Jean Scholz owns and operates IT Consulting Services LLC. She began the company on October 1, 2016. The following is the November 30, 20016, unadjusted trial balance (IT Consulting adjusts their books quarterly) of IT Consulting Services LLC.
|
No.
|
Account Title
|
Debit
|
Credit
|
|
101
|
Cash
|
$38,264
|
|
|
106
|
Accounts receivable
|
12,618
|
|
|
126
|
Computer supplies
|
2,545
|
|
|
128
|
Prepaid insurance
|
2,220
|
|
|
131
|
Prepaid rent
|
3,300
|
|
|
163
|
Office equipment
|
8,000
|
|
|
164
|
Accumulated depreciation-Office equipment
|
|
$0
|
|
167
|
Computer equipment
|
20,000
|
|
|
168
|
Accumulated depreciation-Computer equipment
|
|
0
|
|
201
|
Accounts payable
|
|
0
|
|
210
|
Wages payable
|
|
0
|
|
236
|
Unearned computer services revenue
|
|
0
|
|
307
|
Common stock
|
|
73,000
|
|
318
|
Retained earnings
|
|
0
|
|
319
|
Dividends
|
5,600
|
|
|
403
|
Computer services revenue
|
|
25,659
|
|
612
|
Depreciation expense - Office equipment
|
0
|
|
|
613
|
Depreciation expense-Computer equipment
|
0
|
|
|
623
|
Wages expense
|
2,625
|
|
|
637
|
Insurance expense
|
0
|
|
|
640
|
Rent expense
|
0
|
|
|
652
|
Computer supplies expense
|
0
|
|
|
655
|
Advertising expense
|
1,728
|
|
|
676
|
Mileage expense
|
704
|
|
|
677
|
Miscellaneous expenses
|
250
|
|
|
684
|
Repairs expense-Computer
|
805
|
|
|
Totals
|
$98,659
|
$98,659
|
IT Consulting Services had the following transactions and events in December 20016.
|
Dec.
|
2
|
Paid $1,025 cash to Eastland Mall for IT Consulting Services' share of mall advertising costs for the month of December.
|
|
3
|
Paid $500 cash for minor repairs to the company's computer.
|
|
4
|
Received $3,950 cash from J&J CPAs, LLC.for a receivable from November.
|
|
10
|
Paid cash to Tom Jones for six days of work at the rate of $125 per day.
|
|
14
|
Notified by Northwind Safety Corp. that IT Consulting Services' bid of $7,000 on a proposed project has been accepted. Northwind paid a $1,500 cash advance to IT Consulting Services.
|
|
15
|
Purchased $1,100 of computer supplies on credit from Office Max.
|
|
16
|
Sent a reminder to Smiles Co. to pay the fee for services recorded last month.
|
|
20
|
Completed a project for Ron Hughes and received $5,625 cash.
|
|
28
|
Received $3,000 cash from The Mittler Co. on its receivable.
|
|
29
|
Reimbursed Julie Tate for business automobile mileage (600 miles at $0.32 per mile).
|
|
31
|
The company paid $1,500 cash in dividends.
|
The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months:
a) The December 31 inventory count of computer supplies shows $580 still available.
b) Three months have expired since the 12-month insurance premium was paid in advance.
c) As of December 31, Leah Newsome has not been paid for four days of work at $125 per day.
d) The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
e) The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
f) Three of the four months' prepaid rent has expired.
Required
1. Prepare journal entries to record each of the December transactions and events for IT Consulting Services. Post those entries to the accounts in the ledger (T-accounts acceptable).
2. Prepare adjusting entries to reflect a through f. Post those entries to the accounts in the ledger (T-accounts).
3. Prepare an adjusted trial balance as of December 31, 2016.
4. Prepare an income statement for the three months ended December 31, 2016.
Attachment:- Templates.rar