Comprehensive Problem The chart of accounts for Kelly Consulting is as follows.
ID: 2581141 • Letter: C
Question
Comprehensive Problem
The chart of accounts for Kelly Consulting is as follows.
11 Cash
31 Kelly Pitney, Capital
12 Accounts Receivable
32 Kelly Pitney, Drawing
14 Supplies
33 Income Summary
15 Prepaid Rent
41 Fees Earned
16 Prepaid Insurance
51 Salary Expense
18 Office Equipment
52 Rent Expense
19 Accumulated Depreciation
53 Supplies Expense
21 Accounts Payable
54 Depreciation Expense
22 Salaries Payable
55 Insurance Expense
23 Unearned Fees
59 Miscellaneous Expense
Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2015. The accounting cycle for Kelly Consulting for April, including financial statements, is listed above. During May, Kelly Consulting entered into the following transactions.
May
3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $3,550.
5. Received cash from clients on account, $3,100.
9. Paid cash for a newspaper advertisement, $150.
13. Paid Office Station Co. for part of the debt incurred on April 5, $200
15. Recorded services provided on account for the period May 1-15, $5,350.
16. Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $850. Record the following transaction on Page 6 of the journal.
17. Recorded cash from cash clients for fees earned during the period May 1-16, $5,000.
20. Purchased supplies on account, $1,500.
21. Recorded services provided on account for the period May 16-20, $12,175
25. Recorded cash from cash clients for fees earned for the period May 17-23, $2,125.
27. Received cash from clients on account, $5,250. 28. Paid part-time receptionist for two weeks’ salary, $850.
30. Paid telephone bill for May, $330.
31. Paid electricity bill for May, $290.
31. Recorded cash from cash clients for fees earned for the period May 26-31, $5,500.
31. Recorded services provided on account for the remainder of May, $4,950.
31. Kelly withdrew $7,000 for personal use.
Instructions
1. The chart of accounts for Kelly Consulting is shown on page 1, and the post-closing trial balance as of April 30, 2015, is shown on page 3. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2015, and place a check mark in the Posting Reference column. Journalize each of the May transactions in a two-column journal starting on Page 5 of the journal and using Kelly Consulting’s chart of accounts. (Do not insert the account numbers in the journal at this time.)
2. Post the journal to a ledger of four-column accounts.
3. Prepare an unadjusted trial balance.
4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).
a. Insurance expired during May is 300.
b. Supplies on hand on May 31 are $200.
c. Depreciation of office equipment for May is $300.
d. Accrued receptionist salary on May 31 is $450.
e. Rent expired during May is $2,000. f. Unearned fees on May 31 are $2,500.
5. Enter the unadjusted trial balance on an end-of period spreadsheet (work sheet) and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 7 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries on Page 8 of the journal. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.
10. Prepare a post-closing trial balance.
Income Statement
Balance Sheet
11 Cash
31 Kelly Pitney, Capital
12 Accounts Receivable
32 Kelly Pitney, Drawing
14 Supplies
33 Income Summary
15 Prepaid Rent
41 Fees Earned
16 Prepaid Insurance
51 Salary Expense
18 Office Equipment
52 Rent Expense
19 Accumulated Depreciation
53 Supplies Expense
21 Accounts Payable
54 Depreciation Expense
22 Salaries Payable
55 Insurance Expense
23 Unearned Fees
59 Miscellaneous Expense
Explanation / Answer
Journal Entries:
Ledgers:
Adjusting Entries:
Date Accounts and Explanation Debit $ Credit $ May 3 Cash 3,550 Unearned fees 3,550 To reocrd unearned fees May 5 Cash 3,100 Accounts receivable 3,100 To record accounts receivable collected May 9 Miscellaneous expense 150 Cash 150 To record advertising expense paid May 13 Accounts payable 200 Cash 200 To record accounts payable paid May 15 Accounts receivable 5,350 Fee earned 5,350 To record service revenue earned Date Accounts and Explanation Debit Credit May 16 Salary Expense 850 Cash 850 To record salaries paid May 17 Cash 5,000 Fee earned 5,000 To record service revenue May 20 Supplies 1,500 Accounts payable 1,500 To record supplies purchased on account May 21 Accounts receivable 12,175 Fee earned 12,175 To record service revenue earned May 25 Cash 2,125 Fee earned 2,125 To record service revenue May 27 Cash 5,250 Accounts receivable 5,250 To record accounts receivable collected May 28 Salary Expense 850 Cash 850 To record salaries paid May 30 Miscellaneous expense 330 Cash 330 To record telephone expense May 30 Miscellaneous expense 290 Cash 290 To record electicity charges May 31 Cash 5,500 Accounts receivable 5,500 To record accounts receivable collected May 31 Accounts receivable 4,950 Fee earned 4,950 To record service revenue earned May 31 Withdrawals 7,000 Cash 7,000 To record withdrawals by ownerRelated Questions
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