2009-04-17_160040_kelly

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Kelly pitney began her consulting business, Kelly Consulting, on April 1, 2010. The accounting cylcle for Kelly Consulting for April ,including financial statements was illistrated on page 157-168. During May, kelly consulting entered the following transactions:May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,500.

5. Received cash from clients on account, $1,750.9. Paid cash for a newspaper advertisement, $300.13. Paid office station company for part of the debt incurred on april 5, $400.15. Recorded services provided on account for the period May 1-15, $6,100.16. paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750.17. Recorded cash from cash clients for fees earned during the period May 1-16, $8,200.20. Purchased supplies on account, $40021. Recorded services provided on account for the period May 16-20, $3,900.25. Recorded cash from cash clients for fees earned for the period May 17-23, $5,100.27. Recieved cash from clients on account, $9,500.

28. Paid part-time receptionist for two weeks salary, $750.30. Paid telephone bill for May, $120.31. Paid electricity bill for May $290.31. Recorded cash from cash clients for fees earned for the period May 26-31, $3,875.31. Recorded services provided on account for the remainder of May, $3,200.31. Kelly withdrew $8,000 for personal use. Pg. 158 Chart of Accounts:

April 1. The following assets were recieved from Kelly Pitney: Cash, $13,100; Accounts receivable, $3,000; Supplies, $1,400; and officeequipment, $12,500. there were no liabilities recieved.

1. Paid three months rent on a lease rental contract, $4,800.2. Paid the premiums on property and casualty insurance policies, $1,800.4. Recieved cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000.5. Purchased additional office equipment on account from Office Station Co., $2,000.6. Recieved cash from clients on account, $1,800.10. Paid cash for a newspaper advertisement, $120.12. paid Office Station Co. for part of the debt incurred on April 5, $1,200.12. Recorded services provided on account for the period April 1-12, $4,200.



14. Paid part-time receptionist for two weeks' salary, $750.17. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250.18. Paid cash for supplies, $800.

20. Recorded services provided on account for the period April 13-20, $2,100.24. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850.26. Recieved cash from clients on account, $5,600.27. Paid part-time receptionist for two weeks' salary, $750.29. Paid telephone bill for April, $130.30. paid electricity bill for April, $200.30. Recorded cash from clients for fees earned for the period April 25-30, $3,050.30. Recorded services provided on account for the remainder of April, $1,500.30. kelly withdrew $6,000 for personal use.

Pg. 166 Post-closing trial balanceDebit Creditcash................................22,100Accounts receivable.......3,400Supplies...........................1,350Prepaid rent......................3,200Prepaid insurance.............1,500office equipment...............14,500Accumualted depreciation.. 330Accounts payable.............. 800

Salaries Payable.............. 120Unearned Fees................ 2,500kelly pitney, Capital.......... 42,30046,050 46,050 Instructions:

1. The chart of accounts for Kelly Consulting is shown on page 158, and the post-closing trail balance as of April 30, 2010 is shown on page166. 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, 2010, and place a check mark in the posting referece column. Journalize each of the May transactions in a two column journal 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 trail balance4. 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 $600.c. Depreciation of office equipment for May is $330.d. Accrued receptionist salary on May 31 is $240.e. Rent expired during May is $1,600.f. Unearned fees on May 31 are $2,0005. Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet.6. Journalize and post the adjusting entries.

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. (Income summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting aline in both the Balance columns opposite the closing entry.10. Prepare a post-closing trial balance

COMPREHENSIVE PROBLEM 1

1. and 2. JOURNAL Pages 5 and 6

Post.

Date Description Ref. Debit Credit

2010

May 3 Cash....................................................................... 11 2,500

Unearned Fees................................................ 23 2,500

5 Cash....................................................................... 11 1,750



Accounts Receivable...................................... 12 1,750

9 Miscellaneous Expense........................................ 59 300

Cash................................................................ 11 300

13 Accounts Payable................................................. 21 400

Cash................................................................ 11 400

15 Accounts Receivable............................................ 12 6,100

Fees Earned.................................................... 41 6,100

16 Salary Expense..................................................... 51 630

Salaries Payable................................................... 22 120

Cash................................................................ 11 750

17 Cash....................................................................... 11 8,200

Fees Earned.................................................... 41 8,200

20 Supplies................................................................. 14 400

Accounts Payable... ............ ............ ........... ... .. 21 400

21 Accounts Receivable............................................ 12 3,900

Fees Earned.................................................... 41 3,900

25 Cash....................................................................... 11 5,100

Fees Earned.................................................... 41 5,100

27 Cash....................................................................... 11 9,500

Accounts Receivable...................................... 12 9,500

28 Salary Expense..................................................... 51 750

Cash................................................................ 11 750


Cash................................................................ 11 120




Cash................................................................ 11 290

31 Cash....................................................................... 11 3,875

Fees Earned.................................................... 41 3,875

1. and 2. JOURNAL Pages 5 and 6

Post.

