For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2020, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July: July 1. The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received. Paid two months' rent on a lease rental contract, $4,800. Paid the premiums on property and casualty insurance policies, $4,500. Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500. Purchased additional office equipment on account from Office Station Co., $6,500. Received cash from clients on account, $15,300. Paid cash for a newspaper advertisement, $400. Paid Office Station Co. for part of the debt incurred on July 5, $5,200. Recorded services provided on account for the period July 1–12, $13,300. Paid receptionist for two weeks' salary, $1,750. Recorded cash from cash clients for fees earned during the period July 1–17, $9,450. Paid cash for supplies, $600. Recorded services provided on account for the period July 13–20, $6,650. Recorded cash from cash clients for fees earned for the period July 17–24, $4,000. Received cash from clients on account, $12,000. Paid receptionist for two weeks' salary, $1,750. Paid telephone bill for July, $325. Paid electricity bill for July, $675. Recorded cash from cash clients for fees earned for the period July 25–31, $5,200. Recorded services provided on account for the remainder of July, $3,000. Paid dividends, $12,500. Journalize each transaction, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 11 Cash 31 Common Stock 12 Accounts Receivable 32 Retained Earnings 14 Supplies 33 Dividends 15 Prepaid Rent 41 Fees Earned 16 Prepaid Insurance 51 Salary Expense 18 Office Equipment 52 Rent Expense 19 Accumulated Depreciation 53 Supplies Expense 21 Accounts Payable 54 Depreciation Expense 22 Salaries Payable 55 Insurance Expense 23 Unearned Fees 59 Miscellaneous Expense 2. Prepare an unadjusted trial balance. (I have given you check figures on your excel sheet to make sure your journal entries are correct. 3. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). 1. Insurance expired during July is $375. 2. Supplies on hand on July 31 are $1,525. 3. Depreciation of office equipment for July is $750. 4. Accrued receptionist salary on July 31 is $175. 5. Rent expired during July is $2,400. 6. Unearned fees on July 31 are $2,750. 4. Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 5. Journalize and post the adjusting entries. Record the adjusting entries 6. Prepare an adjusted trial balance. 7. Prepare an income statement, a retained earnings statement, and a balance sheet. Answer Check Figure: Net income: $33,475 8.Prepare and post the closing entries.

For the past several years, Steffy Lopez has operated a part-time consulting business from his home. As of July 1, 2020, Steffy decided to move to rented quarters and to operate the business, which was to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the following transactions during July: July 1. The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received. Paid two months' rent on a lease rental contract, $4,800. Paid the premiums on property and casualty insurance policies, $4,500. Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500. Purchased additional office equipment on account from Office Station Co., $6,500. Received cash from clients on account, $15,300. Paid cash for a newspaper advertisement, $400. Paid Office Station Co. for part of the debt incurred on July 5, $5,200. Recorded services provided on account for the period July 1–12, $13,300. Paid receptionist for two weeks' salary, $1,750. Recorded cash from cash clients for fees earned during the period July 1–17, $9,450. Paid cash for supplies, $600. Recorded services provided on account for the period July 13–20, $6,650. Recorded cash from cash clients for fees earned for the period July 17–24, $4,000. Received cash from clients on account, $12,000. Paid receptionist for two weeks' salary, $1,750. Paid telephone bill for July, $325. Paid electricity bill for July, $675. Recorded cash from cash clients for fees earned for the period July 25–31, $5,200. Recorded services provided on account for the remainder of July, $3,000. Paid dividends, $12,500. Journalize each transaction, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) 11 Cash 31 Common Stock 12 Accounts Receivable 32 Retained Earnings 14 Supplies 33 Dividends 15 Prepaid Rent 41 Fees Earned 16 Prepaid Insurance 51 Salary Expense 18 Office Equipment 52 Rent Expense 19 Accumulated Depreciation 53 Supplies Expense 21 Accounts Payable 54 Depreciation Expense 22 Salaries Payable 55 Insurance Expense 23 Unearned Fees 59 Miscellaneous Expense 2. Prepare an unadjusted trial balance. (I have given you check figures on your excel sheet to make sure your journal entries are correct. 3. At the end of July, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6). 1. Insurance expired during July is $375. 2. Supplies on hand on July 31 are $1,525. 3. Depreciation of office equipment for July is $750. 4. Accrued receptionist salary on July 31 is $175. 5. Rent expired during July is $2,400. 6. Unearned fees on July 31 are $2,750. 4. Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. 5. Journalize and post the adjusting entries. Record the adjusting entries 6. Prepare an adjusted trial balance. 7. Prepare an income statement, a retained earnings statement, and a balance sheet. Answer Check Figure: Net income: $33,475 8.Prepare and post the closing entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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July 1. The following assets were received from Steffy Lopez in exchange for common stock: cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment, $7,500. There were no liabilities received.

Paid two months' rent on a lease rental contract, $4,800.
Paid the premiums on property and casualty insurance policies, $4,500.
Received cash from clients as an advance payment for services to be provided, and recorded it as unearned fees, $5,500.
Purchased additional office equipment on account from Office Station Co., $6,500.
Received cash from clients on account, $15,300.
Paid cash for a newspaper advertisement, $400.
Paid Office Station Co. for part of the debt incurred on July 5, $5,200.
Recorded services provided on account for the period July 1–12, $13,300.
Paid receptionist for two weeks' salary, $1,750.
Recorded cash from cash clients for fees earned during the period July 1–17, $9,450.
Paid cash for supplies, $600.
Recorded services provided on account for the period July 13–20, $6,650.
Recorded cash from cash clients for fees earned for the period July 17–24, $4,000.
Received cash from clients on account, $12,000.
Paid receptionist for two weeks' salary, $1,750.
Paid telephone bill for July, $325.
Paid electricity bill for July, $675.
Recorded cash from cash clients for fees earned for the period July 25–31, $5,200.
Recorded services provided on account for the remainder of July, $3,000.
Paid dividends, $12,500.

Journalize each transaction, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)

11 Cash	31 Common Stock
12 Accounts Receivable	32 Retained Earnings
14 Supplies	33 Dividends
15 Prepaid Rent	41 Fees Earned
16 Prepaid Insurance	51 Salary Expense
18 Office Equipment	52 Rent Expense
19 Accumulated Depreciation	53 Supplies Expense
21 Accounts Payable	54 Depreciation Expense
22 Salaries Payable	55 Insurance Expense
23 Unearned Fees	59 Miscellaneous Expense