horton, Capital Apr 1          50,000.00 50,000.00 Capital Unearned Fees Apr 4            9,400.00     9,400.00 Liability Miscellaneous Expense Apr 10              350.00        350.00 Miscellaneous Expense Apr 29              540.00        890.00 Miscellaneous Expense Apr 30              760.00     1,650.00 Expense Fees Earned Apr 12          21,900.00 21,900.00 Fees Earned Apr 17            6,600.00 28,500.00 Fees Earned Apr 20          16,800.00 45,300.00 Fees Earned Apr 24            4,450.00 49,750.00 Fees Earned Apr 30            5,160.00 54,910.00 Fees Earned Apr 30            2,590.00 57,500.00 Income Salary Expense Apr 14        16,500.00 16,500.00 Salary Expense Apr 27          1,650.00 18,150.00 Expense Jeff Horton, Drawing Apr 30        18,000.00 18,000.00 Capital Unadjusted Adjusted Entries Adjusted Unadjusted Trial Balance Debit Credit Debit Credit Debit Credit Closing Entry ref Accounts Receivable 17790 17790 Cash 28685 28685 Prepaid Rent 6000 2000 4000 5 Office Equipemnt 20000 20000 Accumulated Depreciation 400 -400 3 Prepaid Insurance 4200 350 3850 1 Supplies 4025 2800 1225 2 Jeff Horton, Capital 50000 50000 Jeff Horton, Drawing -18000 -18000 Salary Payable 275 275 4 Accounts Payable 1600 1600 Unearned Fees 9400 7050 2350 6 Miscellaneous Expense 1650 1650 Salary Expense 18150 275 18425 4 Fees Earned 57500 7050 64550 6 Insurance Expense 350 350 1 Supply Expense 2800 2800 2 Depreciation Expense 400 400 3 0 Rent Expense 2000 2000 5 Total 100500 100500 12875 12875 100775 100775 Net Income Statement Service Revenue 64550 Less: Miscellaneous Expense 1650 Salary Expense 18425 Insurance Expense 350 Supply Expense 2800 Depreciation Expense 400 Rent Expense 2000 Net Income 38925

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