Date Description Ref. Debit Credit

2010

May 31 Accounts Receivable............................................ 12 3,200

Fees Earned.................................................... 41 3,200

31 Kelly Pitney, Drawing......................................... 32 8,000

Cash................................................................ 11 8,000

2., 6., and 9.

Cash 11

Post. Balance

Date Item Ref. Dr. Cr. Dr. Cr.

2010

May 1 Balance........................ ü ............... ............... 22,100 ...............

3 ..................................... 5 2,500 ............... 24,600 ...............

5 ..................................... 5 1,750 ............... 26,350 ...............9 ..................................... 5 ............... 300 26,050 ...............

13 ..................................... 5 ............... 400 25,650 ...............

16 ..................................... 5 ............... 750 24,900 ...............

17 ..................................... 6 8,200 ............... 33,100 ...............

25 ..................................... 6 5,100 ............... 38,200 ...............

27 ..................................... 6 9,500 ............... 47,700 ...............

28 ..................................... 6 ............... 750 46,950 ...............



30 ..................................... 6 ............... 120 46,830 ...............

31 ..................................... 6 ............... 290 46,540 ...............

31 ..................................... 6 3,875 ............... 50,415 ...............

31 ..................................... 6 ............... 8,000 42,415 ...............

Accounts Receivable 12

2010

May 1 Balance........................ ü ............... ............... 3,400 ...............

5 ..................................... 5 ............... 1,750 1,650 ...............

15 ..................................... 5 6,100 ............... 7,750 ...............

21 ..................................... 6 3,900 ............... 11,650 ...............

27 ..................................... 6 ............... 9,500 2,150 ...............

31 ..................................... 6 3,200 ............... 5,350 ...............

Supplies 14

2010

May 1 Balance........................ ü ............... ............... 1,350 ...............

20 ............ .. .. ... ... .. ... ... .. ... .. 6 400 ........ ....... 1,750 ........... ....

31 Adjusting... ... ... ... .. .. .. .. 7 ..... .......... 1,150 600 ........... ....

Prepaid Rent 15

Post. Balance


2010

May 1 Balance........................ ü ............... ............... 3,200 ...............

31 Adjusting... ... ... ... .. .. .. .. 7 ..... .......... 1,600 1,600 ........... ....

Prepaid Insurance 16



2010

May 1 Balance........................ ü ............... ............... 1,500 ...............

31 Adjusting... ... ... ... .. .. .. .. 7 ..... .......... 300 1,200 ........... ....

Office Equipment 18

2010

May 1 Balance........................ 5 ............... ............... 14,500 ...............

Accumulated Depreciation 19

2010

May 1 Balance........................ ü ............... ............... ............... 330

31 Adjusting............. .... ... 7 ............... 330 ............... 660

Accounts Payable 21

2010

May 1 Balance........................ ü ............... ............... ............... 800

13 ............ .. .. ... ... .. ... ... .. ... .. 5 400 ........ ....... ........ ....... 400

20 ............ .. .. ... ... .. ... ... .. ... .. 6 ..... .......... 400 ........ ....... 800

Salaries Payable 22

2010May 1 Balance........................ ü ............... ............... ............... 120

16 ............ .. .. ... ... .. ... ... .. ... .. 5 120 ........ ....... ........ ....... —

31 Adjusting............. .... ... 7 ............... 240 ............... 240

Unearned Fees 23

2010



May 1 Balance........................ ü ............... ............... ............... 2,500

3 ..................................... 5 ............... 2,500 ............... 5,000

31 Adjusting... ... ... ... .. .. .. .. 7 3,000 ........ ....... ........ ....... 2,000

Kelly Pitney, Capital 31

Post. Balance


2010

May 1 Balance........................ ü ............... ............... ............... 42,300

31 Closing........................ 8 ............... 27,665 ............... 69,965

31 Closing........................ 8 8,000 ............... ............... 61,965

Kelly Pitney, Drawing 32

2010

May 31 ..................................... 6 8,000 ............... 8,000 ...............

31 Closing........................ 8 ............... 8,000 — —

Income Summary 33

2010

May 31 Closing........................ 8 ............... 33,375 ............... 33,375

31 Closing........................ 8 5,710 ............... ............... 27,665

31 Closing........................ 8 27,665 ............... — —

Fees Earned 41

2010

May 15 ..................................... 5 ............... 6,100 ............... 6,100

17 ..................................... 6 ............... 8,200 ............... 14,300

21 ..................................... 6 ............... 3,900 ............... 18,200



25 ..................................... 6 ............... 5,100 ............... 23,300

31 ..................................... 6 ............... 3,875 ............... 27,175

31 ..................................... 6 ............... 3,200 ............... 30,375

31 Adjusting.................... 7 ............... 3,000 ............... 33,37531 Closing........................ 8 33,375 ............... — —

Salary Expense 51

2010

May 16 ............ .. .. ... ... .. ... ... .. ... .. 5 630 ........ ....... 630 ........... ....

