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lebiet ACC 185 HOMEWORK LMK Reach Consulting is a tax consulting company. The company plans to prepare a monthly financial statement. During July, the company completed the following transactions: 07/01 The owner of LMK Reach Consulting invested $500,000 cash along with computer equipment that had a market value of $120,000 two years ago but was now worth $100,000 only 07/02. 07/04. 07/07. 07/10. 07/12. 07/15 Paid $15,000 cash for the rent of office space for the month. Purchased $12,000 of additional equipment on credit (due within 30 days) Completed a work for a client and immediately collected the $32,000 cash Completed work for a client and sent a bill for $27,000 to be paid within 30 days Purchased additional equipment for $8,000 in cash. Paid an assistant $6,200 cash as wages for 15 days. Collected $15,000 on the amount owed by the client Paid $12,000 cash to settle the liability on the equipment purchased. Owner withdrew $5,000 cash for personal use 07/18. 07/25, 07/28. 07/30. Completed work for another client who paid only $40,000, which is 50% of work done. The client promised to pay the balance in September Paid salary of $7,700 The company received Phone bill of $1,800 and Gas bill $3,800 for the month of July, but 07/31 07/31. paid in August Prepare e Journal entries Ledger entries Trial balance . Income Statement .Earning Income Statement Balance Sheet Note: This homework is due by March 14, 2017. There will be no excuse for not doing this homework.
Expert Answer
Journal Entries:
| Date | Account Titles | Debit | Credit |
| $ | $ | ||
| 07/01 | Cash | 500,000 | |
| Equipment | 100,000 | ||
| Capital | 600,000 | ||
| 07/02 | Rent Expense | 15,000 | |
| Cash | 15,000 | ||
| 07/04 | Equipment | 12,000 | |
| Accounts Payable | 12,000 | ||
| 07/07 | Cash | 32,000 | |
| Consulting Revenue | 32,000 | ||
| 07/10 | Accounts Receivable | 27,000 | |
| Consulting Revenue | 27,000 | ||
| 07/12 | Equipment | 8,000 | |
| Cash | 8,000 | ||
| 07/15 | Wages and Salaries Expense | 6,200 | |
| Cash | 6,200 | ||
| 07/18 | Cash | 15,000 | |
| Accounts Receivable | 15,000 |
Contd.
| 07/25 | Accounts Payable | 12,000 | |
| Cash | 12,000 | ||
| 07/28 | Withdrawals | 5,000 | |
| Cash | 5,000 | ||
| 07/30 | Cash | 40,000 | |
| Accounts Receivable | 40,000 | ||
| Consulting Revenue | 80,000 | ||
| 07/31 | Wages and Salaries Expense | 7,700 | |
| Cash | 7,700 | ||
| 07/31 | Telephone Expense | 1,800 | |
| Utilities Expense | 3,800 | ||
| Accounts Payable | 5,600 |
LMK Reach Consulting
Trial Balance
July 31
| Account Titles | Debit | Credit |
| $ | $ | |
| Cash | 533,100 | |
| Accounts Receivable | 52,000 | |
| Equipment | 120,000 | |
| Accounts Payable | 5,600 | |
| Capital | 600,000 | |
| Withdrawals | 5,000 | |
| Consulting Revenue | 139,000 | |
| Wages and Salaries Expense | 13,900 | |
| Rent Expense | 15,000 | |
| Telephone Expense | 1,800 | |
| Utilities Expense | 3,800 | |
| Totals | 744,600 | 744,600 |
LMK Reach Consulting
Income Statement
For the month ending July 31
| $ | $ | |
| Consulting Revenue | 139,000 | |
| Operating Expenses: | ||
| Wages and Salaries Expense | 13,900 | |
| Rent Expense | 15,000 | |
| Telephone Expense | 1,800 | |
| Utilities Expense | 3,800 | |
| Total Operating Expenses | 34,500 | |
| Net Income | 104,500 |
Statement of Equity
For the month ending July 31
| $ | |
| Balance, July 1 | 600,000 |
| Net Income | 104,500 |
| Withdrawals | (5,000) |
| Balance, July 31 | 699,500 |
Balance Sheet
July 31
| Assets | $ | Liabilities and Equity | $ |
| Cash | 533,100 | Accounts Payable | 5,600 |
| Accounts Receivable | 52,000 | Capital | 699,500 |
| Equipment | 120,000 | ||
| Total Assets | 705,100 | Total Liabilities and Equity | 705,100 |
