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Karla Tanner opens a Web consulting business called Linkworks and completes the following transactions in its first month of operations.
Apr-01Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
2The company prepaid $9,000 cash for 12 months’ rent for office space. The company’s policy is record preapid expenses accounts in the balnce sheet account
3The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
6The company completed services for a client and immediately received $4,000 cash.
9The company completed a $6,000 project for a client, who must pay within 30 days.
13The company paid $11,600 cash to settle the account payable created on April 3.
19The company paid $2,400 cash for the premium on a 12-month insurance policy. The company’s policy is record prepaid exp in Bal Sheet.
22The company received $4,400 cash as partial payment for the work completed on April 9.
25The company completed work for another client for $2,890 on credit.
28The company paid $5,500 cash in dividends.
29The company purchased $600 of additional office supplies on credit.
30The company paid $435 cash for this month’s utility bill.
Descriptions for items that require adjusting entries on April 30, 2015, follows
aon April 2 the company prepaid $9,000 cash for 12 month rent for office space
bThe balance in prepaid insurance represents the permium paid for a 12 month insurance policy, the coverage began on april 1.
cOffice supplies on hand as of April 30 total $1,200
dStraight line depreciation of office equipment based on 5 year life and a $4,000 salvage value, is $500 per month.
eThe company has completed work for a client, but has not yet billed the $1800 fee.
fWages due to employees, but not yet paid as of April 30 total $2,600.
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