Journalizing transactions, posting to T-accounts, and preparing a trial balance Problem P2-41 continues with the consulting business begun in Problem…

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Journalizing transactions, posting to T-accounts, and preparing a trial balance

Problem P2-41 continues with the consulting business begun in Problem P1-54 in

Chapter 1. Here you will account for Daniels Consulting’s transactions as it is actually

done in practice.

Daniels Consulting completed the following transactions during December 2016:

Dec. 2 Daniels contributed $20,000 cash in exchange for capital.

2 Paid monthly office rent, $2,000.

3 Paid cash for a computer, $3,600. This equipment is expected to remain in service

for five years.

4 Purchased office furniture on account, $3,000. The furniture should last for

five years.

5 Purchased office supplies on account, $800.

9 Performed consulting service for a client on account, $2,500.

12 Paid utilities expenses, $150.

18 Performed service for a client and received cash of $2,100.

21 Received $2,400 in advance for client service to be performed in the future.

21 Hired an administrative assistant to be paid $2,055 on the 20th day of each

month. The secretary begins work immediately.

26 Paid $200 on account.

28 Collected $400 on account.

30 Daniels withdrew $1,000.

Requirements

1. Journalize the transactions, using the following accounts: Cash; Accounts

Receivable; Office Supplies; Equipment; Furniture; Accounts Payable; Unearned

Revenue; Daniels, Capital; Daniels, Withdrawals; Service Revenue; Rent Expense;

and Utilities Expense. Explanations are not required.

2. Open a T-account for each of the accounts.

3. Post the journal entries to the T-accounts, and calculate account balances. Formal

posting references are not required.

4. Prepare trial balance as of December 31, 2016.

5. Prepare the income statement of Daniels Consulting for the month ended

December 31, 2016.

6. Prepare the statement of owner’s equity for the month ended December 31, 2016.

7. Prepare the balance sheet as of December 31, 2016.

8. Calculate the debt ratio for Daniels Consulting at December 31, 2016.

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