Question

You have been hired as an accountant for KTZFIG Consulting Inc. This business was created when some friends decided to make use of their newly minted college degrees and go into business together. The business was created on July 1, 2018. The company will have a fiscal year end of June 30.   The initial formation transactions and early purchases for KTZFIG Consulting Inc. resulted in the balances that are included in the first 2 columns of the Worksheet. (see the worksheet tab)

During July, the first month of operations, the following transactions occurred:

Event

Borrowed 25,000 from the bank for operating cash. The note has a 6% interest rate (simple interest) and is to be paid back in 5 years

Purchased office furniture for $9,865.

Paid $13,800 for 12 months rent on office space

Received $11,400 from SBoard Inc. for work to be performed over the next 12 months.

Paid $1,275 for utilities.

Paid $8,975 for purchases of supplies previously made on account.

Performed services for various customers for $12,750 cash and another $15,780 on account.

Collected $11,680 as payment for amounts previously billed.

Purchased $10,660 of additional office supplies on account.

Paid salaries to employees totaling $3,850 for 1 week.

Dividends of $1,000 were declared and paid.

At the end of July, the following additional information is available to help determine what adjustments are needed:

Additional work for customers of $5,980 has been performed during the last week of July but not yet billed

One month of interest has accrued on the note payable for the bank loan.

Supplies on hand are $4,785.

One month of the prepaid rent has been used up

One month of the services for SBoard Inc. has been performed (see above).

Salaries of $3,850 are paid every Friday (for a 5 day work week). July 30, 2018 was a Tuesday.

Depreciation expense for the computer equipment is $140 and for the office furniture is $120

SUGGESTED STEPS FOR COMPLETION OF THE PROJECT:

Prepare journal entries to record the July transactions given. Please refer to the Worksheet tab for Account Titles you may need.

Add the July journal entry information to the Worksheet in the July columns. You can do this in one of 2 ways - (1) Post the journal entries to ledger accounts using T-accounts to represent ledger accounts and then use those totals to post to the worksheet or (2) use excel to add all entries for a particular account into the correct column in the worksheet (ie., add all cash debits from the journal entries into the cash debit column for July entries). There is a tab to use for T Accounts if you want but the T Accounts are NOT required

Prepare an unadjusted trial balance as of July 31, 2018. This will be part of the Worksheet you prepare. There is a tab in this file that you will use for this. Excel formulas must be used throughout the project to obtain full credit.

Prepare adjusting entries for the month of July given the information provided.

Post the adjusting entries to the Adjusting entries columns on the worksheet

Prepare an adjusted trial balance as of July 31, 2018. This will be part of the Worksheet you prepare. There is a tab in this file that you will use for this.

Prepare financial statements for the month ending July 31, 2018. (Income Statement, Statement of Retained Earnings, Classified Balance Sheet ). Formatting is important and will be graded so be sure you use dollar signs and underlines as appropriate. Also be sure you have headings and proper column usage for all statements. There is a tab for these statements. Heading are PARTIALLY completed for the 3 statements.

Prepare closing entries for the end of the period

Copy the Worksheet from the Worksheet tab to the Worksheet formulas tab and the Financial Statements from the Financial Statements tab to the Financial Statements tab. Highlight the entire worksheet/financial statements area respecively and press the "ctrl" key and the "~" key. This will cause the formulas used to display instead of the numbers. Save your file with the formulas displayed. Worksheet - KTZFIG Consulting Inc BEGINNING NUMBERS JULY ENTRIES UNADJUSTED TRIAL BALANCE ADJUSTMENTS ADJUSTED TRIAL BALANCE ACCOUNT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT Cash 120,500 22,065 142,565 Accounts Receivable 4,100 4,100 Supplies 8,975 10,660 19,635 Prepaid Rent 13,800 13,800 Land 30,000 30,000 Computer Equipment 49,500 49,500 Accumulated Depreciation, Comp Equip Office Furniture 9,865 9,865 Accumulated Depreciation, Off Furn Accounts Payable 8,975 1,685 10,660 Salaries Payable Interest Payable Unearned Revenue 11,400 11,400 Long-term Notes Payable 25,000 25,000 Common Stock 200,000 200,000 Retained Earnings Dividends 1,000 1,000 Service Revenue 28,530 28,530 Salaries Expense 3,850 3,850 Rent Expense Supplies Expense Utilities Expense 1,275 1,275 Interest Expense Depreciation Expense, Comp Equip Depreciation Expense, Office Furniture 208,975 208,975 66,615 66,615 275,590       275,590

Answer 1

	Unadjusted trial balance		Adjusting entries		Adjusted trial balance
Particulars	Debit	Credit	Debit	Credit	Debit	Credit
Cash	142565				142565
Accounts receivable	4100		5980		10080
Supplies	19635			14850	4785
Prepaid rent	13800			1150	12650
Land	30000				30000
Computer equipment	49500				49500
Accumulated depreciation computer equipment				140		140
Office furniture	9865				9865
Accumulated depreciation off furniture				120		120
Accounts payable		10660				10660
Salaries payable				1540		1540
interest payable				125		125
Unearned revenue		11400	950			10450
Long term notes payable		25000				25000
Common stock		200000				200000
Retained earnings
Dividends	1000				1000
Service revenue		28530		6930		35460
Salaries expense	3850		1540		5390
rent expense			1150		1150
Supplies expense			14850		14850
Utilities expense	1275				1275
Interest expense			125		125
Depreciation expense computer equip			140		140
Depreciation expense off furniture			120		120
Total	275590	275590	24855	24855	283495	283495