FINANCE

Part 1:

Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March:

March 1: Brooks invested $150,000 cash along with $22,000 of office equipment in the company.

March 2: Venture Consultants pre-paid $6,000 cash or six months’ rent for their office.

March 3: Venture Consultants made credit purchases for office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.

March 6:  Venture Consultants completed services for a client and immediately received $4,000 cash.

March 9:  Venture Consultants completed a $7,500 project for a client who must pay within 30 days.

March 12: Venture Consultants paid $4,200 cash to settle the account payable created on March 3.

March 19: Venture Consultants paid a $5,000 cash premium on a 12-month insurance policy.

March 22: Venture Consultants received $3,500 cash as a partial payment for the work completed on March 9.

March 25: Venture Consultants completed work for another client for $3,820 on credit.

March 29: Brooks withdrew $5,100 cash from the company for personal use.

March 30: Venture Consultants purchased $600 of additional office supplies on credit.

March 31: Venture Consultants paid $500 cash for this month’s utility bill.

Instructions:

Prepare journals for the above economic transactions. Use the file called “Assignment Template” in the assignment section for Part #1, Venture Capital Consultants. Enter your journals to the general ledger using the same file name.

Part 2:

The following unadjusted trial balance is for Power and Demolition Company as of year-end for the April 30, 2015 fiscal year. The April 30, 2015 credit balance of the owner’s equity account is $46,900, and the owner invested $40,000 cash in the company during 2015.

NO. Account Title Debit Credit
101 Cash $7,000  
126 Supplies $16,000  
128 Pre-paid insurance $12,600  
167 Equipment $200,000  
168 Accumulated depreciation – equipment   $14,000
201 Accounts payable   $6,800
251 Long-term notes payable   $30,000
301 Bonn, equity   $86,900
302 Bonn, withdrawals $12,000  
401 Demolition fees earned   $187,000
623 Wage expense $41,400  
633 Interest expense $3,300  
640 Rent expense $13,200  
683 Property tax expense $9,700  
684 Repairs expense $4,700  
690 Utilities expense $4,800  
       
  TOTALS $324,700 $324,700

Instructions: 

a) Journalize the following adjusting entries as of fiscal year-end April 30, 2015.

b) Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.

c) Create financial statements.

  1. The supplies available at the end of fiscal 2015 year are at a cost of $7,900.
  2. The cost of expired insurance for the fiscal year is $10,600.
  3.  Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 2015.
  4. The April utilities expense of $800 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded..
  5. The company’s employees have earned $2000 of accrued wages in the fiscal year.
  6. The rent expense not yet paid or recorded in the fiscal year is $3000.
  7. Additional property taxes of $550 have been assessed for the fiscal year, but have not yet been paid or recorded in the accounts.
  8. The $300 accrued interest for April has not yet been paid and reported.

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