Jan 2 Completed a consulting engagement and received cash of $7,200.
2 Prepaid three months' office rent, $1,500.
7 Purchased software inventory on account, $3,900, plus freight in, $100.
15 Withdrew $500 for personal use.
18 Sold software on account, $1,100 (cost $700).
19 Consulted with a client for a fee of $900 on account.
20 Paid the secretary's salary for the month.
21 Paid on account, $2,000.
24 Paid utilities, $300.
28 Sold software for cash, $600 (cost $400).
31 Recorded these adjusting entries:
a) Accrued salary expense.
b) Depreciation of computer and furniture.
c) Expiration of prepaid rent.
d) Expiration of prepaid insurance.
e) Physical count of inventory, $2,800.
f) Earned the remaining revenue from December 22.
g) Dixie Lewis estimates that 3% of inventory sold will be returned
Required
1) Prepare journal entries for the above transactions and post these entries to the ledger.
2) Prepare adjusting entries on January 31 and post to the ledger.
3) Prepare an adjusted trial balance, an income statement, a statement of owner's equity,
and a balance sheet as of / on January 31, 2018.
4) Prepare closing entries at January 31, 2018 and post to the ledger.
5) Prepare a post-closing trial balance on January 31, 2018.
6) Write a letter to the CEO explaining the financial position of the company.
