Reference no: EM13920859

Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2016. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transaction:

May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.

May 5. Received cash from clients on account, $2,450.

May 9. Paid cash for a newspaper advertisement, $225.

May 13. Paid Office Station Co. for part of the debt incurred on April 5, $640.

May 15. Recorded services provided on account for the period May 1-15, $9,180.

May 16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750.

May 17. Recorded cash from cash clients for fees earned during the period May 1-16, $8360.

May 20. Purchased supplies on account, $735.

May 21. Recorded services provided on account for the period May 16-20, $4,820.

May 25. Recorded cash from cash clients for fees earned for the period May 17-23, $7,900.

May 27. Received cash from clients on account, $9,520.

May 28. Paid part-time receptionist for two weeks' salary, $750.

May 30. Paid telephone bill for May, $260.

May 31. Paid electricity bill for May, $810.

May 31. Recorded cash from cash clients for fees earned for the period May 26-31, $3,300.

May 31. Recorded cash services provided on account for the remainder of May, $2,650.

May 31. Kelly withdrew $10,500 for personal use.

Instructions

1. The chart of accounts for Kelly Consulting is shown in Exhibit 9, and the post-closing trial balance as of April 30, 2016, is shown in Exhibit 17. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, 2016, and place a check mark in the Posting Reference column. Journalize each of the May transactions in a two-column journal and using Kelly Consulting's chart of accounts.

2. Post the journal to a ledger of four-column accounts.

3. Prepare and unadjusted trial balance.

4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during May is $275.

b. Supplies on hand on May 31 are $715.

c. Depreciation of office equipment for May is $330.

d. Accrued receptionist salary on May 31 is $325.

e. Rent expired during May is $1,600.

f. Unearned fees on May 31 are $3,210.

5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet.

6. Journalize and post the adjusting entries.

7. Prepare and adjusted trial balance.

8. Prepare an income statement, a statement of owner's equity, and a balance sheet.

9 Prepare and post the closing entries. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.

10. Prepare a post-closing trial balance.