Dancin Music\'s chart of accounts and the balances as of May 1, 2012 (all normal

Question

Dancin Music's chart of accounts and the balances as of May 1, 2012 (all normal balances), are as follows $5,700 C 1,000 o 350 $ 9,160 1,350 11 cash 12 Accounts Receivable 14 Supplies 15 Prepaid Insurance 17 Office Equipment 21 Accounts Payable 41 Revenues 50 Wages Expense 51 Office Rent Expense 52 E 53 Utilities Expense 54 Music Expense tReqtal Expense 800 1.340 23 Unearned Revenue 31 Capital Stock (All Common) 33 Dividends 10,000 56 Supplies Expense 150 . 1. Enter the May 1, 2012 Accounts balances in the appropriate balance column of a four-column account. Write balance in ttem column, and post a check (V) in the Posting reference Column Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with 2. Analyze and journalize each transaction in a two-column journal, (Do not insert the account Numbers in the journal at this time.) Journal entry explanations may be omitted. 3. Post t he journal to a four-column ledger, extending the account balance to the appropriate Balance column after each posting 4. Prepare an unadjusted trial balance for May 31, 2012. The data needed to determine adjustments for the two-month period ending May 31, 2012, are During May, Dancin Music provided guest disk jockeys for KPRG for a total of 11s a. hours. For information on the amount of the accrued revenue to be billed to KRPG. sec the contract described in May 3, 2012. Supplies on hand at May 31, $160. T b. he balance of the prepaid insurance account relates to the May 1, 2012. c. d. Depreciation of the office equipment is $100. The balance of the revenue account relates to the contract between Dancin Music and e. KPRG, described in the May 3, 2012. . Accrued wages as of May 31, 2012, were $200 g. Enter the unadjusted trial balance on a worksheet. h. Prepare adjusting journal entries. You will need the following additional accounts: 18 Accumulated Depreciation Office Equipment 22 Wages Payable 57 Insurance Expense 58 Depreciation Expense i. j. Post the adjusting entries, inserting balances in the accounts affected. Prepare an adjusted trial balance

Explanation / Answer

Dancin Music General journal for the month of May 2012 Date Account title Debit Credit May.1 Cash 2500 Capital stock 2500 May.1 Rent expense 1600 Cash 1600 May.1 Prepaid insurance 3360 Cash 3360 May.2 Cash 1350 Accounts receivable 1350 May.3 Cash 4800 Unearned revenue 4800 May.3 Accounts payable 250 Cash 250 May.4 Miscellaneous expense 300 Cash 300 May.5 Office equipment 5000 Accounts payable 5000 May.8 Advertising expense 180 Cash 180 May.11 Cash 750 Revenues 750 May.13 Equipment rental expense 500 Cash 500 May.14 Wages expese 1000 Cash 1000 May.16 Cash 1500 Revenues 1500 May.18 Supplies 750 Accounts payable 750 May.21 Music expenses 325 Cash 325 May.22 Advertising expense 800 Cash 800 May.23 Cash 750 Accounts receivable 1750 Revenues 2500 May.27 Utilities expense 560 Cash 560 May.28 Wages expese 1000 Cash 1000 May.29 Miscellaneous expense 150 Cash 150 May.30 Cash 400 Accounts receivable 1100 Revenues 1500 May.31 Cash 2800 Revenues 2800 May.31 Music expenses 900 Cash 900 May.31 Dividend 1000 Cash 1000 Dancin Music Adjusting journal entries for the month of May 2012 Date Account title Debit Credit May.31 Unearned revenue 3800 Revenues 3800 May.31 Supplies expense 760 Supplies 760 May.31 Insurance expense 280 Prepaid insurance 280 May.31 Depreciation expense 100 Accumulated depreciation - office equipment 100 May.31 Wages expense 200 Wages payable 200 Unearned revenue adjustment Total hours of service provided 115 Revenue for 80 hours 2400 Revenue for balance 35 hours 1400              (@ $40 per hour) Total adjustment 3800 Supplies expense Ledger balance 920 Supplies on hand on May 31 160 Supplies expense 760 Insurance expense Premium paid for one year 3360 Insruance expense for 1 month 280 Dancin Music Trial balance for May 2012 Account Opening Transactions Unadjusted Debit credit Debit credit Debit credit Cash 9160 14850 11925 12085 Accounts receivable 1350 2850 1350 2850 Supplies 170 750 920 Prepaid insurance 3360 3360 Office equipment 5000 5000 Accounts payable 250 250 5750 5750 Unearned revenue 4800 4800 Capital stock 10000 2500 12500 Dividends 300 1000 1300 Revenues 5700 9050 14750 Wages expense 400 2000 2400 Office rent expense 1000 1600 2600 Equipment rental expense 800 500 1300 Utilities expense 350 560 910 Music expense 1340 1225 2565 Advertising expense 750 980 1730 Supplies expense 180 180 Miscellaneous expense 150 450 600 Accumulated depreciation - office equipment Wages payable Insurance expense Depreciation expense 15950 15950 35375 35375 37800 37800 Dancin Music Trial balance for May 2012 Account Opening Transactions Unadjusted Debit credit Debit credit Debit credit Cash 9160 14850 11925 12085 Accounts receivable 1350 2850 1350 2850 Supplies 170 750 920 Prepaid insurance 3360 3360 Office equipment 5000 5000 Accounts payable 250 250 5750 5750 Unearned revenue 4800 4800 Capital stock 10000 2500 12500 Dividends 300 1000 1300 Revenues 5700 9050 14750 Wages expense 400 2000 2400 Office rent expense 1000 1600 2600 Equipment rental expense 800 500 1300 Utilities expense 350 560 910 Music expense 1340 1225 2565 Advertising expense 750 980 1730 Supplies expense 180 180 Miscellaneous expense 150 450 600 Accumulated depreciation - office equipment Wages payable Insurance expense Depreciation expense 15950 15950 35375 35375 37800 37800 Dancin Music Closing journal entries for the month of May 2012 Date Account title Debit Credit May.31 Reveues 18550 Wages expense 2600 Office rent expense 2600 Equipment rental expense 1300 Utilities expense 910 Music expense 2565 Advertising expense 1730 Supplies expense 940 Miscellaneous expense 600 Insurance expense 280 Depreciation expense 100 Income summary 4925 18550 18550 Dancin Music Income statement for the year ended May 31, 2012 Revenues 18550 Less: Expenses Wages expense 2600 Office rent expense 2600 Equipment rental expense 1300 Utilities expense 910 Music expense 2565 Advertising expense 1730 Supplies expense 940 Miscellaneous expense 600 Insurance expense 280 Depreciation expense 100 Total expenses 13625 Net income 4925 Dancin Music Statement of retained earnings for the year month May 31, 2012 Beginning balance as on May 1 0 Net income for the period 4925 Dividend paid -1300 Ending balance as at May 31 3625 Dancin Music Balance sheet as at May 31, 2012 Assets Cash 12085 Accounts receivable 2850 Supplies 160 Prepaid insurance 3080 Office equipment 5000 Accumulated depreciation -100 4900 Total assets 23075 Liabilities and equity Accounts payable 5750 Wages payable 200 Unearned revenue 1000 Capital stock 12500 Retained earnings 3625 Totalliabilities and equity 23075

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