Answer Key

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Requirement Part A 1 2 3 Part B 4 5 6 7 8 9 10

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Transcript of Answer Key

MenuACCT 212: Course Project 1RequirementRequirement DescriptionWorksheetPart A1Prepare the Journal Entries in the General JournalJournal Entries2Post Journal Entries to the General LedgerGeneral Ledger3Prepare a Trial BalanceTrial BalancePart B4Prepare the Adjusting EntriesAdjusting Entries5Post Adjusting Entries to the General LedgerGeneral Ledger6Prepare an Adjusted Trial BalanceAdjusted TB7Prepare the Financial StatementsFinancial Statements8Prepare the Closing EntriesClosing Entries9Post Closing Entries to the General LedgerGeneral Ledger10Prepare the Post Closing Trial BalancePost Closing TB

Click on the worksheet link to complete the corresponding Requirement or the Project Instructions button below for an overview.Project Instructions/xl/drawings/drawing1.xml#'Project%20Instructions'!A1Project Instructions Course Project #1 OverviewCourse Project #1 consists of two parts, A and B, respectively. There are 10 Requirements for you to complete in this exercise, Part A has 1-3 and Part B has 4-10. Part A&B is due on Wednesday, 18 July 2012. All of the information you need to complete Course Project #1 is located in this Workbook. There are 8 worksheets in the workbook you will need to complete for Parts A & B. A list of October 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.

ScenarioYouve just secured a new client in your accounting practice, the Rawls Repair Corporation, (RRC) a brand new small business specializing in bicycle repair. The owner, Rob Rawls, is a terrific cyclist and bike repair specialist, but definitely not an accountant. Your job is to help Rob put his affairs in order. Luckily Rob has only been in operation for a month and things have not gotten too out of hand yet! Rob has to submit his financial statements to his investors and doesnt know where to begin. Its your job to go through the complete Accounting cycle to prepare the financial statements for the RRC.

Requirements

Guidelines For Part A: Complete Requirements 1-3 on the Journal Entries, General Ledger, and Trial Balance worksheets. Type your work directly into the worksheets. Save your workbook as CourseProject1A_ ACCT212_YourLastNames. A total of 927 words disucssing the first 3 steps in the accounting cycle. Part A is it on spread sheet

For Part B: Using feedback from your instructor and Part A, complete Requirements 4-10. Type your work directly into the worksheets. Save your workbook as CourseProject1B_ACCT212_YourLastNames. A total of 927 words disucssing the 4-10 steps in the accounting cycle.Part B is it on spreadsheet

Before You Begin: Review the Week 2 Lecture prior to starting work on this project. Print the Chart of Accounts and October 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.

October TransactionsDuring its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs, completed the following transactions:

October TransactionsDateTransaction DescriptionOct. 1Began business by making a deposit in a company bank account of $12,000, in exchange for 1,200 shares of $10 par value common stock.Oct. 1Paid the premium on a one-year insurance policy, $1,200.Oct. 1Paid the current month's store rent expense, $1,040.Oct. 3Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance was placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1. Note: Use Accounts Payable for the Balance Due.Oct. 8Purchased repair supplies from McKenna Company on credit, $390.Oct. 12Paid utility bill for October, $154.Oct. 16Cash bicycle repair revenue for the first half of October, $1,362.Oct. 19Made payment to McKenna Company, $200.Oct. 31Cash bicycle repair revenue for the last half of October, $1,310.Oct. 31Declared and paid cash dividend of $800.

Chart of AccountsUse the following account descriptions for journal entries.

