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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

During 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 Provide general journal entries in general journal form for the above transactions

Part A2 Create a trial balance at July 31 fully taking into account the beginning balances and the general 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 N/P for the month is $418 (hint: don’t increase the principal of the note)

f. Estimated expenditures for the month is $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 Provide adjusting journal entries, in general journal form, for the above

Part B2 Create an adjusted trial balance

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

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

Part B5 Provide closing entries in general journal form

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M91682

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