Question - Roberto Ricci opens a computer consulting business called Viva Consultants and completes the following transactions in its first month of operations:
April 1 Ricci invests $100,000 cash along with office equipment valued at $24,000 in the business.
April 2 Prepaid $7,200 cash for twelve months' rent for office space. (Hint: Debit Prepaid Rent for $7,200.)
April 3 Made credit purchases for $12,000 in office equipment and $2,400 in office supplies. Payment is due within 10 days.
April 6 Completed services for a client and immediately received $2,000 cash.
April 9 Completed an $8,000 project for a client, who must pay within 30 days.
April 13 Paid $14,400 cash to settle the account payable created on April 3.
April 19 Paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.)
April 22 Received $6,400 cash as partial payment for the work completed on April 9.
April 25 Completed work for another client for $2,640 on credit.
April 28 Ricci withdrew $6,200 cash for personal use.
April 29 Purchased $800 of additional office supplies on credit.
April 30 Paid $700 cash for this month's utility bill.
Required -
1. Prepare general journal entries to record these transactions (use account titles listed in part 2).
2. Open the following ledger accounts-their account numbers are in parentheses (use the balance column format): Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); R. Ricci, Capital (301); R. Ricci, Withdrawals (302); Services Revenue (403); and Utilities Expense (690). Post journal entries from part 1 to the ledger accounts and enter the balance after each posting.
3. Prepare a trial balance as of the end of this month's operations.