Reference no: EM131322980
Comprehensive Problem
This project is a review of the accounting cycle that has been covered during class. Prepare all information in a professional manner and show details as needed. You should complete this on the pages included. Read the entire project and review all information prior to starting.
On January 2, 2010, Jerry Andrews, a dentist, opened a dental office. The following transactions were completed during the first month of operations.
Jan 2 Jerry invested $30,000 cash and $13,200 worth of dental equipment in the business in exchange for common stock in a new corporation called J.A Dentist, Inc.
Jan 3 Paid four months rent of $2,000.
Jan 4 Purchases $1,000 of dental supplies and paid cash.
Jan 5 Paid insurance premiums of $3,600 for a 1-year insurance policy.
Jan 6 Earned and collected dental fees of $14,600 in cash during week.
Jan 9 Paid secretary a salary of $1,200.
Jan 10 Purchased $300 of dental supplies on account.
Jan 11 Bought an automobile for business use. It cost $13,000. Jerry paid $3,000 cash and signed a note for the balance.
Jan 13 Received a $240 telephone bill that will be paid later in the month.
Jan 13 Billed customers $6,000 for dental fees earned during the week
Jan 16 Received a $150 electric Bill (Utility Expense) that will be paid later in the month.
Jan 18 Paid $300 for dental supplies purchased on Jan 10.
Jan 20 Earned and collected dental fees of $4,500 in cash during the week.
Jan 23 Paid $450 for advertising in a local newspaper.
Jan 23 Received a $75 water bill (Utility Expense)
Jan 25 Received $2,500 from customers on account.
Jan 27 Paid a dividend of $3,500 to Jerry Andrews, the sole stockholder.
Jan 30 Paid the utility bills (water, telephone, electric).
Jan 30 Billed customers $2,000 for dental fees earned during the week.
Jan 31 Received $1,500 from customers on account. 1
The chart of accounts for J.A. Dentist, Inc. contains the following accounts
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Assets
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Revenue
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Cash
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Service Revenue
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Accounts Receivable
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Dental Supplies
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Prepaid Insurance
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Expenses
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Prepaid Rent
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Advertising Expense
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Dental Equipment
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Insurance Expense
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Automobile
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Rent Expense
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Salary Expense
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Liabilities
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Supplies Expense
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Accounts Payable
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Telephone Expense
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Notes Payable
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Utility Expense
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Salaries Payable
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Stockholders Equity
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Income Summary
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Common Stock
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Retained Earnings
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Dividends
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Required:
1. Journalize the January 2010 transactions on the journal paper. Omit the journal entry descriptions.
2. Post to ledger accounts via attached T account sheet.
3. Prepare a trial balance for January 2010 on attached sheet
4. Record the following adjusting entries on the journal paper, then post the adjusting entries to the existing T accounts.
a. Dental supplies on hand at the end of the month amount to $350.
b. Make the adjusting entry for the insurance premiums expired.
c. Accrued $840 for salary earned that will be paid in February.
d. Make the adjusting entry for rent expense.
e. Ignore depreciation for the month of January - no adjustment needed.
5. Prepare an adjusted trial balance for January 31, 2010 on the sheet.
6. Prepare the income statement, statement of retained earnings and classified balance sheet as of January 31, 2010. Prepare the statements on the attached sheets (pages 10 and 11).
7. Since January 31 2010 is the end of the fiscal year, record the closing entries on the journal paper and post the closing entries to the existing T accounts.
8. Prepare a post closing trial balance as of January 31, 2010 on the sheet.
** Check figures: Trial Balance $80,300; Total Assets $72,935; Net Income: $22,395 **