31 Jan The Accounting Cycle Project consists of 10 Requirements for you to complete. All of the information you need to complete th
The Accounting Cycle Project consists of 10 Requirements for you to complete. All of the information you need to complete the Course Project is located in the attached Excel Workbook.
• There are eight worksheets in the workbook you will need to complete.
• A list of January transactions
• A Chart of Accounts reference sheet
• A Grading Rubric to help explain what is expected.
• Each worksheet has the Check Figures embedded as a comment.
Scenario:
Moonlight Bay Inn is incorporated on January 2, 2017, by its three owners, each of whom contributes $20,000 in cash in exchange for shares of stock in the business. In addition to the sale of stock, the following transactions are entered into during the month of January: (See January Transactions Tab)
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| ACCU 602: Assignment #1 Accounting Cycle Project | ||
| Requirement | Requirement Description | Worksheet |
| Part A | ||
| 1 | Prepare the Journal Entries in the General Journal | Journal Entries |
| 2 | Post Journal Entries to the General Ledger | General Ledger |
| 3 | Prepare a Trial Balance | Trial Balance |
| Part B | ||
| 4 | Prepare the Adjusting Entries | Adjusting Entries |
| 5 | Post Adjusting Entries to the General Ledger | General Ledger |
| 6 | Prepare an Adjusted Trial Balance | Adjusted TB |
| 7 | Prepare the Financial Statements | Financial Statements |
| 8 | Prepare the Closing Entries | Closing Entries |
| 9 | Post Closing Entries to the General Ledger | General Ledger |
| 10 | Prepare the Post Closing Trial Balance | Post Closing TB |
Click on the worksheet link to complete the corresponding Requirement or the Project Instructions button below for an overview.
Project Instructions
Project Instructions
| Course Project #1 Overview | ||
| The Accounting Cycle Project consists of 10 Requirements for you to complete. The Accounting Cycle Project is due at the end of Week 4. All of the information you need to complete the Course Project is located in this Workbook. • There are eight worksheets in the workbook you will need to complete. • A list of January transactions • A Chart of Accounts reference sheet • A Grading Rubric to help explain what is expected. • Each worksheet has the Check Figures embedded as a comment. | ||
| Scenario | ||
| Moonlight Bay Inn is incorporated on January 2, 2017, by its three owners, each of whom contributes $20,000 in cash in exchange for shares of stock in the business. In addition to the sale of stock, the following transactions are entered into during the month of January: (See January Transactions Tab) | ||
| Requirements | ||
| Guidelines | ||
| Use the embedded assistance in the template and guidance in your textbook. Should you have any questions contact your professor. | ||
Before You Begin: Review Chapters 3 and 4 (including appendices) Print the Chart of Accounts and January Transactions worksheets for your reference. You will need to refer to both throughout the project. Review the Grading Criteria. SAVE your work frequently in this workbook.
January Transactions
| During its first month of operation, Moonlight Bay Inn completed the following transactions. | ||
| January Transactions | ||
| Date | Transaction Description | |
| Jan. 2 | Began business by each of the three owners contributing $20,000 in cash each in exchange for shares of stock in the business. | |
| Jan. 2 | A Victorian inn is purchased for $50,000 in cash. An appraisal performed on this date indicates that the land is worth $15,000, and the remaining balance of the purchase price is attributable to the house. The owners estimate that the house will have an estimated useful life of 25 years and an estimated salvage value of $5,000. | |
| Jan. 3 | A two-year, 12%, $30,000 promissory note was signed at Second State Bank. Interest and principal will be repaid on the maturity date of January 3, 2019. | |
| Jan. 4 | New furniture for the inn is purchased at a cost of $15,000 in cash. The furniture has an estimated useful life of ten years and no salvage value. | |
| Jan. 5 | A 24-month property insurance policy is purchased for $6,000 in cash. | |
| Jan. 6 | An advertisement for the inn is placed in the local newspaper. Moonlight Bay pays $450 cash for the ad, which will run in the paper throughout January. | |
| Jan. 7 | Cleaning supplies are purchased on account for $950. The bill is payable within 30 days. | |
| Jan. 15 | Wages of $4,230 for the first half of the month are paid in cash. | |
| Jan. 16 | A guest mails the business $980 in cash as a deposit for a room to be rented for two weeks. The guest plans to stay at the inn during the last week of January and the first week of February. | |
| Jan. 31 | Cash receipts from rentals of rooms for the month amount to $8,300. | |
| Jan. 31 | Cash receipts from operation of the restaurant for the month amount to $6,600. | |
