Name : Benny Sasmita Soekamto

NIM : 13112310028
Class : 2K

Financial Accounting

Exercise: Completing Accounting Cycle in Service Company

Step 1
Analysis of Business
Transactions

Step 9
Post-closing Trial Balance Step 2
Make Journal Entries

Step 8 Step 3
Close Accounts Post to Ledger Account
ACCOUNTING
CYCLE

Step 7
Step 4
Prepare Financial
Prepare Trial Balance
Statement

Step 6 Step 5
Adjusted Trial Balance Make Adjusting Entries
 Step 1
Analysis of
Business
Transactions

Easy Move on Consulting Company (EMoC)

The following events occurred during its first month, 2017.

Jan 2 Issued ordinary shares in exchange for $40,000 cash.

2 Company pays $25,000 cash for equipment.
3 Company pays $1,500 cash for supplies.
4 Company purchase $7,000 of supplies on credit from supplier
(Air Supply).
10 Company pays $1,000 cash for January rent.
12 Company provides consulting services and immediately collects $4,500 cash.
13 Company pays $750 cash for employee salary.
18 Company provides consulting services. The customer is billed $2,900 for this service.
20 Company receives $2,900 cash from the client billed in transaction 18 January.
23 Company pays Air Supply $1,000 cash toward the payable in transaction 4.
25 Paid dividend $300.
26 Company receives $3,500 cash in advance of providing consulting services to a customer.
27 Company pays $3,600 cash (insurance premium) for a 24-months insurance policy.
Coverage begins on January 1
27 Company pays $750 cash in employee salary for work perform in latter part of January.
28 Company pays $180 cash for supplies
30 Company pays $220 cash for January utilities expense
 Step 2
Make journal
entries

1. Journalize each transaction:

EMoC uses the following chart of accounts
Assets = Liabilities + Equity
101 Cash 201 Account Payable 301 Share Capital
112 Account receivable 235 Unearned service revenue 305 Dividend
126 Supplies 240 Salaries payable 403 Service Revenue
127 Prepaid Insurance 622 Salaries expense
128 Equipment 640 Rent expense
650 Utilities expense
655 Supplies Expense
660 Depreciation expense
670 Insurance expense

General Journal Entries Page J1

Date Account Titles and Explanation Ref Debit Credit
.
2/1 Cash 101 40000
Share Capital 301 40000
2/1 Equipment 128 25000
Cash 101 25000
3/1 Supplies 126 1500
Cash 101 1500
4/1 Supplies 126 7000
Account Payable 201 7000
10/1 Rent Expense 640 1000
Cash 101 1000
12/1 Cash 101 4500
Service Revenue 403 4500
13/1 Salaries Expense 622 750
Cash 101 750
18/1 Account Receivable 112 2900
Service Revenue 403 2900
20/1 Cash 101 2900
Account Receivable 112 2900
23/1 Account Payable 201 1000
Cash 101 1000
25/1 Dividend 305 300
Cash 101 300
26/1 Cash 101 3500
Unearned Service Revenue 403 3500
27/1 Prepaid Insurance 127 3600
Cash 101 3600
27/1 Salaries Expense 622 750
Cash 101 750
28/1 Supplies 126 180
Cash 101 180
30/1 Utilities Expense 650 220
Cash 101 220
 33
Step 3 General Ledger
Post to ledger account

Cash No:101 Account payable No:201 Share Capital No:301

Date Ref Debit Credit Balance Date Ref Debit Credit Balance Date Ref Debit Credit Balance
2/1 J1 40000 40000 4/1 J1 7000 7000 2/1 J1 40000 40000
2/1 J1 25000 15000 23/1 J1 1000 6000
3/1 J1 1500 13500 Dividend No: 305
10/1 J1 1000 12500 Unearned service revenue No:235 Date Ref Debit Credit Balance
12/1 J1 4500 17000 Date Ref Debit Credit Balance 25/1 J1 300 300
13/1 J1 750 16250 26/1 J1 3500 3500
20/1 J1 2900 19150 Service revenue No:403
23/1 J1 1000 18150 Date Ref Debit Credit Balance
25/1 J1 300 17850 12/1 J1 4500 4500
26/1 J1 3500 21350 18/1 J1 2900 7400
27/1 J1 3600 17750
27/1 J1 750 17000 Salaries expense No:622
28/1 J1 180 16820 Date Ref Debit Credit Balance
30/1 J1 220 16600 13/1 J1 750 750
27/1 J1 750 1500
Account receivable No:112 Rent expense No:640
Date Ref Debit Credit Balance Date Ref Debit Credit Balance
18/1 J1 2900 2900 10/1 J1 1000 1000
20/1 J1 2900 0
Utilities expense No:650
Supplies No:126 Date Ref Debit Credit Balance
Date Ref Debit Credit Balance 30/1 J1 220 220
3/1 J1 1500 1500
4/1 J1 7000 8500
28/1 J1 180 8680
Prepaid Insurance No:127
Date Ref Debit Credit Balance
27/1 J1 3600 3600
Equipment No:128
Date Ref Debit Credit Balance
2/1 J1 25000 25000
 Step 4
Prepare Trial
Balance

