For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2019, 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.Provided services 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:

17.Received cash from cash clients for fees earned during the period April 1–16,$6,600.

18.Paid cash for supplies, $725.

20.Provided services on account for the period April 13–20,$16,800.

24.Received 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.Received cash from cash clients for fees earned for the period April 25–30,$5,160.

30.Provided services on account for the remainder of April, $2,590.

30.Jeff withdrew$18,000 for personal use.

Instructions

1. Journalize each transaction in a two-column journal starting on Page 1, 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.)

$$\begin{array}{llll} 11 & \text { Cash } & 31 & \text { Jeff Horton, Capital } \\ 12 & \text { Accounts Receivable } & 32 & \text { Jeff Horton, Drawing } \\ 14 & \text { Supplies } & 41 & \text { Fees Earned } \\ 15 & \text { Prepaid Rent } & 51 & \text { Salary Expense } \\ 16 & \text { Prepaid Insurance } & 52 & \text { Supplies Expense } \\ 18 & \text { Office Equipment } & 53 & \text { Rent Expense } \\ 19 & \text { Accumulated Depreciation-Office Equipment } & 54 & \text { Depreciation Expense } \\ 21 & \text { Accounts Payable } & 55 & \text { Insurance Expense } \\ 22 & \text { Salaries Payable } & 59 & \text { Miscellaneous Expense }\\ 23 & \text { Unearned Fees } \end{array}\\$$

2. Post the journal to a ledger of four-column accounts.
3. Prepare an unadjusted trial balance.
4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during April is $350.

b. Supplies on hand on April 30 are$1,225.

c. Depreciation of office equipment for April is $400.

d. Accrued receptionist salary on April 30 is$275.

e. Rent expired during April is $2,000.

f. Unearned fees on April 30 are$2,350.

5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet.
6. Journalize and post the adjusting entries. Record the adjusting entries on Page 3 of the journal.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
9. Prepare and post the closing entries. Record the closing entries on Page 4 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.
10. Prepare a post-closing trial balance.

If you were writing a spreadsheet program to calculate the net price for several items and you were not interested in showing the trade discount, which method would you be likely to use? Why?

Stylist Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at July 31, the end of the fiscal year, the following balances were taken from the ledger of Stylist Services Co.:

$$\begin{array}{lrlr}\text { Marlena Fenton, Capital } & \$ 1,060,000 & \text { Rent Expense } & \$ 60,000 \\ \text { Marlena Fenton, Drawing } & 75,000 & \text { Supplies Expense } & 19,500 \\ \text { Fees Earned } & 618,200 & \text { Miscellaneous Expense } & 6,150 \\ \text { Wages Expense } & 388,400 & & \end{array}$$

Journalize the two entries required to close the accounts.

For the past several years, Jeff Horton has operated a part-time consulting business from his home. As of April 1, 2019, 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.
3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $9,400.
4. Purchased additional office equipment on account from Smith Office Supply Co.,$8,000.
5. Received cash from clients on account, $11,700.
6. Paid cash for a newspaper advertisement,$350.
7. Paid Smith Office Supply Co. for part of the debt incurred on April 5, $6,400.
8. Provided services on account for the period April 1-12,$21,900.
9. Paid receptionist for two weeks' salary, $1,650.

Record the following transactions on Page 2 of the journal: 17. Received cash from cash clients for fees earned during the period April 1-16,$6,600. 18. Paid cash for supplies, $725. 20. Provided services on account for the period April 13-20,$16,800. 24. Received 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 Aprill,$540. 30. Paid electricity bill for April, $760. 30. Received cash from cash clients for fees earned for the period April 25-30,$5,160. 30. Provided services on account for the remainder of April, $2,590. 30. Jeff withdrew$18,000 for personal use.

Instructions

1. Journalize each transaction in a two-column journal starting on Page 1 , 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	Jeff Horton, Capital
12	Accounts Receivable	32	Jeff Horton, Drawing
14	Supplies	41	Fees Earned
15	Prepaid Rent	51	Salary Expense
16	Prepaid Insurance	52	Supplies Expense
18	Office Equipment	53	Rent Expense
19	Accumulated Depreciation-Oifice Equipment	54	Depreciation Expense
21	Accounts Payable	55	Insurance Expense
22	Salaries Payable	59	Miscellaneous Expense
23	Unearned Fees

2. Post the journal to a ledger of four-column accounts.

3. Prepare an unadjusted trial balance.

4. At the end of April, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

a. Insurance expired during April is $350.

b. Supplies on hand on April 30 are$1,225.

c. Depreciation of office equipment for April is $400.

d. Accrued receptionist salary on April 30 is$275.

e. Rent expired during April is $2,000.

f. Uneamed fees on April 30 are$2,350.

5. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet.

6. Journalize and post the adjusting entries. Record the adjusting entries on Page 3 of the journal.

7. Prepare an adjusted trial balance.

8. Prepare an income statement, a statement of owner's equity, and a balance sheet.

9. Prepare and post the closing entries. Record the closing entries on Page 4 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.

10. Prepare a post-closing trial balance.

On August 1, 2014, Rafael Masey established Planet Realty, which completed the following transactions during the month:

a. Rafael Masey transferred cash from a personal bank account to an account to be used for the business in exchange for capital stock, $17,500.

b. Purchased supplies on account,$2,300.

c. Earned sales commissions, receiving cash, $13,300.

d. Paid rent on office and equipment for the month,$3,000.

e. Paid creditor on account, $1,150.

f. Paid dividends,$1,800.

g. Paid automobile expenses (including rental charge) for month, $1,500, and miscellaneous expenses,$400.

h. Paid office salaries, $2,800.

i. Determined that the cost of supplies used was$1,050.

Instructions

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash, Supplies, Accounts Payable, Capital Stock, Dividends, Sales Commissions, Rent Expense, Office Salaries Expense, Automobile Expense, Supplies Expense, Miscellaneous Expense. Journal entry explanations may be omitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of August 31, 2014.

4. Determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for August.

5. Determine the increase or decrease in retained earnings for August.

Dolores Lopez opened a new consulting business. The following transactions occurred during January of the current year. Classify each transaction as an operating, an investing, or a financing activity.

(k) Paid wages to part-time employee, $500.

Journalize entries for the following related transactions of Lilly Heating & Air Company: Discovered that $9,000 of the merchandise purchased in (A) was defective and returned items, receiving credit.

Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted trial balance at July 31, 2018:

Reece Financial Services Co. Unadjusted Trial Balance July 31, 2018
	Debit Balances	Credit Balances
Cash	10,200
Accounts Receivable	34,750
Prepaid Insurance	6,000
Supplies	1,725
Land	50,000
Building	155,750
Accumulated Depreciation—Building		62,850
Equipment.	45,000
Accumulated Depreciation—Equipment		17,650
Accounts Payable		3,750
Unearned Rent		3,600
Common Stock		60,000
Retained Earnings		93,550
Dividends	8,000
Fees Earned		158,600
Salaries and Wages Expense	56,850
Utilities Expense	14,100
Advertising Expense	7,500
Repairs Expense	6,100
Miscellaneous Expense	4,025
	400,000	400,000

The data needed to determine year-end adjustments are as follows:

• Depreciation of building for the year, $6,400.
• Depreciation of equipment for the year,$2,800.
• Accrued salaries and wages at July 31, $900.
• Unexpired insurance at July 31,$1,500.
• Fees earned but unbilled on July 31, $10,200.
• Supplies on hand at July 31,$615.
• Rent unearned at July 31, $300.

Instructions

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance.

Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services’ accounting clerk prepared the following unadjusted trial balance at July 31, 2019:

$$\begin{array}{cc} \begin{array}{c} \textbf{Reece Financial Services Co.}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{July 31, 2019}\\ \end{array}\\ \hline \begin{array}{lrr} &\textbf{Debit}& \textbf{Credit}\\ &\textbf{Balances}& \textbf{Balances}\\ \hline\\ \text{Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 10,200\\ \text{Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 34,750\\ \text{Prepaid Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 6,000\\ \text{Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 1,725\\ \text{Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 50,000\\ \text{Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 155,750\\ \text{Accumulated Depreciation—Building . . . . . . . . . . . . .}&& 62,850\\ \text{Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 45,000\\ \text{Accumulated Depreciation—Equipment . . . . . . . . . . .}&& 17,650\\ \text{Accounts Payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}&& 3,750\\ \text{Unearned Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}&& 3,600\\ \text{Joni Reece, Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . .}&& 153,550\\ \text{Joni Reece, Drawing. . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 8,000\\ \text{Fees Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}&& 158,600\\ \text{Salaries and Wages Expense. . . . . . . . . . . . . . . . . . . . . .}& 56,850\\ \text{Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 14,100\\ \text{Advertising Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . .}& 7,500\\ \text{Repairs Expense . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . }&6,100\\ \text{Miscellaneous Expense. . . . . . . . . . . . . . . . . . . . . . . . . . .}& \underline{4,025}\\ &\underline{\underline{400,000}}&\underline{\underline{400,000}} \end{array} \end{array}$$

