Kelly pitney began her consulting business, Kelly Consulting, on April 1, 2010. The accounting cylcle for Kelly Consulting for April , including financial statements was illistrated on page 157-168. During May, kelly consulting entered the following transactions:May 3. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,500.5. Received cash from clients on account, $1,750. 9. Paid cash for a newspaper advertisement, $300.13. Paid office station company for part of the debt incurred on april 5, $400.15. Recorded services provided on account for the period May 1-15, $6,100.16. 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, $8,200.20. Purchased supplies on account, $40021. Recorded services provided on account for the period May 16-20, $3,900.25. Recorded cash from cash clients for fees earned for the period May 17-23, $5,100.27. Recieved cash from clients on account, $9,500.28. Paid part-time receptionist for two weeks salary, $750.30. Paid telephone bill for May, $120.31. Paid electricity bill for May $290. 31. Recorded cash from cash clients for fees earned for the period May 26-31, $3,875.31. Recorded services provided on account for the remainder of May, $3,200.31. Kelly withdrew $8,000 for personal use. Pg. 158 Chart of Accounts:

April 1. The following assets were recieved from Kelly Pitney: Cash, $13,100; Accounts receivable, $3,000; Supplies, $1,400; and office equipment, $12,500. there were no liabilities recieved.1. Paid three months rent on a lease rental contract, $4,800.2. Paid the premiums on property and casualty insurance policies, $1,800.4. Recieved cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $5,000.5. Purchased additional office equipment on account from Office Station Co., $2,000.6. Recieved cash from clients on account, $1,800.10. Paid cash for a newspaper advertisement, $120.12. paid Office Station Co. for part of the debt incurred on April 5, $1,200.12. Recorded services provided on account for the period April 1-12, $4,200.

14. Paid part-time receptionist for two weeks' salary, $750.17. Recorded cash from cash clients for fees earned during the period April 1-16, $6,250.18. Paid cash for supplies, $800.20. Recorded services provided on account for the period April 13-20, $2,100.24. Recorded cash from cash clients for fees earned for the period April 17-24, $3,850.26. Recieved cash from clients on account, $5,600.27. Paid part-time receptionist for two weeks' salary, $750.29. Paid telephone bill for April, $130.30. paid electricity bill for April, $200.30. Recorded cash from clients for fees earned for the period April 25-30, $3,050.30. Recorded services provided on account for the remainder of April, $1,500.30. kelly withdrew $6,000 for personal use.  Pg. 166 Post-closing trial balance

Debit Credit cash................................22,100Accounts receivable.......3,400Supplies...........................1,350Prepaid rent......................3,200Prepaid insurance.............1,500office equipment...............14,500Accumualted depreciation.. 330Accounts payable.............. 800Salaries Payable.............. 120Unearned Fees................ 2,500kelly pitney, Capital.......... 42,30046,050 46,050 Instructions:

1. The chart of accounts for Kelly Consulting is shown on page 158, and the post-closing trail balance as of April 30, 2010 is shown on page 166. 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, 2010, and place a check mark in the posting referece column. Journalize each of the May transactions in a two column journal using Kelly Consulting's chart of accounts. (do not insert the account numbers in the journal at this time.)2. Post the journal to a ledger of four-column accounts.3. Prepare an unadjusted trail balance4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete parts 5 and 6.a. Insurance expired during May is $300.b. Supplies on hand on May 31 are $600.c. Depreciation of office equipment for May is $330.d. Accrued receptionist salary on May 31 is $240.e. Rent expired during May is $1,600.f. Unearned fees on May 31 are $2,0005. Enter the unadjusted trial balance on an end-of-period spreadsheet (worksheet) and complete the spreadsheet.6. Journalize and post the adjusting entries.7.Prepare an adjusted trial balance.8. Prepare an income statement, a statement of owner's equity, and a balance sheet.9. Prepare and post the closing entries. (Income summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry.10. Prepare a post-closing trial balance

 COMPREHENSIVE PROBLEM 1

1. and 2. JOURNAL Pages 5 and 6Post.