Easy Move on Consulting Company

Trial Balance
31 January 2017
Account Debit Credit
Cash 16600
Account Receivable 0
Supplies 8680
Prepaid Insurance 3600
Equipment 25000
Account Payable 6000
Unearned Service Revenue 3500
Share Capital 40000
Dividend 300
Service Revenue 7400
Salaries Expense 1500
Rent Expense 1000
Utilities Expense 220

56900 56900

Step 5
Make Adjusting
Entries

Adjustment data on 31 January 2017 consist General Journal Entries Page J2

of: Page J1
a) Supplies on hand $7,000 Date Account Titles and Explanation Ref. Debit Credit
b) Insurance policy for 24 months and 2017 Adjusting Entries
will expires and record expense for 31/1 Supplies Expense 655 1680
this month Supplies 126 1680
c) The equipment is being depreciated 31/1 Insurance Expense 670 150
at $300 per month. Prepaid Insurance 127 150
d) Unearned service revenue of $2,500 31/1 Depreciation Expense-Equipment 660 300
should be recorded as service Accumulated Depreciation-Equipment 129 300
revenue prior 31 January 2017. 31/1 Unearned Service Revenue 235 2500
e) Salaries of $150 were unpaid at Service Revenue 403 2500
January 31, 2017 31/1 Salaries Expense 622 150
f) Invoice representing $2,400 of Salaries Payable 240 150
service performed during the month 31/1 Account Receivable 112 2400
have not been recorded as of Service Revenue 403 2400
January 31. 31/1 Utilities Expense 650 200
g) Utility bill for $200 has not been
Account Payable 201 200
recorded and will not be paid until
next month.
 Step 6
Adjusted Trial Using worksheet
Balance
Easy Move on Consulting Company
Worksheet
For the Month Ended January 31, 2017
Statement of Financial
Trial Balance Adjustments Adjusted Trial Balance Income statement Position
Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 16600 16600 16600
Account Receivable 0 (f) 2400 2400 2400
Supplies 8680 (a) 1680 7000 7000
Prepaid Insurance 3600 (b) 150 3450 3450
Equipment 25000 25000 25000
Account Payable 6000 (g) 200 6200 6200
Unearned Service Revenue 3500 (d) 2500 1000 1000
Share Capital 40000 40000 40000
Dividend 300 300 300
Service Revenue 7400 (d) 2500 12300 12300
(f) 2400
Salaries expense 1500 (e) 150 1650 1650
Rent expense 1000 1000 1000
Utilities expense 220 (g)200 420 420

Totals 56900 56900

Supplies expense Easy (a)

Move1680
on Consulting Company 1680 1680
Income Statements
Insurance expense (b) 150 150 150
For the Month Ended January 31, 2017
Depreciation expense-equipment Revenues (c) 300 300 300
Accumulated depreciation-equipment (c) 300 300 300
Service Revenue 12300
Salaries payable (e) 150 150 150
Expenses
Total Salaries Expense 16507380 7380 59950 59950 5200 12300 54750 47650
Step 7
Net Income Rent Expense 1000 7100 7100
Prepare Financial
TotalsStatements Utilities Expense 420 12300 12300 54750 54750
Supplies Expense 1680
Insurance Expense 150
Depreciation Expense 300 +
Total Expenses 5200 - Income
Net Income 7100 Statements
 Easy Move on Consulting Company
Retained Earnings Statements Retained
For the Month Ended January 31, 2017 Earnings
Retained Earnings, January 1 0
Statements
Add: Net Income 7100 +
7100
Less: Dividends Easy Move on Consulting Company 300 -
Statement of Financial Position
Retained earnings, January 31
For the Month Ended January 31, 2017
6800
Assets
Cash 16600
Account Receivable 2400
Less: Accumulated Depreciation - Equipment -300
Supplies 7000
Prepaid Insurance 3450
Equipment 25000 +
Total Assets 54150 of
Statements
Financial
Equities and Liabilities Positions
Equities
Share Capital 40000
Retained Earnings 6800 +
Total Equities 46800

Liabilities
Account Payable 6200
Unearned Service Revenue 1000
Salaries Payable 150 +
Total Liabilities 7350 +
Total Equities and Liabilities 54150
 Step 8
Closing Entries

General Journal Entries Page J3

Page J1
Date Account Titles and Explanation Ref. Debit Credit
2017 Closing Entries
31/1 Service Revenue 403 12300
Income Summary 350 12300
31/1 Income Summary 350 5200
Salaries Expense 622 1650
Rent Expense 640 1000
Utilities Expense 650 420
Supplies Expense 655 1680
Insurance Expense 670 150
Depreciation Expense 660 300
31/1 Income Summary 350 7100
Retained Earnings 310 7100
31/1 Retained Earnings 310 300
Dividend 305 300
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Universitas Prasetiya Mulya