Question

On January 1, Pulse Recording Studio (PRS) had the following account balances.

Accounts Payable	$	8,200
Accounts Receivable		6,900
Accumulated Depreciation—Equipment		6,700
Cash		3,640
Cash Equivalents		1,640
Common Stock		10,400
Deferred Revenue		3,900
Equipment		30,300
Notes Payable (long-term)		12,400
Prepaid Rent		3,420
Retained Earnings		4,810
Supplies		510

The following transactions occurred during January.

1. Received $2,420 cash on 1/1 from customers on account for recording services completed in December.
2. Wrote checks on 1/2 totaling $4,370 for amounts owed on account at the end of December.
3. Purchased and received supplies on account on 1/3, at a total cost of $200.
4. Completed $3,900 of recording sessions on 1/4 that customers had paid for in advance in December.
5. Received $4,750 cash on 1/5 from customers for recording sessions started and completed in January.
6. Wrote a check on 1/6 for $4,000 for an amount owed on account.
7. Converted $1,010 of cash equivalents into cash on 1/7.
8. On 1/15, completed EFTs for $1,400 for employees’ salaries and wages for the first half of January.
9. Received $2,940 cash on 1/31 from customers for recording sessions to start in February.

Required:

1. Prepare journal entries for the January transactions. Review the 'General Ledger' and the unadjusted 'Trial Balance' Tabs to see the effect of the transactions on the account balances.
2. Prepare journal entries for items (j)–(n) from the bank reconciliation.
   j. The bank deducted $470 for an NSF check from a customer deposited on January 5.
   k. The check written January 6 has not cleared the bank, but the January 2 payment has cleared.
   l. The cash received and deposited on January 31 was not processed by the bank until February 1.
   m. The bank added $4 cash to the account for interest earned in January.
   n. The bank deducted $4 for service charges.
3. Prepare adjusting journal entries on 1/31 in 'General Journal' Tab. (these are shown as items 15-21).
   o. Depreciation for the month is $240.
   p. Salaries and wages totaling $1,500 have not yet been recorded for January 16–31.
   q. Prepaid Rent will be fully used up by March 31.
   r. Supplies on hand at January 31 were $200.
   s. Received $200 invoice for January electricity charged on account to be paid in February but is not yet recorded.
   t. Interest on the promissory note of $28 for January has not yet been recorded or paid.
   u. Income tax of $1,700 on January income has not yet been recorded or paid.
4. Review the adjusted 'Trial Balance' as of January 31.
5. Prepare an income statement for the period ended January 31 in the 'Income Statement' Tab.
6. Prepare a bank reconciliation in the 'Bank Reconciliation' Tab.
7. Prepare a classified balance sheet as of January 31 in the 'Balance Sheet' Tab.
8. Using the information from the requirements above, complete the 'Analysis' tab.

Use the dropdowns to select the accounts properly included on the balance sheet. The unadjusted, or adjusted balances will appear for each account, based on your selection. Adjusted Pulse Recording Studio Balance Sheet At January 31 Equipment, net 0 Liabilities and Stockholders' Equity . . (3,938) (3,938) (3,938) $

Answer 1

1, 2 & 3 :

In the books of Pulse Recording Studio:

Transaction/ Event	Account Titles	Debit	Credit
January		$	$
a.	Cash	2,420
	Accounts Receivable		2,420
b.	Accounts Payable	4,370
	Cash		4,370
c.	Supplies	200
	Accounts Payable		200
d.	Deferred Revenue	3,900
	Recording Revenue		3,900
e.	Cash	4,750
	Recording Revenue		4,750
f.	Accounts Payable	4,000
	Cash		4,000
g.	Cash	1,010
	Cash Equivalents		1,010
h.	Salaries and Wages Expense	1,400
	Cash		1,400
i.	Cash	2,940
	Deferred Revenue		2,940
j.	Accounts Receivable	470
	Cash		470
k.	No journal entry required	0	0
l.	No journal entry required	0	0
m.	Cash	4
	Interest Revenue		4
n.	Bank Service Charge Expense	4
	Cash		4
o.	Depreciatio Expense	240
	Accumulated Depreciation: Equipment		240
p.	Salaries and Wages Expense	1,500
	Salaries and Wages Payable		1,500
q.	Rent Expense	1,140
	Prepaid Rent		1,140
r.	Supplies Expense	510
	Supplies		510
s.	Utilities Expense	200
	Accounts Payable		200
t.	Interest Expense	28
	Interest Payable		28
u.	Income Tax Expense	1,700
	Income Taxes Payable		1,700

5.

Pulse Recording Studio Income Statement For the month ended January 31
Revenues
Recording revenue	$ 8,650
Interest revenue	4
Total revenues		$ 8,654
Expenses
Salaries and Wages Expense	2,900
Supplies Expense	510
Rent Expense	1,140
Utilities Expense	200
Depreciation Expense	240
Bank Service Charge Expense	4
Interest Expense	28
Income Tax Expense	1,700
Total Expenses		6,722
Net Operating Income		$ 1,932

7.  

Pulse Recording Studio Balance Sheet January 31
Assets
Current Assets
Cash	$ 4,520
Cash Equivalents	630
Accounts Receivable	4,950
Supplies	200
Prepaid Rent	2,280
Total Current Assets		$ 12,580
Property Plant and Equipment
Equipment	30,300
Accumulated Depreciation: Equipment	(6,940)	23,360
Total Assets		$ 35,940
Liabilities and Stockholders Equity
Current Liabilities
Accounts Payable	230
Salaries and Wages Payable	1,500
Income Taxes Payable	1,700
Interest Payable	28
Deferred Revenue	2,940
Total Current Liabilities		6,398
Long Term Liabilities
Notes Payable		12,400
Total Liabilities		18,798
Stockholders Equity
Common Stock	10,400
Retained Earnings	6,742
		17,142
Total Liabilities and Stockholders Equity		$ 35,940