Question

During April 2019 Kelly Consulting entered into the following transactions:
Apr 2   Received cash from clients as an advance payment for services to be provided in May for $ 3,500.
Apr 5   Received cash from clients on account, $ 3,800.
Apr 9   Paid cash for a newspaper advertisement, $ 300.
Apr 13   Paid Office Stationary Company for part of the debt incurred last year, $ 400. When the office supplies were initially purchased, they were on account.

Apr 15   Cash received for services provided $ 8,500.
Apr 16 Paid part-time receptionist for two weeks’ salary including the amount owing on March 31, 2008. The total payment was for $ 750.
Apr 17   Recorded cash from cash clients for fees earned during Apr 1-17 for $ 8,200.
Apr 20   Purchased supplies on account, $ 400.
Apr 21   Recorded services provided on account for the period Apr 16 – 20, $ 3,900.
Apr 25   Recorded cash from cash clients for fees earned for the period Apr 17-23, $ 5,100.
Apr 27   Received cash from clients on account, $ 9,500.
Apr 28   Paid part-time receptionist for two weeks’ salary, $ 750.
Apr 29   Paid telephone bill for April, $ 120.
Apr 30   Paid electricity bill for April, $ 290.
Apr 30   Recorded cash from cash clients for fees earned for the period Apr 26-30, $ 3,875.
Apr 30   Recorded services provided on account for the remainder of April, $ 3,200.
Apr 30   Kelly withdrew $ 8,000 for personal use.
Instructions
Record the above transactions in the general journal. An explanation line is not required.
Post the beginning account balance and all of April’s transactions to T accounts. Prepare an unadjusted trial balance. Ensure debits equal credits. Remember that the cash T account is quite large so give yourself enough room.
At the end of April, the following adjustment data was assembled. Journalize the adjusting entries in the general journal and post to the T accounts. .
Apr 30   Insurance used up during April, $ 300.
Apr 30   Supplies remaining on hand at Apr 30th are $ 600.
Apr 30 Office equipment depreciated during the month. Original cost of equipment is $ 14,500. Equipment expected to last 3 years and have a salvage value of $2,625. Calculate and record the monthly depreciation amount rounded to full dollars.
Apr 30   Accrued receptionist salary on Apr 30th is $ 240.
Apr 30   Rent expired (used up) during April was $ 1,600.
Apr 30   Unearned fees remaining on April 30 are $ 2,000.
Instructions (continued)
Prepare an unadjusted trial balance ensuring total debits equal total credits.
Prepare an Income Statement, a Statement of Owner’s Equity and a Balance Sheet.
Record the closing journal entries into the general journal and post to the T Accounts. (Usually closing entries are completed at year-end not after 1 month. I am trying to save you some work).
Prepare a post-closing trial balance.
What is the current ratio at April 30th?
What is the acid-test ratio at April 30th?

Answer 1

In the books of Kelly Consulting :

Date	Account Titles	Debit	Credit
April 2019		$	$
2	Cash	3,500
	Unearned Fees		3,500
5	Cash	3,800
	Accounts Receivable		3,800
9	Advertising Expense	300
	Cash		300
13	Accounts Payable	400
	Cash		400
15	Cash	8,500
	Fees Earned		8,500
16	Salaries Expense	???
	Salaries Payable	???
	Cash		750
17.	Cash	8,200
	Fees Earned		8,200
20	Supplies	400
	Accounts Payable		400
21	Accounts Receivable	3,900
	Fees Earned		3,900
25	Cash	5,100
	Fees Earned		5,100
27	Cash	9,500
	Accounts Receivable		9,500
28	Salaries Expense	750
	Cash		750
29	Telephone Expense	120
	Cash		120
30	Electricity Expense	290
	Cash		290
30	Cash	3,875
	Fees Earned		3,875
30	Accounts Receivable	3,200
	Fees Earned		3,200
30	Withdrawals	8,000
	Cash		8,000
Adjusting Entries
April 30, 2019
1.	Insurance Expense	300
	Prepaid Insurance		300
2.	Supplies Expense	???
	Supplies		???
3.	Depreciation Expense ( 14,500 - 2,625 ) / 36	330
	Accumulated Depreciation : Office Equipment		330
4.	Salaries Expense	240
	Salaries Payable		240
5.	Rent Expense	1,600
	Prepaid Rent		1,600
6.	Unearned Fees	???
	Fees Earned		???