| Jan. 31 | Each stockholder is paid $200 in cash dividends. | |
Chart of Accounts
| Use the following account descriptions for journal entries. | ||||
| Chart of Accounts | ||||
| Account Type | Account Number | Account Title | Normal Balance | |
| Assets | ||||
| 111 | Cash | Debit | ||
| 117 | Prepaid Insurance | Debit | ||
| 119 | Cleaning Supplies | Debit | ||
| 144 | Furniture | Debit | ||
| 145 | Accum Dep -Furniture | Credit | ||
| 146 | House | Debit | ||
| 147 | Accum Dep -House | Credit | ||
| 148 | Land | Debit | ||
| Liabilities | ||||
| 212 | Accounts Payable | Credit | ||
| 213 | Notes Payable | Credit | ||
| 214 | Wages Payable | Credit | ||
| 215 | Utilities Payable | Credit | ||
| 216 | Rent Received in Advance | Credit | ||
| 217 | Interest Payable | Credit | ||
| 218 | Income Tax Payable | Credit | ||
| Stockholders Equity | ||||
| 311 | Retained Earnings | Credit | ||
| 312 | Capital Stock | Credit | ||
| 313 | Dividends | Debit | ||
| Revenue | ||||
| 411 | Revenue – Rental of Rooms | Credit | ||
| 412 | Revenue – Restaurant | Credit | ||
| Expenses | ||||
| 511 | Advertising Expense | Debit | ||
| 512 | Wages Expense | Debit | ||
| 513 | Insurance Expense | Debit | ||
| 514 | Supplies Expense | Debit | ||
| 515 | Utilities Expense | Debit | ||
| 516 | Depreciation Expense | Debit | ||
| 517 | Interest Expense | Debit | ||
| 518 | Income Tax Expense | Debit | ||
| Other | ||||
| 999 | Income Summary | Credit | ||
Journal Entries
| REQUIREMENT #1: Prepare journal entries to record the January transactions in the General Journal below. Remember that Debits must equal Credits—All of your Journal Entries should balance.(Omit explanations) | ||||
| General Journal | ||||
| Date | Description (Account Name) | Debit | Credit | Column1 |
| – 0 Harris, Nicole: Debits = $183,110 |
– 0 Harris, Nicole: Credits = $183,110 |
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Journal Entries
For Account Names use accounts as listed on the Chart of Accounts tab. Once you've completed this requirement print your General Journal to complete Requirement #2 on the General Ledger worksheet.
General Ledger
| REQUIREMENT #2: Post the January journal entries to the following T-Accounts and compute ending balances. | ||||||
| Cash (111) DeVry: The balance of the Cash account after posting journal entries for Part A should be $29,600 |
Accounts Payable (212) | Revenue – Rental of Rooms (411) | ||||
| Notes Payable (213) | ||||||
| Revenue – Restaurant (412) | ||||||
| Wages Payable (214) | ||||||
| Advertising Expense (511) | ||||||
| Prepaid Insurance (117) | ||||||
| UtilitiesPayable (215) | ||||||
| Wages Expense (512) | ||||||
| Cleaning Supplies (119) | ||||||
| Rent Received in Advance (216) | ||||||
| Insurance Expense (513) | ||||||
| Furniture (144) | ||||||
| Interest Payable (217) | ||||||
| Accum. Depr.-Furniture (145) | Supplies Expense (514) | |||||
| Income Tax Payable (218) | ||||||
| House (146) | Utilities Expense (515) | |||||
| Retained Earnings (311) | ||||||
| Accum. Depr.-House (147) | ||||||
| DepreciationExpense (516) | ||||||
| Capital Stock (312) | ||||||
| Land (148) | ||||||
| Interest Expense (517) | ||||||
| Dividends (313) | ||||||
| Income Taxes Expense (518) | ||||||
| Income Summary (999) | ||||||
This worksheet will be used to complete Requirements #2, #5 and #9. Instructions for #5 can be found on the Adjusting Entries Worksheet. Instructions for #9 can be found on the Closing Entries Worksheet.
Trial Balance
| REQUIREMENT #3: Prepare a trial balance for Janurary in the space below. | |||
| Moonlight Bay Inn Trial Balance January 31 | |||
| Account | Account | Balance | |
| # | Title | Debit | Credit |
| 0 User: Debit Balance = $106,830 |
0 User: Credit Balance = $106,830 |
||
Journal Entries
Only enter accounts that have a balance. List accounts in order of Account Number
Adjusting Entries
| Requirement #4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) Depreciation of the house b) Depreciation of the furniture c) Interest on the promissory note d) Recognition of the expired portion of the insurance e) Recognition of a portion of the guest's deposit f) Wages earned during the second half of January amount to $5,120 and will be paid on February 3. g) Cleaning supplies on hand on January 31 amount to $230. h) A gas and electric bill that is received from the city amounts to $740 and is payable by February 5. i) Income taxes are to be accrued at a rate of 30% of income before taxes. | |||
| Requirement #5: Post the adjusting entries on Janurary 31 below to the General Ledger T-accounts and compute adjusted balances. Just add to the balances that are already listed. (Omit explanations) | |||
| General Journal | |||
| Date | Description (Account Name) | Debit | Credit |
| 0 Bruce: Balance $8,852 |
0 Bruce: Balance $8,852 |
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Journal Entries
Click here to go to the General Ledger worksheet to complete Requirement #5.
