P3-43 This problem continues the Haupt Consulting situation from Problem 2-64 of Chapter 2. Start from the trial balance and the posted T-accounts that Haupt Consulting prepared at December 18 as follows:
December 18, 2010
Accumulated depreciation – equipment
Accumulated depreciation -furniture
Unearned service revenue
Carl Haupt, Capital10,000
Carl Haupt, Withdrawals
Depreciation expense -equipment
Depreciation expense -furniture
Later in December, the business completed these transactions, as follows:
Dec 21 Received $900 in advance for client service to be performed evenly over the next 30 days.
Dec 21 Hired secretary to be paid $1,500 on the 20th day of each month. The secretary begins work immediately.
Dec 26 Paid $300 on account
Dec 28 Collected $600 on account
Dec 30 Owner withdrew $1,600
1. Open these additional T-accounts: Accumulated depreciation-equipment; Accumulated depreciation-furniture; Salary payable; Unearned service revenue; Depreciation expense-equipment; Depreciation expense-furniture; Supplies expense.
2. Journalize the transactions of Dec 21-30.
3. Post to the T-accounts, keying all items by date
4. Prepare a trial balance at December 31. Also set up columns for the adjustments and for the adjusted trial balance.
5. At December 31, the business gathers the following information for the adjusting entries:
a. Accrued service revenue, $4,00
b.Earned $300 of the service revenue collected in advance on December 21
c.Supplies on hand, $100
d.Depreciation expense-equipment, $33; furniture, $60
e.Accrued $700 expense for secretary’s salary
On your work sheet make these adjustments directly in the adjustments columns, and complete the adjusted trial balance at December 31. Throughout the book, to avoid rounding errors, we base adjusting entries on 30-day months and 360-day years.
6. Journalize and post the adjusted entries. In the T-accounts denote each adjusting amount as Adj and an account balance as Bal.
7. Prepare the income statement and the statement of owner’s equity of Haupt Consulting for the month ended December 31, 2010, and prepare the balance sheet at that date.
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