Comprehensive Problem Inc.

                                      Trial Balance

                                     June 30, 2012

Cash                                                    $ 18,470                  

A/R                                                         14,333                                                                                 

Advertising Supplies                               3,998

Prepaid Insurance                                  23,137

Equipment                                           135,495

A/D - Equipment                                                                 $19,207

Accounts Payable                                                                  11,998

Unearned Service Revenue                                                  14,336

Notes Payable                                                                       62,679

Common Stock                                                                     67,546

Retained Earnings                                                                 19,667 

Totals                                              $195,433                  $195,433

In the month of July, the following occurred:

July 2       received $8,127 of the prior month's receivables

July 3       paid $5,220 of the prior month's accounts payable and paid $3,200 for July rent

July 5       earned $6,736 worth of the prior month's unearned revenue

July 6       provided a service and billed the client $3,376

July 9       bought advertising supplies for $2,217 on account

July 10     received $4,200 for a service to be provided

July 11     provided a service and billed the client $7,366

July 12     collected $9,127 of receivables

July 13     paid $7,500 of the notes payable

July 16     bought advertising supplies for $1,189 cash

July 18     provided a service and billed the client $4,934

July 20     received $2,700 for a service to be provided    

July 23     paid $4,223 travel expense (all for July travel)

July 24     paid $2,400 of accounts payable

July 25     paid temporary employees $3,356 of wages (all for July work)

July 26     paid $5,000 of the notes payable

July 27     paid the shareholder a $3,000 dividend

July 30     provided a service fully earning the $4,200 from July 10

July 31     paid the shareholder a $4,500 dividend

Required - Part A

Part A1  Prepare general journal entries in general journal form for the above transactions

Part A2 Prepare a trial balance at July 31 fully taking into account the beginning balances and the journal entries recorded in part A1 (t-accounts are recommended for key accounts; do not hand them in t-accounts)

Adjusting Entry Information

a. the insurance expires at a rate of $1,218 per month

b. a month-end count reveals about $2,400 of advertising supplies remain on-hand

c. annual depreciation (straight-line is used) is $19,356

d. a thorough analysis reveals only $3,200 of the unearned revenue is not yet earned at month-end

e. the interest on the N/P for the month is $418 (hint: don't increase the principal of the note)

f. estimated expenses for the month are $2,100 utilities and $800 telephone

g. a bank reconciliation reveals that a $4,000 payment from a client (A/R) was not recorded

Required - Part B

Part B1 Give adjusting journal entries, in general journal form, for the above

Part B2 Prepare an adjusted trial balance

Part B3 Prepare an income statement and a statement of retained earnings for the month of July

Part B4 Prepare a balance sheet at 7/31/12

Part B5 Give closing entries in general journal form