Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. 2. 3. 4. 5. 6. 10. 12. 12. 13. 17. 18. 20. 24. 25. 27. 29. 30. 30. 30. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment on account from Payne Company, $5,000. Received cash from clients on account, $800. Paid cash for newspaper advertisement, $1,720. Paid Payne Company a portion of the debt incurred on September 5, $2,000. Recorded services provided on account for the period September 1-12, $1,200. Paid part-time receptionist for two weeks' salary, at $500 per week. Recorded cash from cash clients for fees earned during the first half of September, $3,000. Paid cash for supplies, $750. Recorded services provided on account for the period September 13-20, $2,100. Recorded cash from cash clients for fees earned for the period September 17-24, $4,850. Received cash from clients on account, $1,300. Paid part-time receptionist for two weeks salary, at $500 per week. Paid telephone bill for September, $2,000. Paid electricity bill for September, $2,800. Recorded cash from cash clients for fees earned for the period September 25-30, $2,000. Recorded services provided on account for the remainder of September, $1,500.
Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He wishes to know how much net income the business has earned but has no prior knowledge of accounting and has approached your group for advice. The company entered the following transactions during September: Sept 1. 2. 3. 4. 5. 6. 10. 12. 12. 13. 17. 18. 20. 24. 25. 27. 29. 30. 30. 30. The following assets were received from Ralph in exchange for capital of Collins Consignment Sales Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000. There were no liabilities received. Paid three (3) months rent on a lease rental contract, $6,000. Paid the premiums on the property and peril insurance policies, $3,000. Received cash from clients as an advance payment for services to be provided in the coming months, $5,900. Purchased additional office equipment on account from Payne Company, $5,000. Received cash from clients on account, $800. Paid cash for newspaper advertisement, $1,720. Paid Payne Company a portion of the debt incurred on September 5, $2,000. Recorded services provided on account for the period September 1-12, $1,200. Paid part-time receptionist for two weeks' salary, at $500 per week. Recorded cash from cash clients for fees earned during the first half of September, $3,000. Paid cash for supplies, $750. Recorded services provided on account for the period September 13-20, $2,100. Recorded cash from cash clients for fees earned for the period September 17-24, $4,850. Received cash from clients on account, $1,300. Paid part-time receptionist for two weeks salary, at $500 per week. Paid telephone bill for September, $2,000. Paid electricity bill for September, $2,800. Recorded cash from cash clients for fees earned for the period September 25-30, $2,000. Recorded services provided on account for the remainder of September, $1,500.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter4: Completing The Accounting Cycle
Section: Chapter Questions
Problem 5CP
Related questions
Concept explainers
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Question
Transcribed Image Text:Requirement:
1. Journalize each transaction in the general journal referring to the following chart of accounts in selecting the
accounts to be debited and credited and include a narration for each transaction:
Account #
Account Name
Cash
Accounts Receivables
Supplies
Prepaid Rent
Prepaid Insurance
Office Equipment
11
12
14
15
16
18
21
22
23
31
41
51
52
53
54
55
56
ii.
iii.
iv.
Accounts Payable
Salaries Payable
Unearned Fees
2. Post the journal entries to their respective ledger accounts.
3. Prepare a trial balance based on the balances derived after completing requirement #2.
4. The company presented the following adjustments, and you are to prepare the adjusting entries in the general
journal (Narration required for each journal entry):
i.
Insurance expired during September, $500.
Supplies on hand on September 30, $1,250.
Accrued receptionist salary on September 30, $500
Rent expired during September, $2,000.
Unearned fees on September 30 are $2,900.
5. Post the adjusting entries to their respective ledger accounts already started in requirement # 2.
6. Prepare the adjusted trial balance.
7. Prepare the financial statements for the month of September for presentation to Ralph Collins.
8. Journalize the closing entries and balance off the ledger accounts including the income summary account.
9. Prepare the post-closing trial balance.
V.
Capital-Ralph Collins
Fees Earned
Salary Expense
Rent Expense
Supplies Expense
Insurance Expense
Utilities Expense
Advertising Expense
Income Summary
Transcribed Image Text:Scenario:
Ralph Collins founded Collins Consignment Sales Company and the company was operated from his home. As of
September 1, 2021, Collins decided to move to rented quarters and to operate the business on a full-time basis. He
wishes to know how much net income the business has earned but has no prior knowledge of accounting and has
approached your group for advice. The company entered the following transactions during September:
Sept 1.
2.
3.
4.
5.
6.
10.
12.
12.
13.
17.
18.
20.
24.
25.
27.
29.
30.
30.
30.
The following assets were received from Ralph in exchange for capital of Collins Consignment Sales
Company: cash - $19,000, accounts receivable - $2,800, supplies - $2,050, and office equipment - $15,000.
There were no liabilities received.
Paid three (3) months rent on a lease rental contract, $6,000.
Paid the premiums on the property and peril insurance policies, $3,000.
Received cash from clients as an advance payment for services to be provided in the coming months,
$5,900.
Purchased additional office equipment on account from Payne Company, $5,000.
Received cash from clients on account, $800.
Paid cash for newspaper advertisement, $1,720.
Paid Payne Company a portion of the debt incurred on September 5, $2,000.
Recorded services provided on account for the period September 1 -12, $1,200.
Paid part-time receptionist for two weeks' salary, at $500 per week.
Recorded cash from cash clients for fees earned during the first half of September, $3,000.
Paid cash for supplies, $750.
Recorded services provided on account for the period September 13-20, $2,100.
Recorded cash from cash clients for fees earned for the period September 17-24, $4,850.
Received cash from clients on account, $1,300.
Paid part-time receptionist for two weeks salary, at $500 per week.
Paid telephone bill for September, $2,000.
Paid electricity bill for September, $2,800.
Recorded cash from cash clients for fees earned for the period September 25-30, $2,000.
Recorded services provided on account for the remainder of September, $1,500.
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