Question

Please include the problem number with every answer, thank you.

During the month of October of the current year, Dan’s Accounting Service was opened. The following transactions occurred.

Oct 1   Dan sold $70,000 worth of stock (50 shares) to start the business.

Oct 1   Dan purchased $9,500 worth of office equipment on account from Keene’s

            Furniture Supply.

Oct 1   Dan paid October’s rent on the office. He wrote a check for $2,500.

Oct 2   Dan purchased $400 worth of office supplies for cash.

Oct 4   The telephone was installed. We paid $95 (Utilities Expense).

Oct 4 Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).

Oct 4   Dan started a petty cash fund with $50 for a fund balance.

Oct 5   We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).

Oct 5   A three-month umbrella insurance policy was purchased for $720 (cash).

Oct 7   Bebus’s Automotive Supply Company paid us $2,800 (cash) for setting up their

            books.

Oct 9   We earned $3,200 from Dietz’s Fine Furniture Company for setting up their

books. They will pay us later.

Oct 12 We paid a part-time employee $90 for running errands. There are no taxes to be

withheld.

Oct 14 Smith’s Food Service, Inc. paid us $1,700 for helping them with their taxes.

            The actual bill was for $3,500. They will pay us the rest next month.

Oct 19 We paid our part-time employee $80 for running errands. There are no taxes to be

withheld.

Oct 23 We sent a check for $1,000 to Keene’s Furniture Supply for the office equipment

            purchased on October 1st.

Oct 26 We earned $800 for consulting with Anderson’s Clothing Outlet. They will pay

us later.

Oct 26 We paid our part-time employee $50 for running errands. There are no taxes to

be withheld.

Oct 30 Dietz’s Fine Furniture Company paid us $900 on account for the work we did

            for them on October 9.

Oct 30 Dan paid the stockholders $600 in dividends.

Oct 31 Dan paid the electric bill which was $90.

Oct 31 Dan replenished the petty cash fund. He had used $12 for office supplies and $18

for miscellaneous expenses.

REQUIRED:

1)Journalize the following entries using the accounts from the Chart of Accounts.

Be sure to use asset accounts instead of expense accounts whenever possible.

2)Post the transactions to the ledger. (Use T- Accounts.)

3)Prepare a trial balance as of October 31 of the current year.

4)Journalize the following adjusting entries:

A)Ed determines that there was $250 worth of supplies still on hand.

B)One month of insurance was been used.

C)The depreciation on our office equipment is $250.

D)Our part-time employee has earned $40 so far this week. She will be paid next month for the full week’s work.

5)Post the adjusting entries.

6)Prepare an adjusted trial balance.

7)Prepare an Income Statement (don’t forget the Earnings Per Share), Statement of Retained Earnings and a Classified Balance Sheet.

8)Journalize the closing entries.

9)Post the closing entries.

10)Prepare a post-closing trial balance.

DAN’S ACCOUNTING SERVICE

CHART OF ACCOUNTS

101 Cash

102 Petty Cash

108      Accounts Receivable

112 Office Supplies

118 Prepaid Insurance

201 Office Equipment

202 Accumulated Depreciation—Office Equipment

301      Accounts Payable

308      Wages Payable

511      Contributed Capital

512 . Retained Earnings

513 . Dividends

611 . Professional Fees

810      Advertising Expense

815 . Depreciation Expense

820      Insurance Expense

825      Miscellaneous Expense

830      Office Supplies Expense

835 Rent Expense

840 . Utilities Expense

845      Wages Expense

Answer 1

1.

Dan's Accounting Services
General journal for the month of October
Date	Account Title	Debit	Credit
Oct.1	Cash	70000
	contributed Capital		70000
	(Cash contributed by the owner)
Oct.1	Office Equipment	9500
	Accounts Payable		9500
	(Purchase of office equipment)
Oct.1	Rent Expense	2500
	Cash		2500
	(Payment of rent for October)
Oct.2	Office Supplies	400
	Cash		400
	(Office supplies purchased for cash)
Oct.4	Utilities Expense	95
	Cash		95
	(Telephone installation expense)
Oct.4	Advertising Expense	150
	Cash		150
	(Cash paid for advertising)
Oct.4	Petty cash fund	50
	Cash		50
	(Started petty cash fund)
Oct.5	Miscellaneous Expense	45
	Cash		45
	(Purchase of stamps)
Oct.5	Prepaid Insurance	720
	Cash		720
	(Three month insurance policy)
Oct.7	Cash	2800
	Professional fee		2800
	(Service provided for cash)
Oct.9	Accounts Receivable	3200
	Professional fee		3200
	(Service provided on account)
Oct.12	Wages Expense	90
	Cash		90
	(Receipt of cash from clients on account)
Oct.14	Accounts Receivable	3500
	Professional fee		3500
	(Service provided on account)
	Cash	1700
	Accounts Receivable		1700
	(Collection for the above service)
Oct.19	Wages Expense	80
	Cash		80
	(Receipt of cash from clients on account)
Oct.23	Accounts Payable	1000
	Cash		1000
	(Payment made to creditor on account)
Oct.26	Accounts Receivable	800
	Professional fee		800
	(Service provided on account)
Oct.30	Cash	900
	Accounts Receivable		900
	(Collection from customer on account)
Oct.30	Dividends	600
	Cash		600
	(Dividends Paid)
Oct.31	Utilities Expense	90
	Cash		90
	(Electrivity bill paid)
Oct.31	Office Supplies	12
	Miscellaneous Expense	18
	Cash		30
	(Petty cash fund replenished)

2.

