Reference no: EM132616071

1. For the past several years, Kelly Pitney has operated a part-time consulting business from her home. As of April 1, 2006, Kelly decided to move to rented quarters and to operate the business, which was to be known as Hippocrates Consulting, on a full-time basis. Hippocrates Consulting entered into the following transactions during April:

April 1. The following assets were received from Kelly Pitney: cash, $13,100; accounts receivable, $3,000; supplies, $1,400; and office equipment, $12,500. There were no liabilities received.

1. Paid three months' rent on a lease rental contract, $4,800.

2. Paid the premiums on property and casualty insurance policies, $1,800.

4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000.

5. Purchased additional office equipment on account from Office Station Co., $2,000.

6. Received cash from clients on account, $1,800. 10. Paid cash for a newspaper advertisement, $120. 12. Paid Office Station Co. for part of the debt incurred on April 5, $1,200.

12. Recorded services provided on account for the period April 1-12, $4,200.

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

17. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250.

18. Paid cash for supplies, $800.

20. Recorded services provided on account for the period April 13-20, $2,100.

24. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850.

26. Received cash from clients on account, $5,600.

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

29. Paid telephone bill for April, $130

4 Completing the Accounting Cycle

April 30. Paid electricity bill for April, $200.

30. Recorded cash from cash clients for fees earned for the period April 25-30, $3,050.

30. Recorded services provided on account for the remainder of April, $1,500.

30. Kelly withdrew $6,000 for personal use.

Instructions

Problem 1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)

11 Cash                                           31 Kelly Pitney, Capital

12 Accounts Receivable                      32 Kelly Pitney, Drawing

14 Supplies                                      41 Fees Earned

15 Prepaid Rent                                 51 Salary Expense

16 Prepaid Insurance                          52 Rent Expense

18 Office Equipment                            53 Supplies Expense

19 Accumulated Depreciation                 54 Depreciation Expense

21 Accounts Payable                             55 Insurance Expense

22 Salaries Payable                               59 Miscellaneous Expense

23 Unearned Fees

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

Problem 3. work a trial balance as of April 30, 2006, on a ten-column work sheet, listing all the accounts in the order given in the ledger. Complete the work sheet, using the following adjustment data:

a. Insurance expired during April is $300.

b. Supplies on hand on April 30 are $1,350.

c. Depreciation of office equipment for April is $700.

d. Accrued receptionist salary on April 30 is $120.

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

f. Unearned fees on April 30 are $2,500.

Problem 4. work an income statement, a statement of owner's equity, and a balance sheet.

Problem 5. Journalize and post the adjusting entries.

Problem 6. Journalize and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.

Problem 7. work a post-closing trial balance.