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Q1) For past several years, Dawn Lytle has operated part-time consulting business from home. As of October 1, 2008, Dawn decided to move to rented quarters and to operate business, that was to be known as Sky's-The-Lijnit ConSultin & on full-time basis. 5kv The-Limit Consulting entered into given transactions during October


Oct. 1.


Following assets were received from Dawn Lytle: cash, $12,950; accounts receivable, $2,800; supplies, $1,500; and office equipment, $18,750. There were no liabilities received.


1 Paid three months' rent on a lease rental contract, $3,600. 
2 Paid the premiums on property and casualty insurance policies, $2,400. 
4 Received cash from clients as an advance payment for senaces to be provided and recorded it as unearned fees, $4,150. 
5 Purchased additional office equipment on account from Office Station Co.,$2,500. 
6 Received cash from clients on account, $1,900. 
10 Paid cash for a newspaper advertisement, $325. 
12 Paid Office Station Co. for part of the debt incurred on October 5, $1,250. 
12 Recorded services provided on account for the period October 1-12, $3,750. 
14 Paid part-time receptionist for two weeks' salary, $750. 
17 Recorded cash from cash clients for fees earned during the period October 1-17W $6,250. 
18 Paid cash for supplies, $600.
20 Recorded services provided on account for the period October 13-20, $2,100. 
24 Recorded cash from cash clients for fees earned for the period October 17-24, $3,850. 
26 Received cash from clients on account, $4,450. 
27 Paid part-time receptionist for two weeks' salary, $750. 
29 Paid telephone bifi for October, $250. 
31 Paid electricity bill for October, $300. 
31 Recorded cash from cash clients for fees earned for the period October 25-31, $2,975. 
31 Recorded services provided on account for the remainder of October, $1,500. 
31 Dawn withdrew $5,000 for personal use.




1. Journalize each transaction in two-column journal, referring to following chart of accounts in choosing accounts to be debited and credited. (Don't insert account numbers in the~ journal)


11 Cash  31 Dawn Lytle, Capital
12 Accounts Receivable  32 Dawn Lytle, 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 Depredation Expense
21 Accounts Payable  55 Insurance Expense
22 Salaries Payable  59 Miscellaneous Expense
23 Unearned Fees  


2. Post journal to ledger of four-column accounts.
3. Create unadjusted trial balance.
4. At the end of October, following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during October is $200.

b. Supplies on hand on October 31 are $875.

c. Depreciation of office equipment for October is $675.

d. Accrued receptionist salary on October 31 is $150.

e. Rent expired during October is $1,550.

f. Unearned fees on October 31 are $1,150.


5. Optional: Enter unadjusted trial balance on end-of-period spreadsheet (work sheet) and complete spreadsheet.
6. Journalize and post adjusting entries.
7. Create an adjusted trial balance.
8. Create an income statement, a statement of owner's equity, and a balance sheet.
9. Create and post the dosing 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.
10. Create a post-closing trial balance.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M922622

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