Question

Kassidy Alba started The Alba Consulting Group, a new business that began operations on May 1,...

Kassidy Alba started The Alba Consulting Group, a new business that began operations on May 1, 2014. The Alba Consulting Group completed the following transactions during the month of May:

May

1

K. Alba invested $80,000 cash in the business

1

Rented a furnished office and paid $4,000 cash for four month’s rent

3

Purchased $1,890 of office equipment on credit

3

Paid $5,000 cash for the premium on a 10-month insurance policy

5

Paid $250 cash for this month’s cleaning services

7

Paid $425 cash for office supplies

8

Provided consulting services for a client and immediately collected $5,400 cash

10

Purchased a used Toyota Camry for business use – paid $8,000 cash

-the expected life of the vehicle is 4 years, with $800 salvage value

12

Provided $2,500 of consulting services for a client on credit

15

Paid $750 cash for an assistant’s salary for the first half of this month

20

Received $2,000 cash, partial payment for the services provided on May 12

22

Provided $3,200 of consulting services on credit

25

Received $1,200 cash, partial payment for the services provided on May 22

26

Paid $1,000 cash, partial payment for the office equipment purchased on May 3

27

Purchased $80 of advertising for May in the Grandview Herald and paid cash

28

Paid $750 cash for an assistants salary for the second half of the month

28

Provided $3,500 of consulting services - collected $1,000 cash, the balance on credit

30

Paid $300 cash for this month’s telephone bill

30

Paid $280 cash for this month’s utilities

31

Alba withdrew $1,400 cash for personal use

Chart of Accounts:  

Cash

Accounts Payable*

Office Supplies Expense

Office Equipment

K. Alba, Capital

Cleaning Expense

Vehicle – Toyota Camry

K. Alba, Withdrawals

Telephone Expense

Accumulated Depreciation – Vehicle

Consulting Services Revenue

Utilities Expense

Office Supplies

Salaries Expense

Advertising Expense

Accounts Receivable*

Depreciation Expense

Income Summary

Prepaid Insurance

Insurance Expense

Prepaid Rent

Rent Expense

*For this exercise, post all transactions from customers to the account receivable ledger account; post all transactions on credit to the accounts payable account.

1.         Prepare journal entries for the above transactions for the month of May.

2.         Open general ledger accounts for the above accounts.

3.         Post the journal entries to the general ledger.

4.         Prepare an unadjusted trial balance.

5.         Do adjusting entries (rent, depreciation, insurance and office supplies) for the month of May. During the month of May, the business used $125 in Office Supplies

6.         Prepare an adjusted trial balance.

7.         Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet for the

Month of May.

8.         Do closing entries (revenue, expense to income summary, income summary and

withdrawals to owner’s equity).

9.         Prepare a post-closing trial balance.

Check Figures:

Ending Cash Balance                     $67,365

Unadjusted Trial Balance               $95,490

Adjusted Trial Balance                    $95,640

Net Income                                        $10,415

Posting Closing Trial Balance       $90,055

Homework Answers

Answer #1

requirements 1 to 4 has been solved correctly.

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