Problem P2-43 continues with the consulting business of Carl Davis,begun in problem P1-54. Here you will account for DavisConsulting's transactions as it is actually done in practice.
Davis Consulting completed the following transactions during December 2014:
Dec 2 Owner contributed $18000 cash in exchange for capital
2 paid monthly office rent, $550
3 paid cash for computer, $1800. This equipment is expected to remain in service for five years.
4 purchase office furniture on account, $4200. The front sure should last for five years.
5 purchase office supplies on account, $900.
9 performed consulting services for a client on account, 1,500.
12 Pay utilities expenses, $250.
18 perform services for client and receive cash of $1100
21 received $1400 in advance for client services to be preformed in the future.
21 hired an administrative assistant to be paid $2055 on the 20th Day of each month. The secretary begins work immediately.
26 paid $400 on a account
28 collected $300 on account.
30 Davis withdrew cash of $1400
Requirements
1. Journalize the transactions, using the following accounts: accounts receivable; office supplies; equipment; furniture; accounts payable; unearned revenue; Davis, capital; Davis Withdrawals; Service revenue; rent expense; and utilities expense. Explanation are not required
2. Open a T-account for each of the account
3. Post The journal entries to the T-accounts and calculate account balances. Formal posting references are not required.
4. Prepare a trial balance as of December 31,2014.
5. Prepare the income statement of Davis Consulting for the month ended December 31,2014.
6. Prepare the statement of the owners equity for the month ended December 31, 2014.
7. Prepare the balance sheet as of December 31, 2014.
8. Calculate the debt ratio for Davis Consulting.