Kelly Pitney began her consulting business, Kelly Consulting, on April 1, 2018. The accounting cycle for Kelly Consulting for April, including financial statements, was illustrated in this chapter. During May, Kelly Consulting entered into the following transactions:

May	3	Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $4,500.
	5	Received cash from clients on account, $2,450.
	9	Paid cash for a newspaper advertisement, $225.
	13	Paid Office Station Co. for part of the debt incurred on April 5, $640.
	15	Recorded services provided on account for the period May 1–15, $9,180.
	16	Paid part-time receptionist for two weeks’ salary including the amount owed on April 30, $750.
	17	Recorded cash from cash clients for fees earned during the period May 1–16, $8,360.

Record the following transactions on Page 6 of the journal:

May	20	Purchased supplies on account, $735.
	21	Recorded services provided on account for the period May 16–20, $4,820.
	25	Recorded cash from cash clients for fees earned for the period May 17–23, $7,900.
	27	Received cash from clients on account, $9,520.
	28	Paid part-time receptionist for two weeks’ salary, $750.
	30	Paid telephone bill for May, $260.
	31	Paid electricity bill for May, $810.
	31	Recorded cash from cash clients for fees earned for the period May 26–31, $3,300.
	31	Recorded services provided on account for the remainder of May, $2,650.
	31	Paid dividends, $10,500.

Required:

1.

The chart of accounts is shown in a separate panel and the post-closing trial balance as of April 30, 2018, is shown below.

A.

Download the spreadsheet in the Ledger panel and save the Excel file to your computer. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of the four-column account. Date the balances May 1, enter Balance in the Item column and select a check mark in the Posting Reference column.

B.

Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. Refer to the Chart of Accounts for exact wording of account titles. (Do not insert the account numbers in the journal at this time.)

2.

Post the journal entries on pages 5 and 6 of the journal to the ledger of four-column accounts. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.

3.

Prepare an unadjusted trial balance.

4.

At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts (5) and (6).

•	Insurance expired during May is $275.
•	Supplies on hand on May 31 are $715.
•	Depreciation of office equipment for May is $330.
•	Accrued receptionist salary on May 31 is $325.
•	Rent expired during May is $1,600.
•	Unearned fees on May 31 are $3,210.

5.

(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on a 10-column end-of-period spreadsheet (work sheet), and complete the spreadsheet.

6.

A.	Journalize the adjusting entries on Page 7 of the journal. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the adjusting entries to the ledger. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.

7.

Prepare an adjusted trial balance.

Kelly Consulting

POST-CLOSING TRIAL BALANCE

April 30, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	22,100.00
2	Accounts Receivable	3,400.00
3	Supplies	1,350.00
4	Prepaid Rent	3,200.00
5	Prepaid Insurance	1,500.00
6	Office Equipment	14,500.00
7	Accumulated Depreciation		330.00
8	Accounts Payable		800.00
9	Salaries Payable		120.00
10	Unearned Fees		2,500.00
11	Common Stock		30,000.00
12	Retained Earnings		12,300.00
13	Dividends
14	Income Summary
15	Totals	46,050.00	46,050.00

Chart of Accounts

CHART OF ACCOUNTS

Kelly Consulting

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
14	Supplies
15	Prepaid Rent
16	Prepaid Insurance
18	Office Equipment
19	Accumulated Depreciation

	LIABILITIES
21	Accounts Payable
22	Salaries Payable
23	Unearned Fees

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends
34	Income Summary

	REVENUE
41	Fees Earned

	EXPENSES
51	Salary Expense
52	Rent Expense
53	Supplies Expense
54	Depreciation Expense
55	Insurance Expense
59	Miscellaneous Expense

Journal

Pages 5 - 8 of the journal follow:

1. B. Journalize each of the May transactions in the two-column journal starting on Page 5 of the journal. Refer to the Chart of Accounts for exact wording of account titles. Scroll down for page 6 of the journal. (Do not insert the account numbers in the journal at this time. This will be done during the posting step.)

PAGE 5

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

PAGE 6

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

6. A. Journalize the adjusting entries on Page 7 of the journal (adjusting data can be found on the Instructions panel). Refer to the Chart of Accounts for exact wording of account titles.

PAGE 7

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Adjusting Entries
2
3
4
5
6
7
8
9
10
11
12
13

Ledger

Download the attached

SPREADSHEET

and save the Excel file to your computer. Use the spreadsheet to post the May transactions from the journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this problem. Your input into the spreadsheet will not be included in your grade in CengageNOW on this problem.

1. A.	For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of a four-column account. Date the balances May 1, enter Balance in the Item column and select a check mark in the Posting Reference column. Do not make an entry in the Item column for any other entries in the ledger.
2.	Post the journal entries on pages 5 and 6 of the journal to the ledger of four-column accounts. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.
6. B.	Post the adjusting entries to the ledger. Enter the appropriate Posting References in the journal and the ledger. No entry is necessary in the item column.

Unadjusted Trial Balance

3. Prepare an unadjusted trial balance. Accounts with zero balances can be left blank.

Kelly Consulting

UNADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Rent
5	Prepaid Insurance
6	Office Equipment
7	Accumulated Depreciation
8	Accounts Payable
9	Salaries Payable
10	Unearned Fees
11	Common Stock
12	Retained Earnings
13	Dividends
14	Fees Earned
15	Salary Expense
16	Rent Expense
17	Supplies Expense
18	Depreciation Expense
19	Insurance Expense
20	Miscellaneous Expense
21	Totals

Adjusted Trial Balance

7. Prepare an adjusted trial balance. Accounts with zero balances can be left blank.

Kelly Consulting

ADJUSTED TRIAL BALANCE

May 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Supplies
4	Prepaid Rent
5	Prepaid Insurance
6	Office Equipment
7	Accumulated Depreciation
8	Accounts Payable
9	Salaries Payable
10	Unearned Fees
11	Common Stock
12	Retained Earnings
13	Dividends
14	Fees Earned
15	Salary Expense
16	Rent Expense
17	Supplies Expense
18	Depreciation Expense
19	Insurance Expense
20	Miscellaneous Expense
21	Totals