Question

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 transactions:
May
3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
5. Received cash from clients on account, $2,450.
9. Paid cash for a newspaper advertisement, $225.
13. Paid Office Station Co. for part of the debt incurred on April 5, $640.
15. Recorded services provided on account for the period May 1â15, $9,180.
16. Paid part-time receptionist for two weeks' salary including the amount owed on April 30, $750.
17. Recorded cash from cash clients for fees earned during the period May 1â16, $8,360.
Record the following transactions on Page 6 of the journal:
20. Purchased supplies on account, $735.
21. Recorded services provided on account for the period May 16â20, $4,820.
25. Recorded cash from cash clients for fees earned for the period May 17â23, $7,900.
27. Received cash from clients on account, $9,520.
28. Paid part-time receptionist for two weeks' salary, $750.
30. Paid telephone bill for May, $260.
31. Paid electricity bill for May, $810.
31. Recorded cash from cash clients for fees earned for the period May 26â31, $3,300.
31. Recorded services provided on account for the remainder of May, $2,650.
31. Kelly withdrew $10,500 for personal use.
Instructions:
Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the spreadsheet using the following adjustment data.
Insurance expired during May is $275.
Supplies on hand on May 31 are $715.
Depreciation of office equipment for May is $330.
Accrued receptionist salary on May 31 is $325.
Rent expired during May is $1,600.
Unearned fees on May 31 are $3,210.
If an amount box does not require an entry, leave it blank or enter "0".

Kelly Consulting End-of-Period Spreadsheet (Work Sheet) For the Month Ended May 31, 20Y8:

Unadjusted Adjustments Adjusted Income Balance
Trial Balance Trial Balance Statement Sheet
Account Title Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash
Accounts Receivable
Supplies
Prepaid Rent
Prepaid Insurance
Office Equipment
Accum. Depreciation
Accounts Payable
Salaries Payable
Unearned Fees
Common Stock
Retained Earnings
Dividends
Fees Earned
Salary Expense
Rent Expense
Supplies Expense
Depreciation Expense
Insurance Expense
Miscellaneous Expense
Net income

Answer 1

Missing information:

Kelly Consulting POST-CLOSING TRIAL BALANCE April 30, 2016

ACCOUNT TITLE DEBIT CREDIT

1 Cash 22,100.00  

2 Accounts Receivable 3,400.00  

3 Supplies 1,350.00  

4 Prepaid Rent 3,200.00  

5 Prepaid Insurance 1,500.00  

6 Office Equipment 14,500.00  

7 Accumulated Depreciation  330.00

8 Accounts Payable  800.00

9 Salaries Payable  120.00

10 Unearned Fees  2,500.00

11 Common Stock  30,000.00

12 Retained Earnings  12,300.00

13 Totals 46,050.00 46,050.00

Answer:

           Kelly Consulting

         Income statement

             May 31st, 2016

Fees earned                          $40,000

Salary expense                       ($1,705)

Rent expense                         ($1,600)

Supplies expense                   ($1,370)

Depreciation expense             ($330)

Insurance expense                  ($275)

Miscellaneous expense        ($1,295)

Net income                            $33,425

            Kelly Consulting

             Balance Sheet

             May 31st, 2016  

Assets:

Cash $44,195

Accounts receivable $8,080

Supplies $715

Prepaid rent $1,600

Prepaid Insurance $1,225

Equipment $14,500

Accumulated depreciation office equipment ($660)

Total assets = $69,655

Liabilities:

Unearned fees $3,210

Accounts payable $895

Wages payable $325

Equity:

Capital, Kelly Pitney $30,000

Drawings, Kelly Pitney ($10,500)

Retained Earnings $45,725

Total liabilities and equity = $69,655

Explanation:

cash $4,500 + $2,450 - $225 - $640 - $750 + $8,360 + $7,900 + $9,520 - $750 - $1,070 + $3,300 - $10,500

unearned fees $4,500 - $1,290

accounts receivable -$2,450 + $9,180 + $4,820 - $9,520 + $2,650

advertising expense $225

accounts payable -$640 + $735

service revenue $9,180 + $8,360 + $4,820 + $7,900 + $3,300 + $2,650 + $3,790

wages expense $750 + $750 + $325 - $120

wages payable $325

supplies $735 - $20

utilities expense $260 + $810

drawings Kelly $10,500

insurance expense $275

supplies expense $1,370

depreciation $330

rent expense $1,600