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(Solved) (Latest ver. Aug 2020) - Journalize and Post Transactions and Income Statements

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Complete the following steps in the order given.
1. Journalize and post the transactions noted below for Victoria Consulting, Inc. during the
firm's first month of business. Note: Use the account titles and numbers in the chart of
accounts provided and round all calculations to the nearest whole dollar.
2. Prepare a 10-column worksheet using your knowledge of what has taken place during
January and the supplemental adjusting entry information provided.
3. Journalize and post all indicated adjusting entries.
4. Journalize and post all closing entries.
5. Prepare an income statement, a classified balance sheet, and a statement of retained
earnings in good form. Note: Blank statements are not provided; use a spreadsheet
program to prepare the required statements.
6. Prepare a post-closing trial balance.
Date Transaction
January 1 Issued 25,000 shares of $14 par value common stock in exchange for an
initial investment of $350,000 by the firm's owners, Siam Gato and Scotty
January 1 Purchased a one-year insurance policy for $3,600
January 2 Issued 2,000 shares of $14 par value common stock for office equipment
with a fair market value of $28,000.
January 2 Purchased land and an office building for $150,000, of which $120,000 was
attributable to the fair market value of the building. A $50,000 cash downpayment
was made and a 6% five-year note was signed for the balance.
Interest and 20% of the principal will be paid annually on this date.
(Assume a 360-day year for interest computation purposes.)
January 5 Purchased office supplies of $10,000 on account from Kilcoyne Office
January 6 Established a petty cash fund of $400.
January 7 Placed an order in the local newspaper for advertising, which will run during
January, February, and March beginning January 15. The advertising, which
cost $1,800, was paid for on this date in order to obtain a lower price.
January 10 Completed several consulting jobs, which totaled $75,000. Cash of $35,000
was collected with the balance due in 30 days.
January 15 Paid the semi-monthly payroll, which totaled $20,000, to the firm's
consultants, all of which are classified as independent contractors.
January 15 A client indicated that a $2,000 receivable due to Victoria would not be paid
for 6 months. Victoria accepted a 12% 6-month note receivable on this date.
January 16 Declared a cash dividend of $0.50 per share on this date payable on February
January 19 Paid Kilcoyne Office Supply $1,000 on the account balance.
January 30 Received the January telephone bill for $205.
January 31 Collected $10,000 of the receivable recorded on January 10.
January 31 Accrued the payroll for the second half of January.
January 31 Received various utility bills for January, which totaled $864.
January 31 Recorded consulting jobs completed during the last half of January that
totaled $105,000. $80,000 was collected in cash with the balance due in 30
January 31 An audit of the petty cash fund determined the following:
Postage $ 85
Freight-out 160
Misc. Exp. 45
Currency and Coin 115
The appropriate entry was recorded from the information above.
a. An inventory of office supplies found that $ XXXX of supplies remained
at January 31. (Use the last four digits of your student ID Number.) Do
Not Use the Single Digit to the right of the rest of the Numbers.
b. The building will be depreciated on a straight-line basis over 20 years
with $24,000 salvage value.
c. The equipment will be depreciated on a straight-line basis over 8 years
with $4000 salvage value.
d. An aging of accounts receivable indicated that, as of the balance sheet
date, $1,000 of accounts receivable would ultimately be uncollectible.
e. Income tax expense of 38% will be recorded on pre-tax accounting
f. Be aware that there might be other adjustments necessary in addition
to those indicated in items a through e above.
10 Cash
11 Petty Cash
15 Accounts Receivable
16 Allowance for Doubtful Accounts
18 Notes Receivable
19 Interest Receivable
20 Office Supplies
21 Prepaid Insurance
22 Prepaid Advertising
30 Office Equipment
31 Accumulated Depreciation, Office Equipment
50 Building
51 Accumulated Depreciation, Building
70 Land
200 Accounts Payable
210 Dividends Payable
220 Salaries Payable
230 Income Tax Payable
260 Notes Payable
265 Interest Payable
300 Common Stock
350 Retained Earnings
355 Dividends
400 Consulting Revenue
410 Interest Revenue
500 Salary Expense
502 Advertising Expense
505 Insurance Expense
509 Interest Expense
520 Telephone Expense
530 Utilities Expense
540 Repairs Expense
543 Postage Expense
544 Freight-out
550 Supplies Expense
561 Depreciation Expense, Office Equipment
562 Depreciation Expense, Building
563 Bad Debts Expense
580 Miscellaneous Expense
585 Income Tax Expense
590 Cash Over and Short
600 Income Summary


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