Required: Please prepare journal entries to record each of the following transactions.

Northeastern University                            Fall 2016

Financial Accounting                                 Instructor: J. O'Brien

Exam 1                                                     Chapters 1-4    

1.  Required:  Please prepare journal entries to record each of the following transactions.  (each entry worth 2 points)

On August 1, 2016, Professor O’Brien launched a computer services company called Business Solutions, which provides consulting services, computer system installations, custom programming and web development. Professor planned on preparing financial statements quarterly but can’t wait and wants to see how his company is doing after only 1 month. 

The company’s initial chart of accounts follows.

Cash 101                                           Common Stock3 01

Accounts Receivable 106                              Dividends 302

Computer Supplies 126                       Computer Services Revenue 403

Prepaid Insurance 128                        Wages Expense 623

Office Equipment 163                         Advertising Expense 655

Computer Equipment 167                            Mileage Expense 676

Accounts Payable 201                         Rent Expense 677

Unearned Revenue 210                      Repairs Expense – Computer 684

August

1   Professor O’Brien invested $45,000 cash, a $20,000 computer system, and $8,000 of office equipment in the company and received common stock.

2   The company paid $1,300 cash for August rent.

3   The company purchased $1,420 of computer supplies on credit from Staples.

5   The company paid $2,220 cash for one year’s premium on a property and liability insurance policy.

6   The company billed Easy Leasing $4,800 for services performed in installing a new Web Server.

8   The company paid $1,420 cash for the computer supplies purchased from Staples on October 3.

10   The company hired Deb Long as a part-time assistant for $125 per day, as needed.

12   The company billed Easy Leasing another $1,400 for services performed.

15   The company received $4,800 cash from Easy Leasing as partial payment on its account.

17   The company paid $805 cash to repair computer equipment that was damaged when moving it.

20   The company paid $1,728 cash for advertisements published in the local newspaper.

22   The company received $1,400 cash from Easy Leasing on its account.

24   Received $1,500 down payment from Enterprise Rent-A-Car for a web design project that will begin in January 2015.

28   The company billed IFM Company $5,208 for services performed.

31   The company paid $875 cash for Deb Long’s wages for seven days’ work.

31   Professor O’Brien paid himself a $500 cash dividend.

All work should be completed in the journal tab of the excel workbook. 

2.  Required:  Please post Cash and Accounts Payable to the Ledger

(T Accounts) and indicate the correct balance for each.  (each worth 3 points)

All work should be completed in the t accounts – ledger tab of the excel workbook. 

3.  Required:  Please prepared a Trial Balance with the accounts arranged in correct order.  (worth 18 points)

J. O’Brien and Associates is a Real Estate Broker with 2 offices located in the Merrimack Valley.  The Ledger accounts and balance are listed below.

All work should be completed in the trial balance tab of the excel workbook. 

4.  Required:  Please prepare the adjusting entries for the following transactions.  (each entry worth 3 points)

1.  O’Brien Enterprises purchased pre-owned equipment on September 1, 2015 for $9,500. Salvage value is $1,500 with a 4 year useful life.  Annual Depreciation is $2,000 per year.  Prepare the monthly adjusting entry.

2.  On March 1, there was $150 of supplies available.  Wilson Enterprises purchased additional supplies for $1,000.  At March 31, an inventory of supplies showed $450 of supplies remained.  Prepare the March 31adjusting entry.

3. In February, Dr. O’Brien performs $8,000 of services for clients.  The clients have not been billed yet.  Prepare the February 28 adjusting entry.

4.  Employees at Putnam Investments worked the week ending March 31.  They will be paid in April.  Salaries amounted to $150,000.   Prepare the March 31 adjusting entry.

5.  On April 1, DWO Consulting received $15,000 in advance for services to be performed over the next 5 months.  If DWO completed one-third of the work, prepare the adjusting entry DWO Consulting would make

6.  On August 1, 2012, Kelly Company purchased a 1 year insurance policy for $1,200.  Prepare the adjusting entry would Kelly Co. make each quarter?

7. O’Brien’s Café received a bill from the electric company for electricity used.  The bill is for $325 and has not been paid yet.  Prepare the adjusting entry should the O’Brien’s Café make?

8.  On July 1, O’Brien Sports and Outdoors paid $8,000 to Russell Realty Group for 4 months rent beginning July 1.  If financial statements are prepared on August 31, what adjusting entry does O’Brien Sports need to make?

All work should be completed in the closing tab of the excel workbook.

5.  Required:  Please prepare Closing Entries and Update the Retained Earnings balance.  (worth 20 points)