Assignment
Jason Cline has operated a part-time law office out of his home. As of July 1, 2015
Cline decided to move to rented quarters and to operate the business, which was to be known as Cline Attorney-At-Law, on a full-time basis. Cline entered into the following transactions during July.
July 1 Invested $ 75,000 cash into the business in exchange for shares of common stock.
July 1 Purchased supplies on account for $1,500.
July 1 Paid six months rent in advance on a lease rental contract, $ 12,000.
July 2 Billed clients for work completed last month, $ 5,500.
July 3 Purchased office equipment on account for $ 12,000.
July 5 Received cash from clients as an advance payment for services to be provided for a four-month period and recorded it as unearned fees, $9,600.
July 6 Paid three months insurance in advance for auto insurance policy, $1,200.
July 7 Provided legal services and billed the client, $2,500.
July 8 Received cash from clients on account, $3,000.
July 10 Paid cash for a newspaper advertisement, $450.
July 12 Paid creditor on account for Office Equipment purchase on July 3, $2,200.
July 14 Provided legal services and billed the client, $6,700.
July 15 Paid the receptionist for two weeks' salary, $1,600.
July 17 Received payment from client for services provided on July 7, $1,000.
July 18 Paid cash for supplies, $700.
July 20 Paid telephone bill for July , $ 450.
July 23 Paid Electricity bill for July, $830.
July 25 Provided legal services and billed the client, $2,500.
July 27 Paid creditor on account for supplies purchased on July 1, $1,000.
July 28 Paid cash for another newspaper advertisement, $500.
July 30 Received cash from clients on account, $3,000.
July 30 Paid receptionist for two weeks' salary, $1,600.
July 30 Paid dividends of $200.
Instructions
1. Journalize the transactions for the month of July 2015. Please use the following accounts: Cash, Accounts Receivable, Supplies, Prepaid Rent, Prepaid Insurance, Office Equipment, Accumulated Depreciation-Office Equipment, Accounts Payable, Salaries Payable, Unearned Fees, Common Stock, Retained Earnings, Dividends, Legal Revenue, Salary Expense, Advertising Expense, Rent Expense, Supplies Expense, Depreciation Expense, Telephone Expense, Electricity Expense and Insurance Expense.
2. Prepare an unadjusted trial balance
3. Prepare the following adjusting entries at July 31:
a. Insurance expired during July is $ 400.
b. Supplies on hand on July 31 are $ 1,475.
c. Depreciation of Office Equipment is $ 250.
d. Accrued receptionist salary on July 31, $100.
e. Rent expired during July is $2,000.
f. Unearned fees earned on July is $2,400.
4. Prepare an adjusted trial balance .
5. Prepare an income statement, statement of retained earnings and a balance sheet for the month ended July 31, 2015.
6. Prepare the closing entries for the month.
7. Prepare the post-closing trial balance.