Problem-
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Comprehensive Problem Inc.
Trial Balance
June 30, 2012
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Cash
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$18,470
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A/R
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14,333
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Advertising Supplies
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3,998
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Prepaid Insurance
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23,137
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Equipment
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135,495
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A/D - Equipment
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$19,207
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Accounts Payable
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11,998
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Unearned Service Revenue
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14,336
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Notes Payable
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62,679
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Common Stock
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67,546
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Retained Earnings
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19,667
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Totals
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$195,433
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$195,433
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During the month of July, the following occurred:
July 2 received $8,127 of the prior month's receivables
July 3 paid $5,220 of the prior month's accounts payable and paid $3,200 for July rent
July 5 earned $6,736 worth of the prior month's unearned revenue
July 6 provided a service and billed the client $3,376
July 9 bought advertising supplies for $2,217 on account
July 10 received $4,200 for a service to be provided
July 11 provided a service and billed the client $7,366
July 12 collected $9,127 of receivables
July 13 paid $7,500 of the notes payable
July 16 bought advertising supplies for $1,189 cash
July 18 provided a service and billed the client $4,934
July 20 received $2,700 for a service to be provided
July 23 paid $4,223 travel expense (all for July travel)
July 24 paid $2,400 of accounts payable
July 25 paid temporary employees $3,356 of wages (all for July work)
July 26 paid $5,000 of the notes payable
July 27 paid the shareholder a $3,000 dividend
July 30 provided a service fully earning the $4,200 from July 10
July 31 paid the shareholder a $4,500 dividend
Required - Part A
Part A1: provide general journal entries in general journal form for the above transactions
Part A2: create a trial balance at July 31 fully taking into account the beginning balances and the general journal entries recorded in part A1 (t-accounts are recommended for key accounts; do not hand them in t-accounts)
Adjusting Entry Information
-the insurance expires at a rate of $1,218 per month
-a month-end count reveals about $2,400 of advertising supplies remain on-hand
-annual depreciation (straight-line is used) is $19,356
-a thorough analysis reveals only $3,200 of the unearned revenue is not yet earned at month-end
-the interest on the N/P for the month is $418 (hint: don't increase the principal of the note)
-estimated expenses for the month are $2,100 utilities and $800 telephone
-a bank reconciliation reveals that a $4,000 payment from a client (A/R) was not recorded
Required - Part B
Part B1: provide adjusting journal entries, in general journal form, for the above
Part B2: create an adjusted trial balance
Part B3: create an income statement and a statement of retained earnings for the month of July
Part B4: create a balance sheet at 7/31/12
Part B5: provide closing entries in general journal form
Additional information-
This problem belongs to Basic Accounting and it discusses about preparing journal entries and providing adjusting entries and creating an adjusted trial balance.