COMPREHENSIVE ACCOUNTING CYCLE PROBLEMgroup Assignemnt I

Group Assignment - I (25%)
COMPREHENSIVE ACCOUNTING CYCLE PROBLEM

Part -1
For the past several years, Emily Page has operated a part-time consulting business from her home. As of June 1,
2010, Emily decided to move to rented quarters and to operate the business, which was to be known as Bottom
Line Consulting, on a full-time basis. Bottom Line Consulting entered into the following transactions during June:
June 1. The following assets were received from Emily Page: cash, $20,000; accounts receivable,
$4,500; supplies, $2,000; and office equipment, $11,500. There were no liabilities received.
1. Paid three months’ rent on a lease rental contract, $6,000.
2. Paid the premiums on property and casualty insurance policies, $2,400.
4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned
fees, $2,700.
5. Purchased additional office equipment on account from Office Depot Co., $3,500.
6. Received cash from clients on account, $3,000.
10. Paid cash for a newspaper advertisement, $200.
12. Paid Office Depot Co. for part of the debt incurred on June 5, $750.
12. Recorded services provided on account for the period June 1–12, $5,100.
14. Paid part-time receptionist for two weeks’ salary, $1,100.
17. Recorded cash from cash clients for fees earned during the period June 1–16, $6,500.
18. Paid cash for supplies, $750.
20. Recorded services provided on account for the period June 13–20, $3,100.
24. Recorded cash from cash clients for fees earned for the period June 17–24, $5,150.
26. Received cash from clients on account, $6,900.
27. Paid part-time receptionist for two weeks’ salary, $1,100.
29. Paid telephone bill for June, $150.
30. Paid electricity bill for June, $400.
30. Recorded cash from cash clients for fees earned for the period June 25–30, $2,500.
30. Recorded services provided on account for the remainder of June, $1,000.
30. Emily withdrew $5,000 for personal use.
Instructions
1. Journalize each transaction in a two-column journal, referring to the following chart of accounts in selecting the
accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.)
11 Cash 31 Emily Page, Capital
12 Accounts Receivable 32 Emily Page, Drawing
14 Supplies 41 Fees Earned
15 Prepaid Rent 51 Salary Expense
16 Prepaid Insurance 52 Rent Expense
18 Office Equipment 53 Supplies Expense
19 Accumulated Depreciation 54 Depreciation Expense
21 Accounts Payable 55 Insurance Expense
22 Salaries Payable 59 Miscellaneous Expense
23 Unearned Fees
2. Post the journal to a ledger of four-column accounts.
3. Prepare an unadjusted trial balance.
4. At the end of June, the following adjustment data were assembled. Analyze and use these data to complete
parts (5) and (6).
a. Insurance expired during June is $200.
b. Supplies on hand on June 30 are $650.
c. Depreciation of office equipment for June is $250.
d. Accrued receptionist salary on June 30 is $220.
e. Rent expired during June is $2,000.
f. Unearned fees on June 30 are $1,875.
5. Enter the unadjusted trial balance on an end-of-period spreadsheet (work sheet) and complete the
spreadsheet.
6. Journalize and post the adjusting entries.
7. Prepare an adjusted trial balance.
8. Prepare an income statement, a statement of owner’s equity, and a balance sheet.
9. Prepare and post the closing entries. (Income Summary is account #33 in the chart of accounts.) Indicate
closed accounts by inserting a line in both the Balance columns opposite the closing entry.
10. Prepare a post-closing trial balance.
Part II.
Work-out Questions
Some selected balances of DD Co. for year ended Dec-31-2022 are as follows with their
normal balances (in Birr)before adjustments:
Cash and Cash Equivalent 125,000 Owners’ Capital 40,000
Notes Receivables 45,000 Retained Earnings 75,000
Office Supplies 12,000 Sales Revenues 640,000
Prepaid Insurance 72,000 Interest Income 12,000
Inventory (Average Cost) 24,000 Cost of Goods Sold 320,000
Fixed Assets 120,000 Selling Expenses 21,000
Accum. Depr- Fixed assets 36,000 Salary and Wages Expense 105,000
Unearned Rent (Liability) 56,000 Rent Expense 15,000
Required
a. Prepare the necessary adjusting entries for the following items as not yet
recorded on Dec-31-2022:
i. The office supplies consumed during the year is Br 8,000
ii. The Unexpired part of insurance is only Br 26,000
iii. Br 30,000 is earned sales revenues from the unearned advance collection
iv. Salary and wages accrued as on 31-Dec-2022 amounts to be Br 18,000
v. Depreciation Expenses allocated for the year amounts to be Br 15,000
vi. There are accrued interest of Br 8,000 on the notes receivable
b. Prepare the following Financial Statements after adjustments on Dec-31-
2022.
i. Balance Sheet ii. Income Statement
c. Prepare closing journal entries after balances are adjusted and show the
final closing of Income Summary to Retained Earnings
Submission date: November 30

COMPREHENSIVE ACCOUNTING CYCLE PROBLEMgroup Assignemnt I

Uploaded by

Copyright:

Available Formats

COMPREHENSIVE ACCOUNTING CYCLE PROBLEMgroup Assignemnt I

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

COMPREHENSIVE ACCOUNTING CYCLE PROBLEMgroup Assignemnt I

Uploaded by

Copyright:

Available Formats

Group Assignment - I (25%)

COMPREHENSIVE ACCOUNTING CYCLE PROBLEM

Submission date: November 30

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.