Assignment
Problem A
On July 1, 2019, Tim Stein established his own accounting practice. Selected transactions for the first few days of July follow.
DATE TRANSACTIONS
July1 Signed a lease for an office and issued Check 101 for $13,350 to pay the rent in advance for six months.
1 Borrowed money from Second National Bank by issuing a four-month, 9 percent note for $28,000; received $27,160 because the bank deducted the interest in advance.
1 Signed an agreement with Carter Corp. to provide accounting and tax services for one year at $6,100 per month; received the entire fee of $73,200 in advance.
1 Purchased office equipment for $15,600 from Office Outfitters; issued a two-month, 12 percent note in payment. The equipment is estimated to have a useful life of five years and a $1,200 salvage value. The equipment will be depreciated using the straight-line method.
1 Purchased a one-year insurance policy and issued Check 102 for $1,632 to pay the entire premium.
3 Purchased office furniture for $13,920 from Furniture Warehouse; issued Check 103 for $5,720 and agreed to pay the balance in 60 days. The equipment has an estimated useful life of four years and a $1,200 salvage value. The office furniture will be depreciated using the straight-line method.
5 Purchased office supplies for $1,830 with Check 104. Assume $810 of supplies are on hand July 31, 2019.
Required:
• Record the transactions in the general journal. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability for the year 2019.
• Record the adjusting Journal entries that must be made on July 31, 2019.
Analyze:
• What balance should be reflected in Unearned Accountind Fees at July 31. 2019?
Problem B
i.-ii. Merchandise Inventory, before adjustment, has a balance of $6,900. The newly counted Inventory balance Is $7,400.
iii. Unearned Seminar Fees has a balance of $5,400, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.
iv. Prepaid Insurance has a balance of $8,400 for six months' Insurance paid in advance on May 1, 2019.
v. Store equipment costing $11,480 was purchased on March 31, 2019. It has a salvage value of $440 and a useful life of four years.
vi. Employees have earned $190 that has not been paid at June 30, 2019.
Vii. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $5.70; FUTA, $1.14; Medicare, $2.76; and social security, $11.78.
viii. Management estimates uncollectible accounts expense at 1 percent of sales. This year's sales were $1,400,000.
ix. Prepaid Rent has a balance of $5,700 for six months' rent paid in advance on March 1, 2019.
x. The Supplies account in the general ledger has a balance of $340. A count of supplies on hand at June 30, 2019, Indicated $120 of supplies remain.
xi. The company borrowed $12,500 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 12 percent.
Required:
• Based on the information above, record the adjusting Journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.
Analyze:
• After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.