In: Accounting
On April 1, 2018 Hippocrates Consulting began operations with the following beginning balances entered on April 1st as seen in the T-accounts below. First show each of the transactions described below as a journal entry including the date and then post each of the entries to the T-accounts below. After you have completed all of the entries as well as the adjusting entries prepare an Income Statement, Statement of Retained Earnings, and Balance Sheet for the month of April, 2018. Make sure that your statements presented in good form (points will be deducted if they are not in good form).
April 1: Paid three months’ rent on a lease rental contract, $4,800
2: Paid a six-month insurance premium for $1,800
4: Received cash from clients as an advance payment for services to be
provided and recorded as unearned fees, $5,000
5: Purchased additional office equipment on account from Office Station Co.,
$2,000.
6: Received cash from clients on account, $1,800.
10: Paid cash for a newspaper advertisement, $120
12: Paid Office Station Co. for part of the debt incurred on April 5, $1200.
12: Recorded services provided on account for the period April 1-12, $4,200.
14. Paid part-time receptionist for two weeks’ salary, $750.
17: Recorded cash from cash clients for fees earned during the period April
1-16, $6,250.
18: Paid cash for supplies, $800.
20: Recorded services provided on account for the period April 13-20, $2,100.
24: Recorded cash from cash clients for fees earned the period April
17-24, $3,850.
26: Received cash from clients on account, $5,600.
27: Paid part-time receptionist for two weeks’ salary, $750.
29: Paid telephone bill for April, $130.
30: Paid electricity bill for April, $200.
30: Recorded cash from cash clients for fees earned for the period April 25-30,
$3,050.
30: Recorded services provided on account for the remainder of April, $1,500.
30. A dividend of $6,000 was declared and paid.
The following are adjusting entries to be recorded on April 30th:
Accounts
Cash Receivable Supplies Prepaid Rent
--------------------- ------------------- -------------- ---------------
$13,100 $3,000 $1,400
Office Accumulated
Prepaid Insurance Equipment Depreciation
-------------------------- ------------------- -------------------
$12,500
Unearned
Accounts Payable Salaries Payable Fees Common Stock
----------------------- --------------------- ---------------- --------------------
$30,000
Retained Earnings Fees Earned Salary Expense Rent Expense
------------------------ ----------------- ---------------------- ------------------
Depreciation Miscellaneous
Supplies Expense Expense Insurance Expense Expense
----------------------- --------------------- ------------------------- -----------------
JE: | |||
Date | Account Title | Debit | Credit |
2018 | |||
Apr. 01 | Prepaid Rent | $ 4,800 | |
Cash | $ 4,800 | ||
2 | Prepaid Insurance | $ 1,800 | |
Cash | $ 1,800 | ||
4 | Cash | $ 5,000 | |
Unearned Fees | $ 5,000 | ||
5 | Office Equipment | $ 2,000 | |
Account Payable | $ 2,000 | ||
6 | Cash | $ 1,800 | |
Account Receivable | $ 1,800 | ||
10 | Misc. Expense | $ 120 | |
Cash | $ 120 | ||
12 | Account Payable | $ 1,200 | |
Cash | $ 1,200 | ||
12 | Account Receivable | $ 4,200 | |
Fees Earned | $ 4,200 | ||
14 | Salaries Expense | $ 750 | |
Cash | $ 750 | ||
17 | Cash | $ 6,250 | |
Fees Earned | $ 6,250 | ||
18 | Supplies | $ 800 | |
Cash | $ 800 | ||
20 | Account Receivable | $ 2,100 | |
Fees Earned | $ 2,100 | ||
24 | Cash | $ 3,850 | |
Fees Earned | $ 3,850 | ||
26 | Cash | $ 5,600 | |
Account Receivable | $ 5,600 | ||
27 | Salaries Expense | $ 750 | |
Cash | $ 750 | ||
29 | Misc. Expense | $ 130 | |
Cash | $ 130 | ||
30 | Misc. Expense | $ 200 | |
Cash | $ 200 | ||
30 | Cash | $ 3,050 | |
Fees Earned | $ 3,050 | ||
30 | Account Receivable | $ 1,500 | |
Fees Earned | $ 1,500 | ||
30 | Dividend | $ 6,000 | |
Cash | $ 6,000 | ||
ADJ JE | |||
Apr.30 | Insurance Expense | $ 300 | |
Prepaid Insurance | $ 300 | ||
30 | Supplies Expense | $ 850 | |
Supplies | $ 850 | ||
