For the past several years, Jolene Upton has operated a
part-time consulting business from her home. As of July 1, 2019,
Jolene decided to move to rented quarters and to operate the
business, which was to be known as Gourmet Consulting, on a
full-time basis. Gourmet Consulting entered into the following
transactions during July: Jul. 1 The following assets were received
from Jolene Upton: cash, $19,000; accounts receivable, $22,300;
supplies, $3,800; and office equipment, $8,900. There were no
liabilities received. 1 Paid three months’ rent on a lease rental
contract, $6,000. 2 Paid the premiums on property and casualty
insurance policies, $4,500. 4 Received cash from clients as an
advance payment for services to be provided and recorded it as
unearned fees, $8,000. 5 Purchased additional office equipment on
account from Office Necessities Co., $5,100. 6 Received cash from
clients on account, $12,750. 10 Paid cash for a newspaper
advertisement, $500. 12 Paid Office Necessities Co. for part of the
debt incurred on July 5, $3,000. 12 Provided services on account
for the period July 1–12, $14,200. 14 Paid receptionist for two
weeks’ salary, $1,500. Record the following transactions on Page 2
of the journal: Jul. 17 Received cash from cash clients for fees
earned during the period July 1–17, $10,400. 18 Paid cash for
supplies, $1,000. 20 Provided services on account for the period
July 13–20, $9,000. 24 Received cash from cash clients for fees
earned for the period July 17–24, $8,500. 26 Received cash from
clients on account, $12,000. 27 Paid receptionist for two weeks’
salary, $1,500. 29 Paid telephone bill for July, $325. 31 Paid
electricity bill for July, $675. 31 Received cash from cash clients
for fees earned for the period July 25–31, $7,100. 31 Provided
services on account for the remainder of July, $5,500. 31 Jolene
withdrew $20,000 for personal use. Required: 1. Journalize each
transaction in a two-column journal starting on Page 1, referring
to the chart of accounts in selecting the accounts to be debited
and credited. (Do not insert the account numbers in the journal at
this time.) 2. Post the July transactions. A. Download the
spreadsheet in the Ledger panel and save the Excel file to your
computer. Use the spreadsheet to post the July transactions from
the journal to a ledger of four-column accounts. Be sure to save
your work in Excel as it will be used to complete the following
steps in Part 1 of this problem as well as steps in Part 2 of this
problem. Your input into the spreadsheet will not be included in
your grade in CengageNOW on this problem. B. Add the appropriate
posting reference to the journal in CengageNOW. 3. Prepare an
unadjusted trial balance. 4. At the end of July, the following
adjustment data were assembled. Analyze and use these data to
complete requirements (5) and (6). • Insurance expired during July
is $375. • Supplies on hand on July 31 are $2,850. • Depreciation
of office equipment for July is $400. • Accrued receptionist salary
on July 31 is $140. • Rent expired during July is $2,000. •
Unearned fees on July 31 are $3,000. 5. (Optional) On your own
paper or spreadsheet, enter the unadjusted trial balance on an
end-of-period work sheet and complete the spreadsheet. Find a blank
end-of-period work sheet in the Excel spreadsheet you previously
downloaded. 6. A. Journalize the adjusting entries on page 3 of the
journal. Adjusting entries are recorded on July 31. B. Use the
attached spreadsheet in the Ledger panel to post the adjusting
entries to the ledger of four-column accounts, inserting balances
is the accounts affected. Add the appropriate posting reference to
the adjusting entries in the journal in CengageNOW. 7. Prepare an
adjusted trial balance.
CHART
OF ACCOUNTS |
Gourmet Consulting |
General Ledger |
|
ASSETS |
11 |
Cash |
12 |
Accounts Receivable |
14 |
Supplies |
15 |
Prepaid Rent |
16 |
Prepaid Insurance |
18 |
Office Equipment |
19 |
Accumulated Depreciation-Office
Equipment |
|
LIABILITIES |
21 |
Accounts Payable |
22 |
Salaries Payable |
23 |
Unearned Fees |
|
EQUITY |
31 |
Jolene Upton, Capital |
32 |
Jolene Upton, Drawing |
|
|
EXPENSES |
51 |
Salary Expense |
52 |
Rent Expense |
53 |
Supplies Expense |
54 |
Depreciation Expense |
55 |
Insurance Expense |
59 |
Miscellaneous Expense |
|