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Sara Keith S and K Consulting

Price: $19.99


For the past several years, Sara Keith has operated a part-time consulting business from her home.  As of June 1, 2011, Sara decided to move to rented quarters and to operate the business, which was to be known as S&K Consulting, on a full-time basis.  S&K Consulting entered into the following transactions during June:

June 1                     The following assets were received from Sara Keith: cash, $20,000; accounts receivable, $4,500; supplies, $2,000; and office equipment, $11,500.  There were no liabilities received.
June  1                    Paid three month’s rent on a lease contract, $6,000.
June  2                    Paid the annual premiums on property and casualty insurance policies, $2,400.
June 4                     Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700.
June  5                    Purchased additional office equipment on account, $3,500.
June  6                    Received cash from clients on account, $3,000.
June 10                   Paid cash for a newspaper advertisement, $200.
June 12                   Paid for part of the debt incurred on June 5, $750.
June 12                  Recorded services provided on account for the period June 1-12, $5,100.
June 14                  Paid part-time receptionist for two weeks’ salary, $1,100.
June 17                  Recorded cash from clients for fees earned for the period June 1-16, $6,500.
June 18                  Paid cash for supplies, $750.
June 20                  Recorded services provided on account for the period June 13-20, $3,100.
June 24                  Recorded cash from cash clients for fees earned for the period June 17-24, $5,150.
June 26                  Received cash from clients on account, $6,900.
June 27                  Paid part-time receptionist for two weeks’ salary, $1,100.
June 29                  Paid telephone bill for June, $150.
June 29                  Paid electricity bill for June, $400.
June 30                  Recorded cash from cash clients for fees earned for the period June 25-30, $2,500.
June 30                  Recorded services provided on account for the remainder of June, $1,100.
June 30                  Sara withdrew $5,000 for personal use.

Instructions:

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.

11   Cash                                                          31   Sara Keith, Capital
12   Accounts Receivable                                 32   Sara Keith, Withdrawals
                                    14   Supplies                                         41   Service Revenue
                                    15   Prepaid Rent                                  51   Salary Expense
                                    16   Prepaid Insurance                          52   Rent Expense
                                    18   Office Equipment                          53   Supplies Expense
                                    19   Accumulated Depreciation            54   Depreciation Expense
                                    21   Accounts Payable                          55   Insurance Expense
                                    22   Salaries Payable                             59   Miscellaneous Expense
                                    23   Unearned Service Revenue

2      2.  Open T-accounts and post the journal entries to the T-accounts.

3      3.   Complete a worksheet at end of June using the following adjustment data:

a.     Insurance expired during June is $200.
b.     Supplies on hand on June 30 are $650.
c.     Depreciation of office equipment for June is $250.
d.     Accrued receptionist salary on June 30 is $220.
e.     Rent expired during June is $2,000.
f.      Unearned service revenue on June 30 is $1,875.

         4.  Prepare an income statement, a statement of owner’s equity and a balance sheet. 

   5. Journalize and post the adjusting entries. 

         6. Journalize and post the closing entries. 

   7.  Compute final balances in each T-account

   8.  Prepare the post-closing trial balance. 

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