Question

For the past several years, Dustin Larkin has operated a part-time consulting business form his home. As of April 1, 2018, Dustin decided to move to rented quarters and to operate the business, which is to be known as Quixote Consulting, on a full-time basis. He has hired you to do his accounting since he needs to know about how well his business is doing, his ownership amount, and what the future of his business looks like. Quixote Consulting entered into the following transactions during May its first month.

QUIXOTE CONSULTING

CHART OF ACCOUNTS

ASSETS OWNER'S EQUITY

111 CASH 311 DUSTIN LARKIN, CAPITAL

112 ACCOUNTS RECEIVABLE 312 DUSTIN LARKIN, DRAWING

113 SUPPLIES

114 PREPAID RENT

115 PREPAID INSURANCE REVENUE

150 OFFICE EQUIPMENT 411 CONSULTING FEES EARNED

151 ACC. DEPR. - OFFICE EQUIPMENT 412 VENDING MACHINE REVENUE

160 FURNITURE & FIXTURES

161 ACC. DEPR. - FURNITURE & FIXTURES EXPENSES

511 SALARY EXPENSE

512 RENT EXPENSE

LIABILITIES 513 SUPPLIES EXPENSE

211 ACCOUNTS PAYABLE 520 DEPRECIATON EXPENSE - OFFICE EQ.

212 SALARIES PAYABLE 521 DEPRECIATION EXPENSE - F&F

213 UNEARNED CONSULTING FEES 530 INSURANCE EXPENSE

250 NOTES PAYABLE, LONG TERM 599 MISCELLANEOUS EXPENSE

DIRECTIONS PAGE #2

May 1 The following assets were received from Dustin Larkin: Cash, $40,000, Account Receivable $9,500, Supplies, $1,250, Office Equipment, $17,500, and a long term Note Payable, $20,000.

1 Paid three months rent on a leased rental contract, $4,500.

1 Paid the premium on property and casulty insurance policies for th year, $1,800.

3 Received cash from clients as an advanced payment for services to be provided and recorded it as unearned fees, $3,000.

4 Purchased funiture and fixtures on account for the rental quarters from Century, Inc, $1,800.

5 Received cash from clients on account, $800.

9 Paid for a May newspaper advertisement, $120.

9 Entered into a contract with Southside Food Vendors to place vending machines in the waiting room. Quixote Consulting is to receive 10% of all sales, with a minimum of $200 monthly. Quxiote Consulting received $200 as an advance payment.

13 Made a partial payment to Century, Inc. on account, $800.

15 Recorded services provided on account for the period May 1-15, $2,250.

16 Paid part-time receptionist for two weeks' salary, $750.

17 Recorded cash from cash clients for fees earned May 1-16, $3,175.

20 Paid cash for supplies, $750.

21 Recorded services provided on account for the period May 16-20, $1,100.

25 Recorded cash from cash clients for fees earned May 17-23, $1,850.

27 Received cash from clients on account, $1,600.

28 Paid part-time receptionist for two weeks' salary, $750.

30 Paid telephone bill for May, $130.

31 Paid electric bill for May, $200.

31 Recorded cash from cash clients for fees earned May 24-31, $2,050.

31 Recorded services provided on account for the period May 21-31, $1,000.

31 Dustin withdrew cash for personal use, $4,500.

31 Wrote a business check to pay for Dustin's home phone bill, $130.

31 Southside Food Vendors reported a total of $2,800 of vending machine sales for May. Since the business had already received $200, Southside paid the remaining amount due for May.

DIRECTIONS:

1. The ledger should include each of the accounts from the Chart of Accounts, inspect the leger.

2. Journalize each transaction in May posting daily (next page).

3. At the end of the month, prepare an Unadjusted Trial Balance in the worksheet

Answer 1