The data needed to determine year-end adjustments are as follows:

• Depreciation of building for the year, $6,400.
• Depreciation of equipment for the year,$2,800.
• Accrued salaries and wages at July 31, $900.
• Unexpired insurance at July 31,$1,500.
• Fees earned but unbilled on July 31, $10,200.
• Supplies on hand at July 31,$615.
• Rent unearned at July 31, $300.

Instructions

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable, Rent Revenue, Insurance Expense, Depreciation Expense—Building, Depreciation Expense—Equipment, and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.

Reece Financial Services Co., which specializes in appliance repair services, is owned and operated by Joni Reece. Reece Financial Services Co.’s accounting clerk prepared the unadjusted trial balance at July 31, 2014, shown below.

The data needed to determine year-end adjustments are as follows: a. Depreciation of building for the year, $6,400. b. Depreciation of equipment for the year,$2,800. c. Accrued salaries and wages at July 31, $900. d. Unexpired insurance at July 31,$1,500. e. Fees earned but unbilled on July 31, $10,200. f. Supplies on hand at July 31,$615. g. Rent unearned at July 31, $300.

Instructions

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.
2. Determine the balances of the accounts affected by the adjusting entries and prepare an adjusted trial balance.

The accountant for Eva’s Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Identify the errors in the accountant’s adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry.

Eva's Laundry Trial Balances May 31, 2018
	Unadjusted		Adjusted
	Debit Balances	Credit Balances	Debit Balances	Credit Balances
Cash	7,500		7,500
Accounts Receivable	18,250		23,250
Laundry Supplies	3,750		6,750
Prepaid Insurance*	5,200		1,600
Laundry Equipment	190,000		177,000
Accumulated Depreciation—Laundry Equipment		48,000		48,000
Accounts Payable		9,600		9,600
Wages Payable				1,000
Common Stock		35,000		35,000
Retained Earnings		75,300		75,300
Dividends	28,775		28,775
Laundry Revenue		182,100		182,100
Wages Expense	49,200		49,200
Rent Expense	25,575		25,575
Utilities Expense	18,500		18,500
Depreciation Expense			13,000
Laundry Supplies Expense			3,000
Miscellaneous Expense			600
Insurance Expense	3,250		3,250
	350,000	350,000	358,000	351,000

* $3,600 of insurance expired during the year.

The accountant for Eva’s Laundry prepared the following unadjusted and adjusted trial balances. Assume that all balances in the unadjusted trial balance and the amounts of the adjustments are correct. Identify the errors in the accountant’s adjusting entries, assuming that none of the accounts were affected by more than one adjusting entry.

Eva's Laundry
Trial Balances
May 31, 2014
	Unadjusted		Adjusted
	Debit Balances	Credit Balances	Debit Balances	Credit Balances
Cash	7,500		7,500
Accounts Receivable	18,250		23,250
Laundry Supplies	3,750		6,750
Prepaid Insurance*	5,200		1,600
Laundry Equipment	190,000		177,000
Accumulated Depreciation - Laundry Equipment		48,000		48,000
Accounts Payable		9,600		9,600
Wages Payable				1,000
Eva Bruns, Capital		110,300		110,300
Eva Bruns, Drawing	28,775		28,775
Laundry Revenue		182,100		182,100
Wages Expense	49,200		49,200
Rent Expense	25,575		25,575
Utilities Expense	18,500		18,500
Depreciation Expense			13,000
Laundry Supplies Expense			3,000
Insurance Expense			600
Miscellaneous Expense	3,250		3,250
	350,000	350,000	358,000	351,000

$3,600 of insurance expired during the year.

Prepare Ken's Carpet Cleaning's balance sheet for April 30 of the current year.

Prepare a post-closing trial balance for Len's Laundry on April 30 of the current year.