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At June 30, 2017, the end of its most recent fiscal year, Blue Computer Consultants’ post-closing...

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.

Prepare a trial balance at July 31

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Unadjusted Adjusted Entries Adjusted-post closing
Unadjusted Trial Balance Debit Credit Debit Credit Debit Credit
Accounts Receivable 15900 15900
Cash 64850 64850
Prepaid Rent 9800 4900 4900
Equipment 28800 28800
Accumulated Depreciation 600 -600
Prepaid Insurance 4200 350 3850
Supplies 5440 1500 3940
Note Payable 6% 24400 24400
Common Stock 24400 Share 65400 65400
Salary Payable 13400 13400
Interes Payable 122 122
Income Tax Payable 1460 1460
Accounts Payable 2700 980 3680
Unearned Service Revenue 2400 2400
Advertising Expense 2700 2700
Salaries Expense 13400 13400 26800
Service Revenue 47770 47770
Insurance Expense 350 350
Supply Expense 1500 1500
Depreciation Expense 600 600
Retained Earning 2420 2420
Interst Expense 122 122
Utility Expense 980 980
Income Tax Expense 1460 1460
Rent Expense 4900 4900
Total 145090 145090 23312 23312 161052 161052

JOurnal:

S No Date Account Debit Credit
1 Jul 1 Equipment 28800
1 Jul 1 Cash 4400
1 Jul 1 Note Payable 6% 24400
2 Jul 2 Cash 61000
2 Jul 2 Common Stock 24400 Share 61000
3 Jul 3 Prepaid Insurance 4200
3 Jul 3 Cash 4200
4 Jul 3 Prepaid Rent (4900*2) 9800
4 Jul 3 Cash 9800
5 Jul 6 Supplies 4600
5 Jul 6 Cash 4600
6 Jul 9 No Entry
6 Jul 9
7 Jul 10 Cash 1460
7 Jul 10 Accounts Receivable 1460
8 Jul 13 Unearned Service Revenue 1370
8 Jul 13 Service Revenue 1370
9 Jul 14 Accounts Payable 490
9 Jul 14 Cash 490
10 Jul 16 Cash 14600
10 Jul 16 Unearned Service Revenue 14600
11 Jul 18 Salaries Expense 13400
11 Jul 18 Cash 13400
12 Jul 20 Accounts Receivable 34200
12 Jul 20 Service Revenue 34200
13 Jul 20 Advertising Expense 2700
13 Jul 20 Accounts Payable 2700
14 Jul 23 Unearned Service Revenue 12200
14 Jul 23 Service Revenue 12200
15 Jul 27 Cash 18300
15 Jul 27 Accounts Receivable 18300
Adjusting Entries
1 Jul 31 Insurance Expense 350 4200/12
1 Jul 31 Prepaid Insurance 350
2 Jul 31 Rent Expense 4900
2 Jul 31 Prepaid Rent 4900
3 Jul 31 Supply Expense 1500
3 Jul 31 Supplies 1500
4 Jul 31 Depreciation Expense-Equipment 600
4 Jul 31 Accumulated Depcreciation 600
5 Jul 31 Interest Expense 122 24400*6%*1 month
5 Jul 31 Interes Payable 122
6 Jul 31 Salaries Expense 13400
6 Jul 31 Salaries Payable 13400
7 Jul 31 Utilities Expense 980
7 Jul 31 Accounts Payable 980
8 Jul 31 Income Tax Expense 1460
8 Jul 31 Income Tax Payable 1460

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