Question

At January 1 (beginning of its fiscal year), Conover, Inc., a financial services consulting firm, reported the following account balances (in thousands, except for par and market value per share):

Cash	$	1,900	Accounts payable	$	210
Short-term investments		410	Unearned revenue		1,320
Accounts receivable		3,570	Salaries Payable		870
Supplies		150	Short-term note payable		780
Prepaid expenses		4,720	Common stock ($1 par value)		50
Office equipment		1,530	Additional paid-in capital		6,560
Accumulated depreciation-office equipment*		(480)	Retained earnings		2,010

*This account has a credit balance representing the portion of the cost of the equipment used in the past.

1. Received $9,500 cash for consulting services rendered.
2. Issued 10 additional shares of common stock at a market price of $120 per share.
3. Purchased $640 of office equipment, paying 25 percent in cash and owing the rest on a short-term note.
4. Received $890 from clients for consulting services to be performed in the next year.
5. Bought $470 of supplies on account.
6. Incurred and paid $1,800 in utilities for the current year.
7. Consulted for clients in the current year for fees totaling $1,620, due from clients in the next year.
8. Received $2,980 from clients paying on their accounts.
9. Incurred $6,210 in salaries in the current year, paying $5,300 and owing the rest (to be paid next year).
10. Purchased $1,230 in short-term investments and paid $800 for insurance coverage beginning in the next fiscal year.
11. Received $10 in interest revenue earned in the current year on short-term investments.

Required:

1. Prepare journal entries for each transaction for the current year.

Answer 1

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