Answer:
Step-by-step explanation:Question Number 15:
The following transactions were completed during May, the second month of the business’s operations:
May
1. Shannon Burns made an additional investment in Dancing Music by depositing $3,000 in Dancing Music’s checking account.
1. Instead of continuing to share office space with a local real estate agency, Shannon decided to rent office space near a local music store. Paid rent for May, $1,600.
1. Paid a premium of $3,360 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a two-year period.
2. Received $1,200 on account.
3. On behalf of Dancing Music, Shannon signed a contract with a local radio station, KPRG, to provide guest spots for the next three months. The contract requires Dancing Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $2,400. Any additional hours beyond 80 will be billed to KPRG at $40 per hour. In accordance with the contract, Shannon received $4,800 from KPRG as an advance payment for the first two months.
3. Paid $250 on account.
4. Paid an attorney $150 for reviewing the May 3rd contract with KPRG. (Record as Miscellaneous Expense.)
5. Purchased office equipment on account from One-Stop Office Mart, $5,000.
8. Paid for a newspaper advertisement, $200.
11. Received $600 for serving as a disc jockey for a college fraternity party.
13. Paid $500 to a local audio electronics store for rental of digital recording equipment.
14. Paid wages of $1,200 to receptionist and part-time assistant.
16. Received $1,100 for serving as a disc jockey for a wedding reception.
18. Purchased supplies on account, $750.
21. Paid $240 to Rocket Music for use of its current music demos in making various music sets.
22. Paid $500 to a local radio station to advertise the services of Dancing Music twice daily for the remainder of May.
23. Served as disc jockey for a party for $1,560. Received $400, with the remainder due June 4, 2006.
27. Paid electric bill, $560.
28. Paid wages of $1,200 to receptionist and part-time assistant.
29. Paid miscellaneous expenses, $170.
30. Served as a disc jockey for a charity ball for $1,200. Received $600, with the remainder due on June 9, 2006.
31. Received $2,000 for serving as a disc jockey for a party.
31. Paid $600 royalties (music expense) to Federated Clearing for use of various artists’ music during May.
31. Withdrew $2,000 cash from Dancing Music for personal use.
Dancing Music’s chart of accounts and the balance of accounts as of May 1, 2006 (all normal balances), are as follows:
Instructions
1. Enter the May 1, 2006 account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark (✔) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)
2. Analyze and journalize each transaction in a two-column journal, omitting journal entry explanations.
3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting.
4. Prepare a unadjusted trial balance as of May 31, 2006
5. Prepare adjusting journal entries. You will need the following additional accounts:
18 accumulated Depreciation—Office Equipment 22 Wages Payable
57 Insurance Expense 58 Depreciation Expense
The data needed to determine adjustments for the two-month period ending May 31, 2006, are as follows:
a. During May, Dancing Music provided guest disc jockeys for KPRG for a total of 110 hours. For information on the amount of the accrued revenue to be billed to KPRG, see the contract described in the May 3, 2006.
b. Supplies on hand at May 31, $170.
c. The balance of the prepaid insurance account relates to the May 1, 2006.
d. Depreciation of the office equipment is $100.
e. The balance of the unearned revenue account relates to the contract between Dancing Music and KPRG, described in the May 3, 2006.
f. Accrued wages as of May 31, 2006, were $130. Instructions
6. Post the adjusting entries, inserting balances in the accounts affected.
7. Prepare an adjusted trial balance.
8. Prepare a ten-column work sheet.
9. Prepare an income statement, a statement of owner’s equity, and a balance sheet. (Note: Shannon Burns made investments in Dancing Music on April 1 and May 1, 2006.)
10. Journalize and post the closing entries. The income summary account is #33 in the ledger of Dancing Music. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.
11. Prepare a post-closing trial balance