Requirements for Journal Entries and Closing Problem:
1. Journalize each transaction in a two column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited: (This should be your record/ledger of journal entries.)
|
Account Number
|
Account Name
|
|
11
|
Cash
|
|
12
|
Accounts Receivable
|
|
14
|
Supplies
|
|
15
|
Prepaid Rent
|
|
16
|
Prepaid Insurance
|
|
18
|
Office Equipment
|
|
19
|
Accumulated Deprecation
|
|
21
|
Accounts Payable
|
|
22
|
Salaries Payable
|
|
23
|
Unearned Fees
|
|
31
|
Steffy Lopez, Capital
|
|
32
|
Steffy Lopez, Drawing
|
|
41
|
Fees Earned
|
|
51
|
Salary Expense
|
|
52
|
Rent Expense
|
|
53
|
Supplies Expense
|
|
54
|
Depreciation Expense
|
|
55
|
Insurance Expense
|
|
59
|
Miscellaneous Expense
|
2. Post the journal to a ledger. This should be your record of each account and the transaction occurring within each account - similar to a T account or a T account format can be utilized.
3. Prepare an unadjusted trial balance.
4. At the end of July, the following adjustment data were assembled. Analyze and use the following data to complete parts (5) and (6).
a. Insurance expired during July is $375.
b. Supplies on hand on July 31 is $175.
c. Deprecation of office equipment for July is $750.
d. Accrued receptionist salary on July 31 is $175.
e. Rent expired during July is $2,400.
f. Unearned fees on July 31 are $2,750.
5. Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet.
6. Journalize and post the adjusting entries within the ledger for each account (See requirement 2 above) and also post the adjusting entries on the journal entries listing (See requirement 1 above.)
7. Prepare an adjusted trial balance.
8. Prepare an income statement, statement of owner's equity, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries within the ledger for each account (See requirement 2 above) and also post the adjusting entries on the journal entries listing (See Requirement 1 above.)
10. Prepare a post-closing trial balance.
Journal Entries and Closing Problem:
For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2015, Steffy decided to move to rented quarter and to operate the business, which was to be known as Diamond Consulting, on a full-time basis, Diamond Consulting entered into the following transactions during July:
As of July 1:
The following assets were received from Steffy Lopez:
|
Account
|
Amount
|
|
Cash
|
$13,500
|
|
Accounts Receivable
|
$20,800
|
|
Supplies
|
$3,200
|
|
Office Equipment
|
$7,500
|
|
No liabilities received
|
|
The following items occurred during the month of July:
|
Date During July
|
Transaction Detail
|
|
1
|
Paid two months' rent on lease rental contract, $4,800.
|
|
2
|
Paid the premiums on property and casualty insurance policies, $4,500.
|
|
4
|
Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
|
|
5
|
Purchased additional office equipment on account from Office Station Co., $6,500.
|
|
6
|
Received cash from clients on account, $15,300.
|
|
10
|
Paid cash for a newspaper advertisement, $400.
|
|
12
|
Paid Office Station Co. for part of the debt incurred on July 5, $5,200.
|
|
12
|
Recorded services provided on account for the period July 1 - 12, $13,300.
|
|
14
|
Paid receptionist for two weeks' salary, $1,750.
|
|
17
|
Recorded cash from cash clients for fees earned during the period July 1 - 17, $9,450.
|
|
18
|
Paid cash for supplies, $600.
|
|
20
|
Recorded services provided on account for the period July 13 - 20, $6,650.
|
|
24
|
Recorded cash from cash clients for fees earned for the period July 17 - 24, $4,000.
|
|
26
|
Received cash from clients on account, $12,000.
|
|
27
|
Paid receptionist for two weeks' salary, $1,750.
|
|
29
|
Paid telephone bill for July, $325.
|
|
31
|
Paid electricity bill for July, $675.
|
|
31
|
Recorded cash from cash clients for fees earned for the period July 25 - 31, $5,200.
|
|
31
|
Recorded services provided on account for the remainder of July, $3,000.
|
|
31
|
Steffy withdrew $12,500 for personal use.
|