Cash			101		Accounts Receivable			108		Petty Cash			102
Date	Debit	Date	Credit		Date	Debit	Date	Credit		Date	Debit	Date	Credit
Oct.1	70000	Oct.1	2500		Oct.9	3200	Oct.14	1700		Oct.4	50
Oct.7	2800	Oct.2	400		Oct.14	3500	Oct.30	900
Oct.14	1700	Oct.4	95		Oct.26	800					50		0
Oct.30	900	Oct.4	150							End.Bal.	50
		Oct.4	50			7500		2600
		Oct.5	45		End.Bal.	4900				Office Equipment			201
		Oct.5	720							Date	Debit	Date	Credit
		Oct.12	90		Office Supplies			112		Oct.1	9500
		Oct.19	80		Date	Debit	Date	Credit
		Oct.23	1000		Oct.2	400					9500		0
		Oct.30	600							End.Bal.	9500
		Oct.31	90			400		0
		Oct.31	30		End.Bal.	400				Prepaid Insurance			118
										Date	Debit	Date	Credit
	75400		5850		Accumulated Depreciation			202		Oct.5	720
End Bal	69550				Date	Debit	Date	Credit
											720		0
										End.Bal.	720
						0		0
							End Bal.	0
Accounts Payable			301		Wages Payable			302		Contributed Capital			511
Date	Debit	Date	Credit		Date	Debit	Date	Credit		Date	Debit	Date	Credit
Oct.23	1000	Oct.1	9500									Oct.1	70000
	1000		9500								0		70000
		End Bal.	8500									End.Bal.	70000
					Dividends			513
Retained Earnings			512		Date	Debit	Date	Credit
Date	Debit	Date	Credit		Oct.30	600
										Professional Fee			301
						600		0		Date	Debit	Date	Credit
	0		0		End.Bal.	600						Oct.7	2800
		End.Bal.	0									Oct.9	3200
					Inurance Expense			820				Oct.14	3500
Advertising Expense			810		Date	Debit	Date	Credit				Oct.26	800
Date	Debit	Date	Credit								0		10300
Oct.4	150											End.Bal.	10300
						0		0
	150		0		End Bal.	0
End Bal.	150									Depreciation Expense			815
					Rent Expense			835		Date	Debit	Date	Credit
Miscellaneous Expense			825		Date	Debit	Date	Credit
Date	Debit	Date	Credit		Oct.1	2500
Oct.5	45										0		0
Oct.31	18					2500		0		End Bal.	0
	63		0		End Bal.	2500
End Bal.	63
					Utility Expense			840		Wages Expense			845
Office Supplies Expense			830		Date	Debit	Date	Credit		Date	Debit	Date	Credit
Date	Debit	Date	Credit		Oct.4	95				Oct.12	90
Oct.31	12				Oct.31	90				Oct.19	80
						185		0			170		0
	12		0		End Bal.	185				End Bal.	170
End Bal.	12

3.

Dan's Accounting Services
Trial Balance Oct.31
Account	Unadjusted
	Debit	Credit
Cash	69550
Petty cash	50
Accounts Receivable	4900
Office Supplies	400
Prepaid Insurance	720
Office Equipment	9500
Accumulated Depreciation
Accounts Payable		8500
Wages Payable
Contributed Capital		70000
Retained Earnings
Dividends	600
Professional Fee		10300
Advertising Expense	150
Depreciation Expense
Insurance Expense
Miscellaneous Expense	63
Office Supplies Expense	12
Rent Expense	2500
Utilities Expense	185
Wages Expense	170
	88800	88800

4.

	Dan's Accounting Services
	Adjusting Journal Entries for the month of October
Date	Event	Account Title	Debit	Credit
Oct.31	A	Office Supplies Expense	150
		Office Supplies		150
		(Office supplies used duringthe month)
Oct.31	B	Insurance Exense	240
		Prepaid Insurance		240
		(Insurance used)
Oct.31	C	Depreciation Expense	250
		Accumulated Depreciation		250
		(Depreciation on office equipment)
Oct.31	D	Wages Expense	40
		Wages Payable		40
		(Wages accrued but not paid)

6.

Dan's Accounting Services
Trial Balance Oct.31
Account	Adjusted
	Debit	Credit
Cash	69550
Petty cash	50
Accounts Receivable	4900
Office Supplies	250
Prepaid Insurance	480
Office Equipment	9500
Accumulated Depreciation		250
Accounts Payable		8500
Wages Payable		40
Contributed Capital		70000
Retained Earnings		0
Dividends	600
Professional Fee		10300
Advertising Expense	150
Depreciation Expense	250
Insurance Expense	240
Miscellaneous Expense	63
Office Supplies Expense	162
Rent Expense	2500
Utilities Expense	185
Wages Expense	210
	89090	89090

8.

	Addams & Family Inc.
	Closing Journal Entries for the month of April 2002
Date	Event	Account Title	Debit	Credit
Oct.31	1	Professional Fee	10300
		Income Summary		10300
		(Closing revenue account)
Oct.31	2	Advertising Expense	150
		Depreciation Expense	250
		Insurance Expense	240
		Miscellaneous Expense	63
		Office Supplies Expense	162
		Rent Expense	2500
		Utilities Expense	185
		Wages Expense	210
		Income Summary		3760
		(Closing of expense accounts)
Oct.31	3	Income Summary	6540
		Retained Earnings		6540
		(Closing of income summary)
Oct.31	4	Retained Earnings	600
		Drawings		600
		(Closing of drawings account)

10.

Dan's Accounting Services
Trial Balance Oct.31
Account	Post Closing
	Debit	Credit
Cash	69550
Petty cash	50
Accounts Receivable	4900
Office Supplies	250
Prepaid Insurance	480
Office Equipment	9500
Accumulated Depreciation		250
Accounts Payable		8500
Wages Payable		40
Contributed Capital		70000
Retained Earnings		5940
Total	84730	84730
Income Summary
Grand Total	84730	84730