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, Sheffield Computer Consultants’ post-closing trial balance was as follows:

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Sheffield conducted the following transactions during July 2017, and adjusts its accounts monthly.

Adjustment data:

The chart of accounts for Sheffield Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, Supplies Expense, and Utilities Expense.

Prepare a classified balance sheet at July 31.

Debit Credit Cash $5,650 Accounts receivable 1,300 Supplies 750 Accounts payable $430 Unearned service revenue 1,210 Common stock 3,900 Retained earnings 2,160 $7,700 $7,700 (a) Your answer is correct. Enter the July 1 balances in the ledger accounts Cash July 1 Bal. 5650 Accounts Receivable July 1 Bal. 1300 Supplies July 1 Bal. 750 Accounts Payable uly 1 Bal. 430 Unearned Service Revenue uly 1 Bal. 1210 Common Stock 3900 July 1 Bal. Retained Earnings July 1 Bal. 2160

Explanation / Answer

Date Account title and explanation Debit Credit Jul-01 Equipment $26400 Cash $4,800 Note payable $21,600 ( to record purchase of equipment) Balance sheet $ $ Assets Current Asset Cash            56,720 Account Receivable            14,000 Prepaid insurance               3,300 Suppliers               3,500 Prepaid rent               4,300 Total current asset      81,820 Non current Asset Equipment            26,400 Less : Accumulated Depreciation                 -550 Total Non current Asset      25,850 Total Asset 1,07,670 Liabilities and Net worth Current Liability Account payable               3,260 Interest payable                  108 Salaries and wages payable            11,900 Income tax payable               1,300 Unearned service revenue               2,200 Notes payable            21,600 Total current liability      40,368 Owners Equity and Net worth Common stock            57,900 Retained Earnings               9,402 Total owners Equity      67,302 Total Liabilities and Net worth 1,07,670

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