Chart of AccountsAccount TypeAccount NumberAccount TitleNormal BalanceAssets111Cash Debit117Prepaid Insurance Debit119Repair SuppliesDebit144Repair Equipment Debit145Accum Dep -Repair Equipment Credit

Liabilities212Accounts Payable Credit213Income Tax PayableCredit

Stockholders Equity311Common Stock Credit312Retained Earnings Credit313Dividends Debit

Revenue411Bicycle Repair RevenueCredit

Expenses511Store Rent Expense Debit512Utility Expense Debit513Insurance Expense Debit514Repair Supplies Expense Debit515Dep Expense - Repair Equipment Debit516Income Tax Expense Debit

Journal EntriesREQUIREMENT #1: Prepare journal entries to record the October transactions in the General Journal below. Remember that Debits must equal Credits - All of your Journal Entries should balance.General Journal
Nancy: Nicole the date and font needs to be consistant.

The Debit entry (Description) needs to be first with the Credit portion of the journal entry always be indented. Ideally a row would be left blank between the recording of each transaction. Take a look in the Textbook - Chapter 2 - for an example. Let me know if you have any questions.DateDescription (Account Name)DebitCreditOctober 1Cash12,000Common Stock12,000 Issued common stock at par for cash

October 1Prepaid Insurance1,200Cash1,200 Paid one year insurance policy

October 1Store Rent Expense1,040 Cash1,040 Paid one month store rent

October 3Repair Equipment4,400 Cash600 Accounts Payable 3,800 Purchase equipment from Conklin Company

October 8Repair Supplies390 Accounts Payable 390 Bought repair supplies from McKenna Company

October 12Utility Expense154 Cash154 Paid utilities for the month

October 16Cash1,362 Bicycle Repair Revenue1,362 Record cash revenue for the first half of the month

October 19Accounts Payable 200 Cash200 Partial payment of account for McKenna Company

October 31Cash1,310 Bicycle Repair Revenue1,310 Record cash revenue for second half of the month

October 31Dividends800 Cash800 Declared and paid cash dividends

22,856
Harris, Nicole: Debits = $22,85622,856
Harris, Nicole: Credits = $22,856

Journal Entries

Once you've completed this requirement print your General Journal to complete Requirement #2 on the General Ledger worksheet.

General LedgerREQUIREMENT #2: Post the October 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 $10,678.Bicycle Repair Revenue (411)12,0001,2001,3621,3621,0401,3101,3106002,6722,6721540Bal.20080014,6723,99410,678Ending Bal.14,67214,672

Prepaid Insurance (117)Store Rent Expense (511)1,2001001,0401,0401,100Ending Bal.0Bal.1,2001,200

Repair Supplies (119)Utility Expense (512)390196154154194Ending bal.0Bal.390390

Repair Equipment (144)Insurance Expense (513)4,4001001000Bal.

Accum. Depr.-Repair Equipment (145)Repair Supplies Expense (514)701961960Bal.

Accounts Payable (212)Depr. Exp.-Repair Equipment (515)2003,80070703900Bal.2004,1903,990Ending bal.4,1904,190

Income Taxes Payable (213)Income Taxes Expense (516)4040400Bal.

Common Stock (311)12,000

Retained Earnings (312)1,6002,6728002,4002,672272Ending bal.2,6722,672

Dividends (313)8008000Bal.

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 BalanceREQUIREMENT #3: Prepare a trial balance for October in the space below.Rawls Repair CorporationTrial BalanceOctober 31AccountBalance TitleDebitCreditCash10,678Prepaid Insurance1,200Repair Supplies390Repair Equipment4,400Accounts Payable3,990Common Stock12,000Dividends800Bicycle Repair Revenue2,672Store Rent Expense1,040Utility Expense154

18,662
User: Debit Balance = $18,66218,662
User: Credit Balance = $18,662

Journal Entries

Only enter accounts that have a balance.