Date Description Ref. Debit Credit

2010May 3 Cash....................................................................... 11 2,500

Unearned Fees................................................ 23 2,500

5 Cash....................................................................... 11 1,750

Accounts Receivable...................................... 12 1,750

9 Miscellaneous Expense........................................ 59 300Cash................................................................ 11 300

13 Accounts Payable................................................. 21 400Cash................................................................ 11 400

15 Accounts Receivable............................................ 12 6,100Fees Earned.................................................... 41 6,100

16 Salary Expense..................................................... 51 630Salaries Payable................................................... 22 120

Cash................................................................ 11 750

17 Cash....................................................................... 11 8,200Fees Earned.................................................... 41 8,200

20 Supplies................................................................. 14 400Accounts Payable........................................... 21 400

21 Accounts Receivable............................................ 12 3,900Fees Earned.................................................... 41 3,900

25 Cash....................................................................... 11 5,100Fees Earned.................................................... 41 5,100

27 Cash....................................................................... 11 9,500Accounts Receivable...................................... 12 9,500

28 Salary Expense..................................................... 51 750Cash................................................................ 11 750

30 Miscellaneous Expense........................................ 59 120Cash................................................................ 11 120

31 Miscellaneous Expense........................................ 59 290

Cash................................................................ 11 290

31 Cash....................................................................... 11 3,875Fees Earned.................................................... 41 3,875

1. and 2. JOURNAL Pages 5 and 6Post.

Date Description Ref. Debit Credit

2010May 31 Accounts Receivable............................................ 12 3,200

Fees Earned.................................................... 41 3,200

31 Kelly Pitney, Drawing......................................... 32 8,000Cash................................................................ 11 8,000

2., 6., and 9.

Cash 11Post. Balance

Date Item Ref. Dr. Cr. Dr. Cr.

2010May 1 Balance........................ ü ............... ............... 22,100 ...............

3 ..................................... 5 2,500 ............... 24,600 ...............5 ..................................... 5 1,750 ............... 26,350 ...............9 ..................................... 5 ............... 300 26,050 ...............

13 ..................................... 5 ............... 400 25,650 ...............16 ..................................... 5 ............... 750 24,900 ...............17 ..................................... 6 8,200 ............... 33,100 ...............25 ..................................... 6 5,100 ............... 38,200 ...............27 ..................................... 6 9,500 ............... 47,700 ...............28 ..................................... 6 ............... 750 46,950 ...............

30 ..................................... 6 ............... 120 46,830 ...............31 ..................................... 6 ............... 290 46,540 ...............31 ..................................... 6 3,875 ............... 50,415 ...............31 ..................................... 6 ............... 8,000 42,415 ...............

Accounts Receivable 12

2010May 1 Balance........................ ü ............... ............... 3,400 ...............

5 ..................................... 5 ............... 1,750 1,650 ...............15 ..................................... 5 6,100 ............... 7,750 ...............21 ..................................... 6 3,900 ............... 11,650 ...............27 ..................................... 6 ............... 9,500 2,150 ...............31 ..................................... 6 3,200 ............... 5,350 ...............

Supplies 14

2010May 1 Balance........................ ü ............... ............... 1,350 ...............

20 ..................................... 6 400 ............... 1,750 ...............31 Adjusting.................... 7 ............... 1,150 600 ...............

Prepaid Rent 15Post. Balance

Date Item Ref. Dr. Cr. Dr. Cr.

2010May 1 Balance........................ ü ............... ............... 3,200 ...............

31 Adjusting.................... 7 ............... 1,600 1,600 ...............

Prepaid Insurance 16

2010May 1 Balance........................ ü ............... ............... 1,500 ...............

31 Adjusting.................... 7 ............... 300 1,200 ...............

Office Equipment 18

2010May 1 Balance........................ 5 ............... ............... 14,500 ...............

Accumulated Depreciation 19

2010May 1 Balance........................ ü ............... ............... ............... 330

31 Adjusting.................... 7 ............... 330 ............... 660

Accounts Payable 21

2010May 1 Balance........................ ü ............... ............... ............... 800

13 ..................................... 5 400 ............... ............... 40020 ..................................... 6 ............... 400 ............... 800

Salaries Payable 22

2010May 1 Balance........................ ü ............... ............... ............... 120

16 ..................................... 5 120 ............... ............... —31 Adjusting.................... 7 ............... 240 ............... 240

Unearned Fees 23

2010

May 1 Balance........................ ü ............... ............... ............... 2,5003 ..................................... 5 ............... 2,500 ............... 5,000

31 Adjusting.................... 7 3,000 ............... ............... 2,000

Kelly Pitney, Capital 31Post. Balance

Date Item Ref. Dr. Cr. Dr. Cr.

2010May 1 Balance........................ ü ............... ............... ............... 42,300

31 Closing........................ 8 ............... 27,665 ............... 69,96531 Closing........................ 8 8,000 ............... ............... 61,965

Kelly Pitney, Drawing 32

2010May 31 ..................................... 6 8,000 ............... 8,000 ...............

