For this project,
Part 1 – Create a
hypothetical service/merchandising company.
It must include sales of merchandise along with revenue from performing
services. You will determine your company name, services to be provided and the
product to be sold. You will be assigned
prices. You will include the following
on the first page of the project (see template):
service hour and per unit of product sold along with the cost of goods
unit of product sold is emailed to you)
Part 2 – General Journal (LO3-2) – Post the following journal entries to the
|1||Dec. 1|| Sell 45,000 shares of no-par value common stock|
for $130,000 to obtain the funds necessary to start your business.
|2||Dec. 1|| Borrow $30,000 from the local bank and sign a|
one-year note. Interest and principal
to be paid at maturity. The interest
rate is 6%.
|3||Dec. 1|| Purchase equipment necessary for business|
operations for $25,000 cash. The equipment has a five-year life with a
residual value of $4,000.
|4||Dec. 1|| Pay one year of rent in advance, $24,000|
($2,000 per month).
|5||Dec. 1|| Purchased vehicle for $40,000. It has a 4-year|
useful life with residual value of $4,000.
|6||Dec. 3||Purchase supplies on account, $1,000.|
|7||Dec. 3||Purchase 300 units of inventory with cash.|
|8||Dec. 6|| Provide 25 hours of services to|
customers for cash (calculate using your hourly service rate) no terms
|9||Dec. 10|| Sell 200 units of inventory on account.|
(Perpetual method = 2 entries)
|10||Dec. 12|| Sell 50 units of inventory to a customer on|
account with a sales discount of 2/10, n/30. (Perpetual method= 2 entries)
|11||Dec. 15|| Purchase an additional 300 units of inventory|
on account with terms 4/10 net 30.
|12||Dec. 20|| The customer who purchased product on December|
12th pays the amount due (within discount period).
|13||Dec. 23|| Receive cash in advance for 25 hours of|
services to be completed in the future.
|14||Dec. 25|| Company pays invoice for inventory purchased on December 15th within|
|15||Dec. 31|| Sell 200 units of inventory to a customer who signs a 6-month|
promissory note at 10% interest for the balance due. (end of month so no
interest would be accrued) perpetual method = 2 entries
|16||Dec. 31||Pay employee salaries, $4,000.|
|17||Dec. 31|| Pay cash dividends to shareholders,|
|18||Dec. 31|| Vehicle did not meet expectations sold back to|
dealership for $38,000. (Record depreciation at date of sale and then record
– General Ledger (LO3-2) – Post the information from the journal entries into
the general ledger an calculate balances.
Part 4 – Trial Balance (LO3-2) – Prepare a trial balance from the
information in the general ledger.
Part 5 – Adjusting journal Entries – (LO3-3) – Post the following adjusting
entries to the general journal
|Adj-1||Dec. 31|| Record|
the portion of the Prepaid Rent used in December.
|Adj-2||Dec. 31|| The|
company has $400 of supplies left at month end.
|Adj-3||Dec. 31|| Record|
one month of depreciation for the equipment purchased on December 1st. The equipment has a useful life of 5 years
and a $4,000 residual value.
|Adj-4||Dec. 31|| Provide|
10 hours of services that were paid in advance on December 23rd.
|Adj-5||Dec. 31|| Record|
the receipt of a December $300 utility bill to be paid on January 5th.
|Adj-6||Dec. 31|| Record|
accrued interest on the $30,000 – 1 year note payable. The annual interest rate is 6%. Interest is paid on note maturity.
|Adj-7||Dec. 31|| Employees|
earned $1,000 the last week in December that will be paid on January 10th
of next year.
|Adj-8||Dec. 31|| Estimate|
that 3% of the accounts receivable at the end of the year will not be
collected and record bad debt adjustment.
|Adj-9||Dec. 31|| Record|
Income Tax at a 21% rate to be paid next year.
Part 6 – General Ledger – Post the adjusting entries to the General
Part 7 – Adjusted Trial Balance (LO3-3) – Post the ending balances in each
account from the General Ledger to the Adjusted Trial Balance. Debits should equal credits if you have done
the prior steps correctly.
Part 8– Prepare the end of the year Income Statement (LO3-4).
Part 9 – Prepare the end of the year Retained Earnings Statement (LO3-4).
Part 10 – Prepare the end of the year Balance Sheet (LO3-4).
The post ACCOUNTING appeared first on Nursing Experts Help.