Complete accounting cycle
Complete accounting cycle
ORDER A PLAGIARISM FREE PAPER NOW
PR 4-6A **BOLD ARE DATES AND BOLD WITH ITALIC ARE INSTRUCTIONS
Complete accounting cycle
✔ 8. Net income:
$16,455
For the past several years, Emily Page has operated a part-time consulting business
from her home. As of June 1, 2010, Emily decided to move to rented quarters and to
operate the business, which was to be known as Bottom Line Consulting, on a full-time
basis. Bottom Line Consulting entered into the following transactions during June:
June 1. The following assets were received from Emily Page: cash, $20,000; accounts
receivable, $4,500; supplies, $2,000; and office equipment, $11,500. There were
no liabilities received.
- Paid three months’ rent on a lease rental contract, $6,000.
- Paid the premiums on property and casualty insurance policies, $2,400.
- Received cash from clients as an advance payment for services to be provided
and recorded it as unearned fees, $2,700.
- Purchased additional office equipment on account from Office Depot Co.,
$3,500.
- Received cash from clients on account, $3,000.
- Paid cash for a newspaper advertisement, $200.
- Paid Office Depot Co. for part of the debt incurred on June 5, $750.
June 12. Recorded services provided on account for the period June 1–12, $5,100.
- Paid part-time receptionist for two weeks’ salary, $1,100.
- Recorded cash from cash clients for fees earned during the period June1–16, $6,500.
- Paid cash for supplies, $750.
- Recorded services provided on account for the period June 13–20, $3,100.
- Recorded cash from cash clients for fees earned for the period June 17–24,$5,150.
- Received cash from clients on account, $6,900.
- Paid part-time receptionist for two weeks’ salary, $1,100.
- Paid telephone bill for June, $150.
- Paid electricity bill for June, $400.
- Recorded cash from cash clients for fees earned for the period June 25–30,$2,500.
- Recorded services provided on account for the remainder of June, $1,000.
- Emily withdrew $5,000 for personal use.
Instructions
- Journalize each transaction in a two-column journal, referring to the following chart
of accounts in selecting the accounts to be debited and credited. (Do not insert the
account numbers in the journal at this time.)
11 Cash 31 Emily Page, Capital
12 Accounts Receivable 32 Emily Page, Drawing
14 Supplies 41 Fees Earned
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Fees
- Post the journal to a ledger of four-column accounts.
- Prepare an unadjusted trial balance.
- At the end of June, the following adjustment data were assembled. Analyze and
use these data to complete parts (5) and (6).
- Insurance expired during June is $200.
- Supplies on hand on June 30 are $650.
- Depreciation of office equipment for June is $250.
- Accrued receptionist salary on June 30 is $220.
- Rent expired during June is $2,000.
- Unearned fees on June 30 are $1,875.
- Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet (work
sheet) and complete the spreadsheet.
- Journalize and post the adjusting entries.
- Prepare an adjusted trial balance.
- Prepare an income statement, a statement of owner’s equity, and a balance sheet.
- Prepare and post the closing entries. (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.
Prepare a post-closing trial balance.
