Question

On January 1, 2019 Potter Consulting Services Incorporated (PCS Inc.) opened for business.  The corporation completed the following transactions during January.  Analyze each transaction and make the appropriate journal entry in the space provided. Thank you!!

a.   January 1   Each stockowner contributed cash and received Common Stock. A total of $500,000 cash was paid for 500,000 shares with a $1 par value per share.

b.   January 1 Paid 3 months office space rent in advance in cash for a total of $6,000

c.   January 2  Purchased Office Furniture on account for $14,000.

d.   January 2 Purchased 500 copies of Planning Software which was placed in Merchandise Inventory to be sold to clients. Cost was $5.00 per copy for a total of $2,500. $500 was paid in cash and the other $2,000 was on account.

e.   January 3 performed consulting services for cash $5,000.

f.   January 3 performed consulting services on account $3,500.

g.   January 12 Signed a 3 year 5% note at first National Bank and received cash $20,000.

h.  January 15 Received $4,000 cash in advance for consulting services to be performed in February 2018.

i. January 15 Sold 15 copies of Planning Software at $10 per copy assume perpetual inventory system is used. The sale was for cash $150. Cost of Goods Sold was $75.

j. January 15. Paid cash to employees for salaries for working first two weeks of year. $4,500.

k. January 15 Collect the $3,500 cash for the account receivable from the client for whom the services were performed on January 3.

l. January 31 Record depreciation for the Office Furniture in the amount of $67.

m.  January 31 record the adjusting entry to use $2,000 of the office space rent which was paid in advance on January 1.

n.  January 31  Enter the adjusting entry to account for a consulting job that was completed in January but not yet paid for by the client. The bill sent out for the job totals $8,000.

o.  January 31 Enter the adjusting entry to accrue employee salaries in the amount of $4,500. This amount will not be paid until next month

Answer 1