31 Closing........................ 8 ............... 8,000 — —

Income Summary 33

2010May 31 Closing........................ 8 ............... 33,375 ............... 33,375

31 Closing........................ 8 5,710 ............... ............... 27,66531 Closing........................ 8 27,665 ............... — —

Fees Earned 41

2010May 15 ..................................... 5 ............... 6,100 ............... 6,100

17 ..................................... 6 ............... 8,200 ............... 14,30021 ..................................... 6 ............... 3,900 ............... 18,200

25 ..................................... 6 ............... 5,100 ............... 23,30031 ..................................... 6 ............... 3,875 ............... 27,17531 ..................................... 6 ............... 3,200 ............... 30,37531 Adjusting.................... 7 ............... 3,000 ............... 33,37531 Closing........................ 8 33,375 ............... — —

Salary Expense 51

2010May 16 ..................................... 5 630 ............... 630 ...............

28 ..................................... 6 750 ............... 1,380 ...............31 Adjusting.................... 7 240 ............... 1,620 ...............31 Closing........................ 8 ............... 1,620 — —

Rent Expense 52Post. Balance

Date Item Ref. Dr. Cr. Dr. Cr.

2010May 31 Adjusting.................... 7 1,600 ............... 1,600 ...............

31 Closing........................ 8 ............... 1,600 — —

Supplies Expense 53

2010May 31 Adjusting.................... 7 1,150 ............... 1,150 ...............

31 Closing........................ 8 ............... 1,150 — —

Depreciation Expense 54

2010

May 31 Adjusting.................... 7 330 ............... 330 ...............31 Closing........................ 8 ............... 330 — —

Insurance Expense 55

2010May 31 Adjusting.................... 7 300 ............... 300 ...............

31 Closing........................ 8 ............... 300 — —

Miscellaneous Expense 59

2010May 9 ..................................... 5 300 ............... 300 ...............

30 ..................................... 6 120 ............... 420 ...............31 ..................................... 6 290 ............... 710 ...............31 Closing........................ 8 ............... 710 — —

3.

KELLY CONSULTINGUnadjusted Trial Balance

May 31, 2010

Debit CreditBalances Balances

Cash................................................................................................... 42,415Accounts Receivable........................................................................ 5,350Supplies............................................................................................. 1,750Prepaid Rent..................................................................................... 3,200Prepaid Insurance............................................................................ 1,500

Office Equipment............................................................................. 14,500Accumulated Depreciation.............................................................. 330Accounts Payable............................................................................. 800Salaries Payable...............................................................................Unearned Fees.................................................................................. 5,000Kelly Pitney, Capital........................................................................ 42,300Kelly Pitney, Drawing...................................................................... 8,000Fees Earned...................................................................................... 30,375Salary Expense................................................................................. 1,380Rent Expense.................................................................................... Supplies Expense..............................................................................Depreciation Expense......................................................................Insurance Expense...........................................................................Miscellaneous Expense.................................................................... 710

78,805 78,805

5. A B C D E F G H I J K L M

                               KELLY CONSULTING                End-of-Period Spreadsheet (Work Sheet)                For the Month Ended May 31, 2010                                   

   Unadjusted   Adjusted Income Balance

 Trial Balance Adjustments Trial Balance Statement Sheet  Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.  

1 Cash 42,415       42,415       42,415   12 Accounts Receivable 5,350       5,350       5,350   23 Supplies 1,750     (b) 1,150 600       600   34 Prepaid Rent 3,200     (e) 1,600 1,600       1,600   45 Prepaid Insurance 1,500     (a) 300 1,200       1,200   56 Office Equipment 14,500       14,500       14,500   67 Accum. Depreciation   330   (c) 330   660       660 78 Accounts Payable   800       800       800 89 Salaries Payable       (d) 240   240       240 9

10 Unearned Fees   5,000 (f) 3,000     2,000       2,000 1011 Kelly Pitney, Capital   42,300       42,300       42,300 1112 Kelly Pitney, Drawing 8,000       8,000       8,000   1213 Fees Earned   30,375   (f) 3,000   33,375   33,375     1314 Salary Expense 1,380   (d) 240   1,620   1,620       1415 Rent Expense     (e) 1,600   1,600   1,600       1516 Supplies Expense     (b) 1,150   1,150   1,150       1617 Depreciation Expense     (c) 330   330   330       1718 Insurance Expense     (a) 300   300   300       18

19 Miscellaneous Expense 710       710   710       1920   78,805 78,805 6,620 6,620 79,375 79,375 5,710 33,375 73,665 46,000 2021 Net income             27,665     27,665 2122               33,375 33,375 73,665 73,665 22

6. JOURNAL Page 7Post.

Date Ref. Debit Credit

Adjusting Entries2010May 31 Insurance Expense............................................... 55 300

Prepaid Insurance......................................... 16 300Insurance expired.