28 ............ .. .. ... ... .. ... ... .. ... .. 6 750 ........ ....... 1,380 ........... ....

31 Adjusting... ... ... ... .. .. .. .. 7 240 ........ ....... 1,620 ........... ....

31 Closing........................ 8 ............... 1,620 — —

Rent Expense 52

Post. Balance


2010

May 31 Adjusting... ... ... ... .. .. .. .. 7 1,600 ........ ....... 1,600 ........... ....

31 Closing........................ 8 ............... 1,600 — —

Supplies Expense 53

2010

May 31 Adjusting... ... ... ... .. .. .. .. 7 1,150 ........ ....... 1,150 ........... ....

31 Closing........................ 8 ............... 1,150 — —

Depreciation Expense 54

2010



May 31 Adjusting............. .... ... 7 330 ............... 330 ...............

31 Closing........................ 8 ............... 330 — —

Insurance Expense 55

2010

May 31 Adjusting............. .... ... 7 300 ............... 300 ...............

31 Closing........................ 8 ............... 300 — —

Miscellaneous Expense 59

2010

May 9 ............ .. .. ... ... .. ... ... .. ... .. 5 300 ........ ....... 300 ........... ....

30 ............ .. .. ... ... .. ... ... .. ... .. 6 120 ........ ....... 420 ........... ....

31 ............ .. .. ... ... .. ... ... .. ... .. 6 290 ........ ....... 710 ........... ....31 Closing........................ 8 ............... 710 — —

3.

KELLY CONSULTING

Unadjusted Trial Balance

May 31, 2010

Debit Credit

Balances Balances

Cash................................................................................................... 42,415

Accounts Receivable........................................................................ 5,350

Supplies............................................................................................. 1,750

Prepaid Rent..................................................................................... 3,200

Prepaid Insurance............................................................................ 1,500

Office Equipment............................................................................. 14,500



Accumulated Depreciation.............................................................. 330

Accounts Payable............................................................................. 800

Salaries Payable...............................................................................

Unearned Fees.................................................................................. 5,000Kelly Pitney, Capital........................................................................ 42,300

Kelly Pitney, Drawing...................................................................... 8,000

Fees Earned...................................................................................... 30,375

Salary Expense................................................................................. 1,380

Rent Expense....................................................................................

Supplies Expense..............................................................................

Depreciation Expense......................................................................

Insurance Expense...........................................................................

Miscellaneous Expense.................................................................... 710

78,805 78,805

5.

A B C D E F G H I J K L M



KELLY CONSULTING

End-of-Period Spreadsheet (Work Sheet)

For the Month Ended May 31, 2010

Unadjusted Adjusted Income Balance

Trial Balance Adjustments Trial Balance Statement Sheet

Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.

1 Cash 42,415 42,415 42,415 1

2 Accounts Receivable 5,350 5,350 5,350 2

3 Supplies 1,750 (b) 1,150 600 600 3

4 Prepaid Rent 3,200 (e) 1,600 1,600 1,600 4

5 Prepaid Insurance 1,500 (a) 300 1,200 1,200 56 Office Equipment 14,500 14,500 14,500 6

7 Accum. Depreciation 330 (c) 330 660 660 7

8 Accounts Payable 800 800 800 8

9 Salaries Payable (d) 240 240 240 9

10 Unearned Fees 5,000 (f) 3,000 2,000 2,000 10

11 Kelly Pitney, Capital 42,300 42,300 42,300 11

12 Kelly Pitney, Drawing 8,000 8,000 8,000 12

13 Fees Earned 30,375 (f) 3,000 33,375 33,375 1314 Salary Expense 1,380 (d) 240 1,620 1,620 14

15 Rent Expense (e) 1,600 1,600 1,600 15

16 Supplies Expense (b) 1,150 1,150 1,150 16

17 Depreciation Expense (c) 330 330 330 17

18 Insurance Expense (a) 300 300 300 18

19 Miscellaneous Expense 710 710 710 19



20 78,805 78,805 6,620 6,620 79,375 79,375 5,710 33,375 73,665 46,000 20

21 Net income 27,665 27,665 21

22 33,375 33,375 73,665 73,665 22

6. JOURNAL Page 7

Post.

Date Ref. Debit Credit

Adjusting Entries

2010

May 31 Insurance Expense............................................... 55 300

Prepaid Insurance..... ........... ... .. ... ... ... .. ... ... .. . 16 300

Insurance expired.

31 Supplies Expense.................................................. 53 1,150

Supplies........................................................... 14 1,150

Supplies used ($1,850 – $950).

