question archive At June 30, 2020, the end of its most recent fiscal year, Green River Computer Consultants' post-closing trial balance was as follows
At June 30, 2020, the end of its most recent fiscal year, Green River Computer Consultants' post-closing trial balance was as follows
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At June 30, 2020, the end of its most recent fiscal year, Green River Computer Consultants' post-closing trial balance was as follows.
The company underwent a major expansion in July. New staff was hired and more financing was obtained. Green River conducted the following transactions during July 2020, and adhysts int acccounts monthly
July 1 Purchased equipment, paying $ 4,000 cash and signing 2-year note payable for $ 20,000 The equipment has a 4-year useful life. The note has a 6% interest rate which is payble on the first day of each following month.
2 Shareholders invested $ 50,000 cash in the company in exchange for ordinary shares.
3 Paid $ 3,600 cash for 12-month insurance police effective July 1.
3 Paid the first 2(July and August 2020) months' rent for an annual lease of office space for $ 4,000 per month.
6 Paid $ 3,800 supplies
9 Visited client offices and agreed on the terms of a consulting project. Green River will bill the client, Connor Productions, on the 20th of each month for services performed.
10 Collected $ 1,200 cash on acocunt from Milani Brothers. This client was billed in June when Green River performed the service.
13 Performed services for Fitzgerald Enterprises. This client paid $ 1,120 in advance last month. All services relating to this payment are now completed. 14 Paid $ 400 cash for a utility bill. This related to June utilities that were accrued at the end of June.
16 Met with a new client, Thunder Bay Technologies. Received $ 12,000 cash in advance for future services to be performed
18 Paid semi-monthly salaries for $ 11,000
20 Performed services worth $ 28,000 on account and billed customers.
20 Received a bill for $ 2,200 for advertising services received during July. The amount is not due until August 15.
23 Performed the first phase of the project for Thunder Bay Technologies. Recognized $ 10,000 of revenue from the cash advance received July 16.
27 Received $ 15,000 cash from customers billed on July 20
Adjustment data :
1 Adjustment of prepaid insurance
2 Adjustment of prepaid rent
3 Supplies used, $ 1,250
4 Equipment depreciation, $ 500 per month
5 Accrued of interest on note payable.
6 Salaries for the second half of July, 11,000, to be paid on August 1
7 Estimated utilities expense for July, $ 800
8 Income tax for July, $ 1,200, will be paid on August.
The chart of Accounts for Green River Computer Consultants contains the follwing accounts: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated Depreciation-Equipment, Accounts Payble, Notes Payble, Interest Payble, Income tax payble, Salaries and Wages Payable, Unearned service revenue, Share Capital-Ordinary Retained Earnings, Income Summary, Service Revenue, Supplies expense, Depreciation expense, Insurance Expense, Salaries and Wages expense, advertising expense, income tax expense, interest expense, rent expense, and Utilities expense
Instructions
a Enter the August 1 balances in the ledger accounts (Use T-accounts).
b Journalize the August transactions.
c Post to the ledger accounts. (use T-accounts)
d Prepare trial balance at July 31.
e Journalize and post adjusting entries.
f Prepare the adjusted trial balance.
g Prepare the income statement and a retained earnings statement for July and a classified statement of financial position at July 31
h Journalize and post closing entries and complete the closing process.
i Prepare post-closing trial balance at July 31
