Accounting Cycle Review 4-4 (Part Level Submission) At June 30, 2017, the end of

Question

Accounting Cycle Review 4-4 (Part Level Submission) At June 30, 2017, the end of its most recent fiscal year, Bramble Computer Consultants' post-closing trial balance was as follows: Debit Credit Cash Accounts receivable Supplies Accounts payable Unearned service revenue Common stock Retained earnings $4,080 940 540 $310 870 2,800 1,580 $5,560 $5,560 The company underwent a major expansion in July. New staff was hired and more financing was obtained. Bramble conducted the following transactions during July 2017, and adjusts its accounts monthly July Purchased equipment, paying $3,600 cash and signing a 2-year note payable for $15,600. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month 1 2 Issued 15,600 shares of common stock for $39,000 cash 3 Paid $3,000 cash for a 12-month insurance policy effective July 1 3 Paid the first 2 (July and August 2017) months' rent for an annual lease of office space for $3,100 per mont?h 6 Paid $3,000 for supplies 9 Visited client offices and agreed on the terms of a consulting project. Bramble will bill the client, Connor Productions, on the 20th of each month for services performed Collected $940 cash on account from Milani Brothers. This client was billed in June when Bramble performed the service Performed services for Fitzgerald Enterprises. This client paid $870 in advance last month. All services relating to this payment are now completed 10 13

Explanation / Answer

Date Account Titles and Explanation Debit Credit Jul-31 Service revenue 30470 Income summary 30470 (To close revenue account) Jul-31 Income summary 25288 Salaries and wages expense 17200 Rent expense 3100 Advertising expense 1700 Supplies expense 1000 Utilities expense 620 Depreciation expense 400 Insurance expense 250 Interest expense 78 Income tax expense 940 (To close expense accounts) Jul-31 Income summary 5182 Retained earnings 5182 (To close net income to retained earnings) Retained Earnings Jul. 1 Bal. 1580 Jul-31 5182 Jul. 31 Bal. 6762 Service Revenue Jul-31 30470 Jul-13 870 Jul-20 21800 Jul-23 7800 Jul. 31 Bal. 0 Salaries and Wages Expense Jul-18 8600 Jul-31 17200 Jul-31 8600 Jul. 31 Bal. 0 Rent Expense Jul-31 3100 Jul-31 3100 Jul. 31 Bal. 0 Advertising Expense Jul-20 1700 Jul-31 1700 Jul. 31 Bal. 0 Supplies Expense Jul-31 1000 Jul-31 1000 Jul. 31 Bal. 0 Utilities Expense Jul-31 620 Jul-31 620 Jul. 31 Bal. 0 Depreciation Expense Jul-31 400 Jul-31 400 Jul. 31 Bal. 0 Insurance Expense Jul-31 250 Jul-31 250 Jul. 31 Bal. 0 Interest Expense Jul-31 78 Jul-31 78 Jul. 31 Bal. 0 Income Tax Expense Jul-31 940 Jul-31 940 Jul. 31 Bal. 0 Income Summary Jul-31 25288 Jul-31 30470 Jul-31 5182 Jul. 31 Bal. 0

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