30 | Depreciation Expense | $ 700 | |
Accumulated Dep. | $ 700 | ||
30 | Salaries Expense | $ 120 | |
Salaries Payable | $ 120 | ||
30 | Rent Expense | $ 1,600 | |
Prepaid Rent | $ 1,600 | ||
30 | Unearned Fees | $ 2,500 | |
Fees Earned | $ 2,500 |
Cash | ||||
Date | Description | Debit | Credit | Balance |
Apr. 01 | Beg. Bal. | $ 13,100 | ||
1 | Prepaid Rent | $ 4,800 | $ 8,300 | |
2 | Prepaid Ins. | $ 1,800 | $ 6,500 | |
4 | Unearned Fees | $ 5,000 | $ 11,500 | |
6 | AR | $ 1,800 | $ 13,300 | |
10 | Misc. Expense | $ 120 | $ 13,180 | |
12 | AP | $ 1,200 | $ 11,980 | |
14 | Salary Exp. | $ 750 | $ 11,230 | |
17 | Fees Earned | $ 6,250 | $ 17,480 | |
18 | Supplies | $ 800 | $ 16,680 | |
24 | Fees Earned | $ 3,850 | $ 20,530 | |
26 | AR | $ 5,600 | $ 26,130 | |
27 | Salary Exp. | $ 750 | $ 25,380 | |
29 | Misc. Expense | $ 130 | $ 25,250 | |
30 | Misc. Expense | $ 200 | $ 25,050 | |
30 | Fees Earned | $ 3,050 | $ 28,100 | |
30 | Dividend | $ 6,000 | $ 22,100 | |
Account Receivable | ||||
Apr. 01 | Beg. Bal. | $ 3,000 | ||
6 | Cash | $ 1,800 | $ 1,200 | |
12 | Fees Earned | $ 4,200 | $ 5,400 | |
20 | Fees Earned | $ 2,100 | $ 7,500 | |
26 | Cash | $ 5,600 | $ 1,900 | |
30 | Fees Earned | $ 1,500 | $ 3,400 | |
Prepaid Rent | ||||
Apr. 01 | Beg. Bal. | $ - | ||
Apr. 01 | Cash | $ 4,800 | $ 4,800 | |
30 | Rent Expense | $ 1,600 | $ 3,200 | |
Prepaid Insurance | ||||
Apr. 01 | Beg. Bal. | $ - | ||
2 | Cash | $ 1,800 | $ 1,800 | |
30 | Insurance Expense | $ 300 | $ 1,500 | |
Supplies | ||||
Apr. 01 | Beg. Bal. | $ 1,400 | ||
18 | Cash | $ 800 | $ 2,200 | |
30 | Supplies Expense | $ 850 | $ 1,350 | |
Office Equipment | ||||
Apr. 01 | Beg. Bal. | $ 12,500 | ||
5 | A. Payable | $ 2,000 | $ 14,500 | |
Account Payable | ||||
Apr. 01 | Beg. Bal. | $ - | ||
5 | Off. Equipment | $ 2,000 | $ 2,000 | |
12 | Cash | $ 1,200 | $ 800 | |
Salaries Payable | ||||
Apr. 01 | Beg. Bal. | $ - | ||
30 | Salaries Expense | $ 120 | $ 120 | |
Unearned Fees | ||||
Apr. 01 | Beg. Bal. | $ - | ||
4 | Cash | $ 5,000 | $ 5,000 | |
30 | Fees Earned | $ 2,500 | $ 2,500 | |
Salaries Expense | ||||
Apr. 01 | Beg. Bal. | $ - | ||
14 | Cash | $ 750 | $ 750 | |
27 | Cash | $ 750 | $ 1,500 | |
30 | Salaries Payable | $ 120 | $ 1,620 | |
Rent Expense | ||||
Apr. 01 | Beg. Bal. | $ - | ||
30 | Prepaid Rent | $ 1,600 | $ 1,600 | |
Supplies Expense | ||||
Apr. 01 | Beg. Bal. | $ - | ||
30 | Supplies | $ 850 | $ 850 | |
Dep. Expense | ||||
Apr. 01 | Beg. Bal. | $ - | ||
30 | Acc. Depreciation | $ 700 | $ 700 | |
Misc. Expense | ||||
Apr. 10 | Beg. Bal. | $ 120 | $ 120 | |
29 | Cash | $ 130 | $ 250 | |
30 | Cash | $ 200 | $ 450 | |
Fees Earned | ||||
Apr. 12 | Account Receivable | $ 4,200 | $ 4,200 | |
17 | Cash | $ 6,250 | $ 10,450 | |
20 | AR | $ 2,100 | $ 12,550 | |
24 | Cash | $ 3,850 | $ 16,400 | |
30 | Cash | $ 3,050 | $ 19,450 | |
30 | AR | $ 1,500 | $ 20,950 | |
30 | Unearned Fees | $ 2,500 | $ 23,450 |
Common Stock | ||||
Apr. 01 | Beg. Bal. | ------- | -------- | $ 30,000 |
30 | End. Bal. | -------- | -------- | $ 30,000 |
Hippocrates Consulting | ||
Income Statement | ||
Apr. 30,2019 | ||
Fees Earned | $23,450 | |
Less: Expense: | ||
Salaries Expense | $1,620 | |
Rent Expense | $1,600 | |
Supplies Expense | $850 | |
Insurance Expense | $300 | |
Dep. Expense | $700 | |
Miss. Expense | $450 | |
Total Expense | $5,520 | $5,520 |
Net Income | $17,930 | |
Hippocrates Consulting | ||
Statement of Retained Earning | ||
Apr. 30, 2019 | ||
Beg. Bal | $0 | |
Net Income | $17,930 | |
Dividend | -$6,000 | |
Ending Balance | $11,930 | |
Hippocrates Consultancy | ||
Balance Sheet | ||
Apr. 30, 2019 | ||
Assets | ||
Cash | $22,100 | |
Prepaid Insurance | $1,500 | |
Prepaid Rent | $3,200 | |
AR | $3,400 | |
Supplies | $1,350 | |
Equipment | $14,500 | |
Acc. Depreciation | -$700 | |
Total Assets | $45,350 | |
Liabilities & Equity | ||
Liabilities: | ||
Salaries Payable | $120 | |
Account Payable | $800 | |
Unearned Fees | $2,500 | |
Owner's Equities: | ||
Common Stock | $30,000 | |
Retained Earnings | $11,930 | |
Total Liabilities & Equities | $45,350 |