Question

At June 30, 2017, the end of its most recent fiscal year, Blue Computer Consultants’ post-closing trial balance was as follows:

		Debit		Credit
Cash		$6,380
Accounts receivable		1,460
Supplies		840
Accounts payable				$490
Unearned service revenue				1,370
Common stock				4,400
Retained earnings				2,420
		$8,680		$8,680

The company underwent a major expansion in July. New staff was hired and more financing was obtained. Blue conducted the following transactions during July 2017, and adjusts its accounts monthly.

July	1		Purchased equipment, paying $4,400 cash and signing a 2-year note payable for $24,400. The equipment has a 4-year useful life. The note has a 6% interest rate which is payable on the first day of each following month.
	2		Issued 24,400 shares of common stock for $61,000 cash.
	3		Paid $4,200 cash for a 12-month insurance policy effective July 1.
	3		Paid the first 2 (July and August 2017) months’ rent for an annual lease of office space for $4,900 per month.
	6		Paid $4,600 for supplies.
	9		Visited client offices and agreed on the terms of a consulting project. Blue will bill the client, Connor Productions, on the 20th of each month for services performed.
	10		Collected $1,460 cash on account from Milani Brothers. This client was billed in June when Blue performed the service.
	13		Performed services for Fitzgerald Enterprises. This client paid $1,370 in advance last month. All services relating to this payment are now completed.
	14		Paid $490 cash for a utility bill. This related to June utilities that were accrued at the end of June.
	16		Met with a new client, Thunder Bay Technologies. Received $14,600 cash in advance for future services to be performed.
	18		Paid semi-monthly salaries for $13,400.
	20		Performed services worth $34,200 on account and billed customers.
	20		Received a bill for $2,700 for advertising services received during July. The amount is not due until August 15.
	23		Performed the first phase of the project for Thunder Bay Technologies. Recognized $12,200 of revenue from the cash advance received July 16.
	27		Received $18,300 cash from customers billed on July 20.

Adjustment data:

1.		Adjustment of prepaid insurance.
2.		Adjustment of prepaid rent.
3.		Supplies used, $1,550.
4.		Equipment depreciation, $600 per month.
5.		Accrual of interest on note payable.
6.		Salaries for the second half of July, $13,400, to be paid on August 1.
7.		Estimated utilities expense for July, $980 (invoice will be received in August).
8.		Income tax for July, $1,460, will be paid in August.

The chart of accounts for Blue Computer Consultants contains the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance. Prepaid Rent, Equipment, Accumulated Depreciation—Equipment, Accounts Payable, Notes Payable, Interest Payable, Income Taxes Payable, Salaries and Wages Payable, Unearned Service Revenue, Common Stock, Retained Earnings, Dividends, Income Summary, Service Revenue, Supplies Expense, Depreciation Expense, Insurance Expense, Salaries and Wages Expense, Advertising Expense, Income Tax Expense, Interest Expense, Rent Expense, Supplies Expense, and Utilities Expense.

Here is the adjusted trial balance

	Adjusted Trial Balance
	ACCOUNT	DEBIT	CREDIT
	Cash	$64,850
	Accounts Receivable	$15,900
	Supplies	$3,890
	Accounts Payable		$          3,680
	Unearned Service Revenue		$          2,400
	Common stock		$        65,400
	Retained earning(beginning)		$          2,420
	Notes payable		$        24,400
	Equipment	$28,800
	Prepaid Insurance	$3,850
	Prepaid Rent	$4,900
	Sevice Revenue		$        47,770
	Salaries and Wages expense	$26,800
	Salaries and Wages Payable		$        13,400
	Advertising expense	$2,700
	Insurance expense	$350
	Rent Expense	$4,900
	Supplies Expense	$1,550
	Depreciation expense	$600
	Accumulated depreciation		$              600
	Interest expense	$122
	Interest payable		$              122
	Utilities expense	$980
	Income tax expense	$1,460
	Income tax payable		$          1,460
	Total	$161,652	$161,652

So with all this info can you Journalize and post closing entries and complete the closing process. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For accounts that have zero ending balance, the entry should be the balance date and zero for the amount.)

Answer 1

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