31 Depreciation Expense.......................................... 54 330

Accumulated Depreciation........................... 19 330

Equipment depreciation.

31 Salary Expense..................................................... 51 240

Salaries Payable.......... ............ ........... ... ... .. ... . 22 240Accrued salaries.

31 Rent Expense........................................................ 52 1,600

Prepaid Rent.................................................. 15 1,600

Rent expired.

31 Unearned Fees...................................................... 23 3,000

Fees Earned.................................................... 41 3,000



Unearned fees ($4,050 – $1,300).

7.

KELLY CONSULTING

Adjusted Trial Balance

May 31, 2010

Debit Credit

Balances Balances

Cash................................................................................................... 42,415

Accounts Receivable........................................................................ 5,350

Supplies............................................................................................. 600Prepaid Rent..................................................................................... 1,600

Prepaid Insurance............................................................................ 1,200

Office Equipment............................................................................. 14,500

Accumulated Depreciation.............................................................. 660

Accounts Payable............................................................................. 800

Salaries Payable............................................................................... 240

Unearned Fees.................................................................................. 2,000

Kelly Pitney, Capital........................................................................ 42,300

Kelly Pitney, Drawing...................................................................... 8,000

Fees Earned...................................................................................... 33,375Salary Expense................................................................................. 1,620

Rent Expense.................................................................................... 1,600

Supplies Expense.............................................................................. 1,150

Depreciation Expense...................................................................... 330

Insurance Expense........................................................................... 300

Miscellaneous Expense.................................................................... 710

79,375 79,375



8.

KELLY CONSULTING

Income StatementFor the Month Ended May 31, 2010

Fees earned.................................................................................... $ 33,375

Expenses:

Salary expense....................................................................... $1,620

Rent expense.......................................................................... 1,600

Supplies expense.................................................................... 1,150

Depreciation expense............................................................ 330

Insurance expense................................................................. 300

Miscellaneous expense.......................................................... 710Total expenses.................................................................... 5,710

Net income..................................................................................... $ 27,665

KELLY CONSULTING

Statement of Owner’s Equity

For the Month Ended May 31, 2010

Kelly Pitney, capital, May 1, 2008............................................... $ 42,300

Net income for the month............................................................. $ 27,665

Less withdrawals........................................................................... 8,000

Increase in owner’s equity............................................................ 19,665

Kelly Pitney, capital, May 31, 2010............................................. $ 61,965

KELLY CONSULTING

Balance Sheet



May 31, 2010

Assets Liabilities

Current assets: Current liabilities:

Cash................................. $42,415 Accounts payable........ $ 800

Accounts receivable... .. .. 5,350 Salaries payable.. ..... .. .. 240

Supplies........................... 600 Unearned fees.............. 2,000

Prepaid rent........ ... ... .. ... . 1,600 Total liabilities.... ... .. . $ 3,040

Prepaid insurance......... . 1,200

Total current assets.. .. . $51,165

Property, plant, and Owner’s Equity

equipment:...................... Kelly Pitney,

Office equipment............ $14,500 capital........................... 61,965

Less accum. depr......... 660 13,840 Total liabilities and

Total assets......................... $ 65,005 owner’s equity............. $ 65,005

9. JOURNAL Page 8

Post.

Date Ref. Debit Credit

Closing Entries

2010

May 31 Fees Earned.......................................................... 41 33,375

Income Summary.......................................... 33 33,375

31 Income Summary................................................. 33 5,710

Salary Expense............................................... 51 1,620

Rent Expense.................................................. 52 1,600

Supplies Expense........................................... 53 1,150

Depreciation Expense.... ............ ........... ... ... .. . 54 330

Insurance Expense............. ............ ........... ... .. 55 300



Miscellaneous Expense.. ............ ........... ... ... .. . 59 710

31 Income Summary................................................. 33 27,665

Kelly Pitney, Capital..................................... 31 27,665

31 Kelly Pitney, Capital............................................ 31 8,000

Kelly Pitney, Drawing........... ...... ... ... ... .. ... ... . 32 8,000

10.

KELLY CONSULTING

Post-Closing Trial Balance

May 31, 2010

Debit CreditBalances Balances

Cash................................................................................................ 42,415

Accounts Receivable..................................................................... 5,350

Supplies ........................................................................................ 600

Prepaid Rent.................................................................................. 1,600

Prepaid Insurance......................................................................... 1,200

Office Equipment.......................................................................... 14,500

Accumulated Depreciation........................................................... 660

Accounts Payable.......................................................................... 800

Salaries Payable............................................................................ 240Unearned Fees............................................................................... 2,000

Kelly Pitney, Capital..................................................................... 61,965

Totals...................................................................................... 65,665 65,665

Documents

2009-04-17_160040_kelly