Reference no: EM13487362

The business transactions for the comprehensive problem appear below the Chart of Accounts.

Required:

1. Prepare journal entries to record the December 2012 transactions.

2. Post those entries to t-accounts.

3. Prepare journal entries for the required adjusting entries.

4. Post the adjusting entries to the t-accounts.

5. Calculate balances for each of the t-accounts and then prepare an adjusted trial balance as of December 31, 2012.

6. Prepare an income statement for the month ended December 31, 2012.

7. Prepare a statement of retained earnings for the month ended December 31, 2012.

8. Prepare a balance sheet as of December 31, 2012.

9. Prepare closing entries and post them to the t-accounts.

10. Prepare a post-closing trial balance as of December 31, 2012.

Chart of Accounts:

Cash

Accounts Receivable

Supplies

Prepaid Insurance

Prepaid Rent

Accounts Payable

Salaries Payable

Unearned Consulting Revenue

Common Stock

Retained Earnings

Dividends

Consulting Revenue

Advertising Expense

Insurance Expense

Rent Expense

Salary Expense

Supplies Expense

Utility Expense

Transactions:

Dec 1. Murray invested $10,000 cash in exchange for all of the common stock in Murray Company.

Dec 3. The company paid $3,200 cash for four months' rent for office space.

Dec 3. The company purchased $1,420 of supplies on credit from Harris Office Products, promising to pay the bill in 7 days.

Dec 4. The company billed Easy Leasing $3,200 for consulting services performed in installing a web server. Easy Leasing agreed to pay the bill in 15 days.

Dec 5. The company paid $2,400 cash for one year's premium on a property and liability insurance policy effective December 1.

Dec 10. The company paid $1,420 cash to Harris Office for the supplies purchased on credit on December 3.

Dec 11. The company began consulting work on a project with Faulty Leasing. The work will last 15 working days, from December 11, 2012 through January 3, 2013. (Note that December 24, December 25, and January 1 are holidays for Murray Company.) Faulty Leasing agreed to pay Murray Company $6,000 upon the completion of the work.

Dec 17. The company received $3,200 from Easy Leasing as full payment for the services billed on December 4.

Dec 17. The company paid $4,500 cash for salaries to employees for their part-time work during the month.

Dec 18. The company paid $800 cash for advertising.

Dec 20. The company billed Easy Leasing $4,200 for consulting services performed. Easy Leasing agreed to pay the bill in 15 days.

Dec 27. The company purchased $850 of supplies on credit from Harris Office Products, promising to pay the bill in 7 days.

Dec 28. The company signed a contract with Plain-Old Leasing for consulting work to be done over 15 working days, starting on December 31, 2012 through January 21, 2013. They agreed on a price of $6,000 which was paid in advance.

Dec 31. The company paid cash dividends of $200.

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first month of operation:

1. The December 31 inventory count of supplies shows $1,200 still available.

2. As of December 31, the part-time employees have not been paid $4,500 of salary for their work performed during the second half of the month.

3. The electric company sent notice that the charge for December electricity usage would be $800.