Kimmel, Financial Accounting, Be Help I System Announcements Accounting Cycle Re

Question

Kimmel, Financial Accounting, Be Help I System Announcements Accounting Cycle Revlew 4-4 (Part Level Submlssion) At 3une 30, 2017, the end of its most recent fscal year, Novak Computer Consultants post-closing trial balance was as follows $4,920 Accounts receilvable ,130 Accounts payable Uneamed service revenue Common stock Retained earnings $380 1,050 3,400 1,870 $6,700 $6,700 The company underwent a major expansion in July. New staff wes hired and more financing was obtsined. Novak conducted the foilowling transactions during July 2017, and adjusts its accounts monthly. July 1 Purchased equipment, paying s4,000 cash and signing a 2-year note payable for $18,800. The equipment has a 4-year usetul tife. The note has a 6% interest rate which payable on the test day of each following month. 2 Issued 18,900 shares of common stock for $47,000 cash 3 Paid $3,600 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 omice space for $3,800 per month 6 Paid $3,600 for suples Visited clent omces and agreed on the tenns of a caraubng propect. vak wgl ba the client, Connor Productions, on the 20m or each month for 9 services performed 10 Collected $1,130 cash on account from Milani Brothers. This client was biled in June when Novak performed the service. 13 Performed services for Fitzgerald Enterpnises. Ths cient paid $1,050 in advance last month. All services relating to this payment are now compieted. 14 Paid 5380 cash for a utility bit. This related to June utinies that were accrued at the end of June 16 Met with a new client, Thunder Bay Technologies. Received $11,300 cash in advance for future services to be performed. 18 Paid semi-monthly salaries for $10,300 20 Performed services worth $26,300 en account and billed oustomers 20 Received a bil nor S2, 100 fo·advertising services received during July. The amount s not due unti August 15. 23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $9,400 of revenue from the cash advance received July 16. 27 Received $14,100 cash from customers billed on July 20 Adjustment data

Explanation / Answer

Novak Computer Consultant Prepaid Insurance Date/S.N. Account title & Explanation Debit Credit Jul-03 3600 Jul-31 300 Amount in $ Amount in $ July-31 Bal 3300 1 July 31, 2017 Insurance 300 Prepaid Insurance 300 To record the adjusting entry for insurance 2 July 31, 2017 Rent 3800 Supplies Prepaid Rent 3800 July1 Bal 650 Jul-31 1200 To record the adjusting entry for Rent Jul-06 3600 July 31 Bal 3050 3 July 31, 2017 Supplies Expense 1200 Prepaid Rent Supplies 1200 Jul-03 7600 Jul-31 3800 To record the adjusting entry for supplies July 31 Bal 3800 4 July 31, 2017 Depreciation on Equipment 475 Accumulated Depreication-Equipment Accumulated depreciation on equipment 475 Jul-31 475 To record the adjusting entry for depreciation July 31 Bal 475 5 July 31, 2017 Interest Expense 94 Interest Payable 94 To record the adjusting entry for interest payable on Notes Accounts Payable Jul-14 380 July 1 Bal 380 6 July 31, 2017 Salaries & Wages expense 10300 Jul-20 2100 Salaries & Wages Payable 10300 Jul-31 750 To record the adjusting entry for salaries & wages payable July 31 Bal 2850 7 July 31, 2017 Utilities Expense 750 Interest Payable Accounts Payable 750 Jul-31 94 To record the adjusting entry for utilities expense payable July 31 Bal 94 8 July 31, 2017 Income Tax expense 1130 Salaries & Wages payable Income tax payable 1130 Jul-31 10300 To record the adjusting entry for income tax payable July 31 Bal 10300 Income Taxes Payable Jul-31 1130 July 31 Bal 1130 Salaries & Wages Jul-18 10300 Jul-31 10300 July 31 Bal 20600 Rent Expense Jul-31 3800 July 31 Bal 3800 Supplies Expense Jul-31 1200 July 31 Bal 1200 Utilities expense Jul-31 750 July 31 Bal 750 Depreciation expense Jul-31 475 July 31 Bal 475 Insurance expense Jul-31 300 July 31 Bal 300 Interest expense Jul-31 94 July 31 Bal 94 Income tax expense Jul-31 1130 July 31 Bal 1130

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