Lena Kuznetsova provides coaching and mentoring services to individuals and companies. She operates the business as a proprietorship, under the name LVK Coaching Services, which has a December 31 year end.

On November 30, 2014, the company's general ledger included the following accounts (all accounts have normal balances):

December transactions were as follows:
Dec. 1 Paid December rent on her office space, $750.
1 Purchased additional equipment with a manufacturer's suggested price of $4,000. After negotiations with the retailer, paid $1,500 cash and signed a note payable for $2,000.
4 Collected $2,850 from customers in payment of their accounts.
7 Paid the $285 monthly insurance premium.
8 Purchased $315 of supplies on account.
10 Paid $5,660 of the accounts payable from November.
12 Finished a coaching contract with a client and earned $1,370. The client had paid her in November.
(In November, Lena had recorded the $1,370 as a liability, Unearned Revenue. By finishing the coaching contract, she has "paid" this obligation.)
21 Paid monthly charges for maintaining a website advertising her services, $325.
24 Withdrew $2,650 for personal use.
28 Billed clients $2,250 for coaching services provided in December. These clients will pay in January.
29 Received $925 cash advance from a client for a coaching contract that will start in January.
30 Paid part-time office assistant, $960.
31 Made a $170 payment on the note payable. Of this amount, $10 is interest and the remainder is a principal payment on the note payable.
Instructions
(a) Enter the November 30 balances in ledger accounts. Use T accounts.
(b) Journalize the December transactions.
(c) Post the December journal entries to the T accounts. Add new accounts if needed.
(d) Prepare a trial balance at December 31, 2014.
TAKING IT FURTHER Comment on the company's cash balance. What concerns and suggestions do you have for the company to consider in January?

Transcribed Image Text:

Accounts Receivable Supplies Equipment Accounts Payable Unearned Revenue L. Kuznetsova, Capital 7,315 4,020 1,805 21,500 8,660 1,370 29,130 L. Kuznetsova, Drawings Service Revenue Advertising Expense Insurance Expense Rent Expense Salaries Expense $34,200 55,175 3,550 3,135 8,250 10,560