Module 5 Assignment Accounting

Start by reading and following these instructions:

1. Quickly skim the questions or assignment below and the assignment rubric to help you focus.

2. Read the required chapter(s) of the textbook.  Some answers may require you to do additional research on the Internet or in other reference sources.  Choose your sources carefully.

3. Consider the discussion and the any insights you gained from it.

4. Produce the Assignment submission in a single Microsoft Word or Open Office document.  Be sure to cite your sources, use APA style as required, check your spelling.

Assignment:

1. Sanchez Computer Center, continued.

 At the end of September, Tony took a complete inventory of his supplies and found the following:

• 5 dozen ¼" screws at a cost of $8.00 a dozen

• 2 dozen ½" screws at a cost of $5.00 a dozen

• 2 cartons of computer inventory paper at a cost of $14 a carton

• 3 feet of coaxial cable at a cost of $4.00 per foot

After speaking to his accountant, he found that a reasonable depreciation amount for each of his long-term assets is as follows:

• Computer purchased July 5, 201X Depreciation $33 a month

• Office equipment purchased July 17, 201X Depreciation $10 a month

• Computer workstations purchased Sept. 17, 201X Depreciation $20 a month

Tony uses the straight-line method of depreciation and declares no salvage value for any of the assets. If any long-term asset is purchased in the first 15 days of the month, he will charge depreciation for the full month. If an asset is purchased on the 16th of the month, or later, he will not charge depreciation in the month it was purchased.

August and September’s rent has now expired.

Tasks

Use your trial balance from the completed problem previously and the adjusting information given here to complete the worksheet for the three months ended September 30, 201X. From the worksheets, prepare the financial statements.

Tony decided to end the Sanchez Computer Center’s first year as of September 30, 201X. Following is an updated chart of accounts.

Chart of Accounts

Assets                                                    Revenue

1000 Cash                                              4000 Service Revenue

1020 Accounts Receivable                    Expenses

1025 Prepaid Rent                                 5010 Advertising Expense

1030 Supplies                                        5020 Rent Expense

1080 Computer Shop Equipment           5030 Utilities Expense

1081 Accum. Depr. C. S. Equip.            5040 Phone Expense

1090 Office Equipment                          5050 Supplies Expense

1091 Accum. Depr. Office Equip.          5060 Insurance Expense

Liabilities                                               5070       Postage Expense

2000 Accounts Payable                         5080 Depr. Exp. C. S. Equip.

Owner’s Equity                                      5090 Depr. Exp. Office Equip.

3000 T. Freedman, Capital                   

3010 T. Freedman, Withdrawals            

3020 Income Summary                         

Complete the following:

a. Journalize the adjusting entries.

b. Post the adjusting entries to the ledger.

c. Journalize the closing entries.

d. Post the closing entries to the ledger.

e. Prepare a post-closing trial balance.

2. As the bookkeeper of Parker’s Plowing, you have been asked to complete the entire accounting cycle for Parker from the following information.

 201X

Jan. 1    Parker invested $14,000 cash and $9,000 worth of snow equipment into the plowing company.

Jan. 1    Paid rent for five months in advance for garage space, $3,500.

Jan. 4    Purchased office equipment on account from Liliis Corp., $12,600.

Jan. 6    Purchased snow supplies for $500 cash.

Jan. 8    Collected $15,000 from plowing local shopping centers.

Jan. 12  Parker Muroney withdrew $5,000 from the business for his own personal use.

Jan. 20  Plowed Holiday Co. parking lots, payment not to be received until March, $7,000.

Jan. 26  Paid salaries to employees, $1,400.

Jan. 28  Paid Liliis Corp. one-half amount owed for office equipment.

Jan. 29  Advertising bill received from Carter Co. but will not be paid until March, $600.

Jan. 30  Paid telephone bill, $200.

Use the following chart of accounts.

Chart of Accounts

Assets                                                                      Owner Equity

111   Cash                                                                311  Parker Muroney, Capital

112   Accounts Receivable                                      312  Parker Muroney, Withdrawals

114   Prepaid Rent                                                   313  Income Summary

115   Snow Supplies                                                 Revenue

121   Office Equipment                                            411  Plowing Fees

122   Accumulated Depreciation, Office Equipment  Expenses

123   Snow Equipment                                             511  Salary Expense

124   Accumulated Depreciation, Snow Equipment 512       Advertising Expense

Liabilities                                                                 513 Telephone Expense

211   Accounts Payable                                           514  Rent Expense

212   Salaries Payable                                             515  Snow Supplies Expense

                                                                        516  Depreciation Expense, Office Equipment

                                                                                 517  Depreciation Expense, Snow Equipment

From the following transactions as well as additional data, please complete the entire accounting cycle for Parker’s Plowing (use the chart of accounts above) for 201X.

Jan. 1  Parker invested $10,000 cash and $12,000 worth of snow equipment into the plowing company.

Jan. 1  Paid rent for six months in advance for garage space, $6,000.

Jan. 4  Purchased office equipment on account from Lumen Corp., $12,600.

Jan. 6  Purchased snow supplies for $800 cash.

Jan. 8  Collected $14,000 from plowing local shopping centers.

Jan. 12      Parker Muroney withdrew $4,000 from the business for his own personal use.

Jan. 20      Plowed Alton Co. parking lots, payment not to be received until May, $1,500.

Jan. 26      Paid salaries to employees, $1,900.

Jan. 28      Paid Lumen Corp. one-half amount owed for office equipment.

Jan. 29      Advertising bill received from Washington Co. but will not be paid until May, $700.

Jan. 30 Paid telephone bill, $130.

Adjustment Data

a. Snow supplies on hand, $700.

b. Rent expired, $1,000.

c. Depreciation on office equipment, $210: ($12,600/5 yr = $2,520/12 mo. = $210).

d. Depreciation on snow equipment, $200: ($12,000/5 yr = $2,400/12 mo. = $200).

e. Accrued salaries, $380.

3. Todd Silver is the purchasing agent for Moore Co. One of his suppliers, Gem Co., offers Todd a free vacation to France if he buys at least 75% of Moore’s supplies from Gem Co. Todd, who is angry because Moore Co. has not given him a raise in over a year, is considering the offer. Write your recommendation to Todd.

4. Using the trial balance in Figure 18, and adjustment data of Kyler’s Moving Co., prepare

a. A worksheet for the month of January.

b. An income statement for January, a statement of owner’s equity for January, and a balance sheet as of January 31, 201X.

 Adjustment Data to Update Trial Balance

 a. Insurance expired, $450.

 b. Moving supplies on hand, $400.

 c. Depreciation on moving truck, $350.

 d. Wages earned but unpaid, $180.

Kyler’s Moving Co.

Trial Balance

January 31, 201X

                                                                          Debits                      Credits

A. Cash                                                           11,000.00

B.                                                       Prepaid Insurance                1,800.00

C.                                                         Moving Supplies                1,000.00

D.                                                              Moving Truck              16,000.00

E. Accumulated Depreciation, Moving Truck                                5,500.00

F. Accounts Payable                                                                      2,700.00

G. K. Hilton, Capital                                                                      19,228.00

H. K. Hilton, Withdrawal                                    1,300.00

I.   Revenue from Moving                                                                8,300.00

J. Wages Expense                                            3,150.00

K.  Rent Expense                                                  775.00

L. Advertising Expense                                        703.00

Totals                                                                35,728.00              35,728.00