/xl/drawings/drawing7.xml#'General%20Ledger'!A1
Area to Show Work:
Adjusted TB
| REQUIREMENT #6: Prepare an Adjusted Trial Balance in the space below. | |||
| Moonlight Bay Inn Adjusted Trial Balance January 31 | |||
| Account | Account | Balance | |
| # | Title | Debit | Credit |
| 0 User: Debit Balance = $114,222 |
0 User: Credit Balance = $114,222 |
||
Journal Entries
Only enter accounts that have a balance. List accounts in order of Account Number
Financial Statements
| Requirement #7: Prepare the financial statements for Moonlight Bay Inn as of January 31 in the space below. You will only be preparing the Income Statement, Statement of Retained Earning, and the Balance Sheet. The Statement of Cash Flows is a required Financial Statement, but is not required for this project. | ||||||||||
| Moonlight Bay Inn | Moonlight Bay Inn | Moonlight Bay Inn | ||||||||
| Income Statement | Statement of Retained Earnings | Balance Sheet | ||||||||
| For the Month Ending January 31 | For the Month Ending Janauary 31 | January 31 | ||||||||
| (enter figures in column B and totals in column C) | (enter figures in column I and totals in column J) | |||||||||
| Revenues: | Retained Earnings, January 1 | Assets: | ||||||||
| From rental of rooms | Add: Net Income | Current Assets: | ||||||||
| From restaurant | Subtotal | 0 | Cash | |||||||
| Total Revenue | 0 | Less: Dividends | Cleaning Supplies | |||||||
| Retained Earnings, October 31 | 0 User: Retained Earnings = $1,748 |
Prepaid Insurance | ||||||||
| Expenses: | Total current assets | – 0 | ||||||||
| Advertising | Property, Plant, and Euip.: | |||||||||
| Wages | Land | |||||||||
| Depreciation | House, net of accum. Depr. | |||||||||
| Interest | Furniture, net of accum. Depr. | |||||||||
| Insurance | Total Property, Plant, and Euip. | |||||||||
| Supplies | Total Assets | 0 User: $100,355 |
||||||||
| Utilities | ||||||||||
| Income Taxes | Liabilities and Stockholders' Equity | |||||||||
| Total Expenses | 0 | Liabilities: | ||||||||
| Current Liabilities: | ||||||||||
| Net Income | 0 User: Net Income = $2,348 |
Accounts Payable | ||||||||
| Interest Payable | ||||||||||
| Wages Payable | ||||||||||
| Income Taxes Payable | ||||||||||
| Rent received in advance | ||||||||||
| Utilities Payable | ||||||||||
| Total current liabilities | – 0 | |||||||||
| Long-term Debt: | ||||||||||
| Notes Payable | ||||||||||
| Total Liabilities | – 0 | |||||||||
| Stockholders' Equity: | ||||||||||
| Capital Stock | ||||||||||
| Retained Earnings | ||||||||||
| Total Stockholders' Equity | – 0 | |||||||||
| Total Liabilities & Stockholders' Equity | 0 Charms: $100,355 |
|||||||||
| User: Net Income = $2,348 | User: $100,355 | Charms: Enter as a negative number |
Closing Entries
| Requirement #8: Prepare the closing entries at January 31 in the General Journal below. Hint:Use the balances for each account which appear on the Adjusted Trial Balance for your closing entries.(Omit explanations) | ||||||||||
| Requirement #9: Post the closing entries to the T-Accounts on the General Ledger worksheet and compute ending balances. Just add to the adjusted balances already listed. | ||||||||||
| General Journal | ||||||||||
| Date | Description (Account Name) | Debit | Credit | EXAMPLE | ||||||
| 31-Jan Charms: Close out all revenue accounts |
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| 31-Jan Charms: Close out all expense accounts |
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| 31-Jan Charms: Close out income summary account to retained earnings |
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| Charms: Close out all revenue accounts | 31-Jan Charms: Close out Dividends to Retained Earnings |
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| 0 Bruce: Debit $31,380 |
Charms: Close out all expense accounts | 0 Bruce: Credit $31,380 |
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Journal Entries
Click here to go to the General Ledger worksheet to complete Requirement #9.
/xl/drawings/drawing9.xml#'General%20Ledger'!A1
For instructions on how to prepare closing entries, view this link: Closing Entries
https://accountingexplained.com/financial/cycle/closing-entries
Post Closing Trial Balance
| Requirement #10: Prepare a post-closing trial balance as of January 31 in the space below. | |||
| Moonlight Bay Inn Post-Closing Trial Balance January 31 | |||
| Account | Account | Balance | |
| # | Title | Debit | Credit |
| 0 User: Credits = $100,580 |
0 User: Credits = $100,580 |
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