31 Supplies Expense.................................................. 53 1,150Supplies........................................................... 14 1,150

Supplies used ($1,850 – $950).

31 Depreciation Expense.......................................... 54 330Accumulated Depreciation........................... 19 330

Equipment depreciation.

31 Salary Expense..................................................... 51 240Salaries Payable............................................. 22 240

Accrued salaries.

31 Rent Expense........................................................ 52 1,600Prepaid Rent.................................................. 15 1,600

Rent expired.

31 Unearned Fees...................................................... 23 3,000

Fees Earned.................................................... 41 3,000Unearned fees ($4,050 – $1,300).

7.

KELLY CONSULTINGAdjusted Trial Balance

May 31, 2010

Debit CreditBalances Balances

Cash................................................................................................... 42,415Accounts Receivable........................................................................ 5,350Supplies............................................................................................. 600Prepaid Rent..................................................................................... 1,600Prepaid Insurance............................................................................ 1,200Office Equipment............................................................................. 14,500Accumulated Depreciation.............................................................. 660Accounts Payable............................................................................. 800Salaries Payable............................................................................... 240Unearned Fees.................................................................................. 2,000Kelly Pitney, Capital........................................................................ 42,300Kelly Pitney, Drawing...................................................................... 8,000Fees Earned...................................................................................... 33,375Salary Expense................................................................................. 1,620Rent Expense.................................................................................... 1,600Supplies Expense.............................................................................. 1,150Depreciation Expense...................................................................... 330Insurance Expense........................................................................... 300Miscellaneous Expense.................................................................... 710

79,375 79,375

8.

KELLY CONSULTINGIncome Statement

For the Month Ended May 31, 2010

Fees earned.................................................................................... $ 33,375Expenses:

Salary expense....................................................................... $1,620Rent expense.......................................................................... 1,600Supplies expense.................................................................... 1,150Depreciation expense............................................................ 330Insurance expense................................................................. 300Miscellaneous expense.......................................................... 710

Total expenses.................................................................... 5,710 Net income..................................................................................... $ 27,665

KELLY CONSULTINGStatement of Owner’s Equity

For the Month Ended May 31, 2010

Kelly Pitney, capital, May 1, 2008............................................... $ 42,300Net income for the month............................................................. $ 27,665Less withdrawals........................................................................... 8,000 Increase in owner’s equity............................................................ 19,665 Kelly Pitney, capital, May 31, 2010............................................. $ 61,965

KELLY CONSULTING

Balance SheetMay 31, 2010

Assets LiabilitiesCurrent assets: Current liabilities:

Cash................................. $42,415 Accounts payable........ $ 800Accounts receivable....... 5,350 Salaries payable........... 240Supplies........................... 600 Unearned fees.............. 2,000 Prepaid rent.................... 1,600 Total liabilities.......... $ 3,040Prepaid insurance.......... 1,200

Total current assets..... $51,165Property, plant, and Owner’s Equity

equipment:...................... Kelly Pitney,Office equipment............ $14,500 capital........................... 61,965

Less accum. depr......... 660 13,840 Total liabilities andTotal assets......................... $ 65,005 owner’s equity............. $ 65,005

9. JOURNAL Page 8Post.

Date Ref. Debit Credit

Closing Entries2010May 31 Fees Earned.......................................................... 41 33,375

Income Summary.......................................... 33 33,375

31 Income Summary................................................. 33 5,710Salary Expense............................................... 51 1,620Rent Expense.................................................. 52 1,600Supplies Expense........................................... 53 1,150Depreciation Expense.................................... 54 330

Insurance Expense......................................... 55 300Miscellaneous Expense.................................. 59 710

31 Income Summary................................................. 33 27,665Kelly Pitney, Capital..................................... 31 27,665

31 Kelly Pitney, Capital............................................ 31 8,000Kelly Pitney, Drawing................................... 32 8,000

10.

KELLY CONSULTINGPost-Closing Trial Balance

May 31, 2010

Debit CreditBalances Balances

Cash................................................................................................ 42,415Accounts Receivable..................................................................... 5,350Supplies ........................................................................................ 600Prepaid Rent.................................................................................. 1,600Prepaid Insurance......................................................................... 1,200Office Equipment.......................................................................... 14,500Accumulated Depreciation........................................................... 660Accounts Payable.......................................................................... 800Salaries Payable............................................................................ 240Unearned Fees............................................................................... 2,000Kelly Pitney, Capital..................................................................... 61,965

Totals...................................................................................... 65,665 65,665