Kelly Reilly owns a decorating service call K & R Decorating and provides its services for...

   

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Kelly Reilly owns a decorating service call K & R Decorating and provides its services for a fee. Kelly has hired you to prepare the books and financial statements. She provided the following information: 1. The following is the December 31, 20x0 post closing trial balance: ACCOUNT Cash Supplies Equipment Accumulated Depreciation Miscellaneous Payables Salaries Payable Long Term Note Payable K. Reilly, Capital DEBIT $200,000 20,000 100,000 $320,000 CREDIT $ 10,000 40,000 4,000 50,000 216,000 $320,000 The following transaction occurred during January, 20x1: 1. Purchased additional supplies for $12,000 on account (record the liability as a Miscellaneous Liability.) 2. Paid salaries owed to employees at December 31 20x0. 3. Provided decorating services for $84,000 cash. 4. Paid entire balance in Accounts Payables (including purchase in 1 above). 5. Purchased $15,000 worth of supplies on account (use Miscellaneous Payables.) 6. Paid six months' worth of rent on buildings for $6,000, starting in January. 7. Made a payment on the long-term loan of $5,000. Of this amount $4,950 was The following transaction occurred during January, 20x1: 1. Purchased additional supplies for $12,000 on account (record the liability as a Miscellaneous Liability.) 2. Paid salaries owed to employees at December 31 20x0. 3. Provided decorating services for $84,000 cash. 4. Paid entire balance in Accounts Payables (including purchase in 1 above). 5. Purchased $15,000 worth of supplies on account (use Miscellaneous Payables.) 6. Paid six months' worth of rent on buildings for $6,000, starting in January. 7. Made a payment on the long-term loan of $5,000. Of this amount $4,950 was principal and $50 was interest for January. Additional information: 1. There was $5,000 worth of supplies left on hand at the end of the month. 2. The equipment is being depreciated at $833 per month. 3. At month end, the following expenses for January (to be paid in February) has not been recorded: Utilities $350 and Salaries $4,600. Project 1 - The Accounting Cycle - Acct 1A -Summer 2020 Required: 1. Set up ledger (T accounts) and post the beginning balances. 2. Prepare journal entries for each of the transactions and post them to the ledgers. 3. Prepare unadjusted trial balance on the end of period (EOP) worksheet. 4. Journalize the adjusting entries needed for depreciation, supplies, rent and accrued liabilities; place adjustments on the EOP worksheet. Prepare an adjusted trial balance on the EOP worksheet. 5. 6. Extend the adjusted trial balance to prepare the Income Statement and Balance Sheet on the EOP worksheet. 7. Prepare the four basic financial statements for the month of January: Income Statement, Statement of Owner's Equity, Balance Sheet & Statement of Cash Flows. 8. Prepare the closing entries and post to ledger. 9. Prepare post closing trial balance. Kelly Reilly owns a decorating service call K & R Decorating and provides its services for a fee. Kelly has hired you to prepare the books and financial statements. She provided the following information: 1. The following is the December 31, 20x0 post closing trial balance: ACCOUNT Cash Supplies Equipment Accumulated Depreciation Miscellaneous Payables Salaries Payable Long Term Note Payable K. Reilly, Capital DEBIT $200,000 20,000 100,000 $320,000 CREDIT $ 10,000 40,000 4,000 50,000 216,000 $320,000 The following transaction occurred during January, 20x1: 1. Purchased additional supplies for $12,000 on account (record the liability as a Miscellaneous Liability.) 2. Paid salaries owed to employees at December 31 20x0. 3. Provided decorating services for $84,000 cash. 4. Paid entire balance in Accounts Payables (including purchase in 1 above). 5. Purchased $15,000 worth of supplies on account (use Miscellaneous Payables.) 6. Paid six months' worth of rent on buildings for $6,000, starting in January. 7. Made a payment on the long-term loan of $5,000. Of this amount $4,950 was The following transaction occurred during January, 20x1: 1. Purchased additional supplies for $12,000 on account (record the liability as a Miscellaneous Liability.) 2. Paid salaries owed to employees at December 31 20x0. 3. Provided decorating services for $84,000 cash. 4. Paid entire balance in Accounts Payables (including purchase in 1 above). 5. Purchased $15,000 worth of supplies on account (use Miscellaneous Payables.) 6. Paid six months' worth of rent on buildings for $6,000, starting in January. 7. Made a payment on the long-term loan of $5,000. Of this amount $4,950 was principal and $50 was interest for January. Additional information: 1. There was $5,000 worth of supplies left on hand at the end of the month. 2. The equipment is being depreciated at $833 per month. 3. At month end, the following expenses for January (to be paid in February) has not been recorded: Utilities $350 and Salaries $4,600. Project 1 - The Accounting Cycle - Acct 1A -Summer 2020 Required: 1. Set up ledger (T accounts) and post the beginning balances. 2. Prepare journal entries for each of the transactions and post them to the ledgers. 3. Prepare unadjusted trial balance on the end of period (EOP) worksheet. 4. Journalize the adjusting entries needed for depreciation, supplies, rent and accrued liabilities; place adjustments on the EOP worksheet. Prepare an adjusted trial balance on the EOP worksheet. 5. 6. Extend the adjusted trial balance to prepare the Income Statement and Balance Sheet on the EOP worksheet. 7. Prepare the four basic financial statements for the month of January: Income Statement, Statement of Owner's Equity, Balance Sheet & Statement of Cash Flows. 8. Prepare the closing entries and post to ledger. 9. Prepare post closing trial balance.

Answer rating: 100% (QA)

When supplies are purchased on account supplies are increased and liability to pay later increases too Credit miscellaneous payables and debit supplie... View the full answer