Reference no: EM131213132

Part 1:

Transaction Analysis 107
Aug 2 Received $10,000 cash from Miracle, and issued common stock to her.
2 Paid monthly office rent, $600.
3 Paid cash for a Dell computer, $2,700, with the computer expected to remain in service for five years.
4 Purchased office furniture on account, $4,500, with the furniture projected to last for five years.
5 Purchased supplies on account, $800.
9 Performed tax services for a client and received cash for the full amount of $1,400.
12 Received and paid utility expenses, $300.
18 Performed consulting services for a client on account, $1,900.

Requirements

1. Journalize the transactions for Barbara Miracle, Certified Public Accountant. Explanations are not required.

2. Post to the T-accounts. Key all items by date and determine the ending balance in each account. Denote an account balance on August 18, 2016, as Bal.

3. Using Excel, prepare a trial balance at August 18, 2016. In the Serial Exercise of Chapter 3, we add transactions for the remainder of August and will require a trial balance at August 31.

Part 2:

Aug 21 Received $2,700 in advance for tax work to be performed over the next 30 days.
22 Hired a secretary to be paid on the 15th day of each month.
26 Paid $800 for the supplies purchased on August 5.
28 Collected $1,900 from the client on August 18.
31 Declared and paid dividends of $1,400.

Requirements

1. Journalize the transactions of August 21 through 31.

2. Post the August 21 to 31 transactions to the T-accounts, keying all items by date.

3. Prepare an Excel spreadsheet showing the unadjusted trial balance at August 31.

4. At August 31, Miracle gathers the following information for the adjusting entries:

a. Accrued service revenue, $1,800.
b. Earned $900 of the service revenue collected in advance on August 21.
c. Supplies on hand, $400.
d. Depreciation expense equipment, $45; furniture, $75.
e. Accrued expense for secretary's salary, $600.

Refer to the Excel spreadsheet you prepared in Requirement 3. Make these adjustments in the adjustments columns and complete the adjusted trial balance at August 31.

5. Journalize and post the adjusting entries. Denote each adjusting amount as Adj and an account balance as Bal.

6. Prepare the single-step income statement and statement of retained earnings of Barbara Miracle, Certified Public Accountant, P.C., for the month ended August 31 and the classified balance sheet at that date.