Question & Answer: For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2016,…..

For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2016, Jeff decided to move to rented quarters and to operate the business, which was to be known as Rosebud Consulting, on a full-time basis. Rosebud Consulting entered into the following transactions during April: Apr. 1 The following assets were received from Jeff Horton: cash, $20,000; accounts receivable, $14,700; supplies, $3,300; and office equipment, $12,000. There were no liabilities received. 1 Paid three months’ rent on a lease rental contract, $6,000. 2 Paid the premiums on property and casualty insurance policies, $4,200. 4 Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $9,400. 5 Purchased additional office equipment on account from Smith Office Supply Co., $8,000. 6 Received cash from clients on account, $11,700. 10 Paid cash for a newspaper advertisement, $350. 12 Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400. 12 Recorded services provided on account for the period April 1–12, $21,900. 14 Paid receptionist for two weeks’ salary, $1,650. Record the following transactions on Page 2 of the journal: Apr. 17 Recorded cash from cash clients for fees earned during the period April 1–17, $6,600. 18 Paid cash for supplies, $725. 20 Recorded services provided on account for the period April 13–20, $16,800. 24 Recorded cash from cash clients for fees earned for the period April 17–24, $4,450. 26 Received cash from clients on account, $26,500. 27 Paid receptionist for two weeks’ salary, $1,650. 29 Paid telephone bill for April, $540. 30 Paid electricity bill for April, $760. 30 Recorded cash from cash clients for fees earned for the period April 25–30, $5,160. 30 Recorded services provided on account for the remainder of April, $2,590. 30 Jeff withdrew $18,000 for personal use. Required: 1. Journalize each transaction in a two-column journal starting on Page 1, referring to the chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 2. Post the April transactions. A. Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Use the spreadsheet to post the April transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. B. Add the appropriate posting reference to the journal in CengageNOW. 3. Prepare an unadjusted trial balance. 4. At the end of April, the adjustment data were assembled. Analyze and use these data to complete requirements (5) and (6). • Insurance expired during April is $350. • Supplies on hand on April 30 are $1,225. • Depreciation of office equipment for April is $400. • Accrued receptionist salary on April 30 is $275. • Rent expired during April is $2,000. • Unearned fees on April 30 are $2,350. 5. (Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-of-period work sheet and complete the spreadsheet. Find a blank end-of-period work sheet in the Excel spreadsheet you previously downloaded. 6. A. Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded on April 30. B. Use the attached spreadsheet in the Ledger panel to post the adjusting entries to the ledger of four-column accounts, inserting balances in the accounts affected. Add the appropriate posting reference to the adjusting entries in the journal in CengageNOW. 7. Prepare an adjusted trial balance.

Expert Answer

 

Date Account Title Debit Credit
1-Apr Cash 20000
Accounts receivable 14700
Supplies 3300
Office equipment 12000
Jeff Horton Capital 50000
1-Apr Rent expense 6000
Cash 6000
2 Insurance premium 4200
Cash 4200
4 Cash 9400
Unearned fees 9400
5 Office equipment 8000
Account payable 8000
6 Cash 11700
Accounts receivable 11700
10 Advertisement expense 350
Cash 350
12 Account payable 6400
Cash 6400
12 Account receivable 21900
Service revenue 21900
14 Salary expense 1650
Cash 1650
17 Cash 6600
Fees earned 6600
18 Supplies 725
Cash 725
20 Account receivable 16800
Service revenue 16800
24 Cash 4450
Fees earned 4450
26 Cash 26500
Account receivable 26500
27 Salary expense 1650
Cash 1650
29 Utility expense 540
Cash 540
30 Utility expense 760
Cash 760
30 Cash 5160
Fees earned 5160
30 Account receivable 2590
Service revenue 2590
30 Jeff drawings 18000
Cash 18000
30 Prepaid-insurance(4200-350) 3850
Insurnace expense 3850
30 Supplies expense(3300+725-1800) 2800
Supplies 2800
30 Depreciation exp. 400
Acc.depn.-Office equipment 400
30 Salary expense 275
Salary Payable 275
30 Prepaid rent 4000
Rent expense 4000
30 Unearned fees 7050
Service revenue 7050
221750 221750
Ledger Accounts Balances
Debit Credit
30 Acc.depn.-Office equipment 400 400
5 Account payable 8000
12 Account payable 6400 1600
12 Account receivable 21900
20 Account receivable 16800
26 Account receivable 26500
30 Account receivable 2590
1-Apr Accounts receivable 14700
6 Accounts receivable 11700 17790
10 Advertisement expense 350 350
1-Apr Cash 20000
1-Apr Cash 6000
2 Cash 4200
6 Cash 11700
10 Cash 350
12 Cash 6400
14 Cash 1650
17 Cash 6600
18 Cash 725
24 Cash 4450
26 Cash 26500
27 Cash 1650
29 Cash 540
30 Cash 760
30 Cash 5160
30 Cash 18000
4 Cash 9400 43535
30 Depreciation exp. 400 400
24 Fees earned 4450
30 Fees earned 5160
17 Fees earned 6600 16210
2 Insurance expense 4200
30 Insurance expense 3850 350
30 Jeff drawings 18000 18000
1-Apr Jeff Horton Capital 50000 50000
1-Apr Office equipment 12000
5 Office equipment 8000 20000
30 Prepaid rent 4000 4000
30 Prepaid-insurance(4200-350) 3850 3850
1-Apr Rent expense 6000
30 Rent expense 4000 2000
14 Salary expense 1650
27 Salary expense 1650
30 Salary expense 275 3575
30 Salary Payable 275 275
12 Service revenue 21900
20 Service revenue 16800
30 Service revenue 2590
30 Service revenue 7050 48340
18 Supplies 725
1-Apr Supplies 3300
30 Supplies 2800 1225
30 Supplies expense(3300+725-1800) 2800 2800
4 Unearned fees 9400
30 Unearned fees 7050 2350
29 Utility expense 540 1300
30 Utility expense 760
221750 221750 119175 119175
TRIAL balance after adj. entries
Cash 43535
Account receivable 17790
Prepaid rent 4000
Prepaid-insurance 3850
Supplies 1225
Account payable 1600
Salary Payable 275
Unearned fees 2350
Office equipment 20000
Acc.depn.-Office equipment 400
Jeff drawings 18000
Jeff Horton Capital 50000
Service revenue 48340
Fees earned 16210
Supplies expense 2800
Insurance expense 350
Utility expense 1300
Rent expense 2000
Salary expense 3575
Advertisement expense 350
Depreciation exp. 400
Totals 119175 119175
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