Adjusting EntriesRequirement #4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) One month's insurance has expired. b) The remaining inventory of repair supplies is $194. c) The estimated depreciation on repair equipment is $70. d) The estimated income taxes are $40. Requirement #5: Post the adjusting entries on October 31 below to the General Ledger T-accounts and compute adjusted balances. Just add to the balances that are already listed. General JournalDateDescription (Account Name)DebitCreditOctober 31Insurance Expense100 Prepaid Insurance100Computations: to record expired portion of insurance policy1200 x 1/12 = 100 insurance expense390 - 194 = 196 repair supplies expenseOctober 31Repair Supplies Expense196 Repair Supplies196 to record repair supplies used

October 31Depreciation Expense - Repair Equipment70 Accumulated Depreciation - Repair Equipment70 to record depreciation of repair equipment

October 31Income Tax Expense40 Income Tax Payable40 to record estimated income taxes

406
Owner: $406406
Owner: $406

Journal Entries

Click here to go to the General Ledger worksheet to complete Requirement #5./xl/drawings/drawing7.xml#'General%20Ledger'!A1Adjusted TBREQUIREMENT #6: Prepare an Adjusted Trial Balance in the space below.Rawls Repair CorporationAdjusted Trial BalanceOctober 31AccountBalance TitleDebitCreditCash10,678Prepaid Insurance1,100Repair Supplies194Repair Equipment4,400Accumulated Depreciation - Repair Equipment70Accounts Payable3,990Income Tax Payable40Common Stock12,000Dividends800Bicycle Repair Revenue2,672Store Rent Expense1,040Utility Expense154Insurance Expense100Repair Supplies Expense196Depreciation Expense - Repair Equipment70Income Tax Expense40

18,772
User: Debit Balance = $18,77218,772
User: Credit Balance = $18,772

Journal Entries

Only enter accounts that have a balance.

Financial StatementsRequirement #7: Prepare the financial statements for Rawls Repair Corporation as of October 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.

Rawls Repair CorporationRawls Repair CorporationRawls Repair CorporationIncome StatementStatement of Retained EarningsBalance SheetFor the Month Ending October 31For the Month Ending October 31October 31

Revenues:- 0Retained Earnings, October 1Assets:Bicycle Repair Revenue2,672Add: Net Income1,072Cash10,678Total Revenue- 02,672Subtotal1,072Prepaid Insurance1,100- 0Less: Dividends800Repair Supplies194Expenses:- 0Retained Earnings, October 31272
User: Retained Earnings = $272

Repair Equipment4,400Store Rent Expense1,040Less: Accum. Depr.70Utility Expense154Total Assets16,302
User: $16,302Insurance Expense100Repair Supplies Exp.196Liabilities and Stockholders' EquityDepreciation Exp.70Liabilities:Income Taxes Exp.40Accounts Payable3,990 Total Expenses- 01,600Income Taxes Payable40- 0Total Liabilities4,030Net Income- 01,072
User: Net Income = $1,072

Stockholders' Equity:Common Stock12,000Retained Earnings272Total Stockholders' Equity12,272

Total Liabilities & Stockholders' Equity16,302
User: $16,302

Closing EntriesRequirement #8: Prepare the closing entries at October 31 in the General Journal below. Hint: use the balances for each account which appear on the Adjusted Trial Balance for your closing entries.

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 JournalDateDescription (Account Name)DebitCreditOctober 31Bicycle Repair Revenue2,672 Retained Earnings2,672to close revenue account

October 31Retained Earnings1,600 Store Rent Expense1,040 Utility Expense154 Insurance Expense100 Repair Supplies Expense196 Depreciation Expense - Repair Equipment70 Income Tax Expense40 to close expense accounts

October 31Retained Earnings800 Dividends800

5,072
Owner: $5,0725,072
Owner: $5,072

Journal Entries

Click here to go to the General Ledger worksheet to complete Requirement #9./xl/drawings/drawing9.xml#'General%20Ledger'!A1See the Week 2 Lecture for examples of how to complete closing entries.

Post Closing Trial BalanceRequirement #10: Prepare a post-closing trial balance as of October 31 in the space below.Rawls Repair CorporationPost-Closing Trial BalanceOctober 31AccountBalance TitleDebitCreditCash10,678Prepaid Insurance1,100Repair Supplies194Repair Equipment4,400Accumulated Depreciation - Repair Equipment70Accounts Payable3,990Income Tax Payable40Common Stock12,000Retained Earnings272

16,372
User: Debits = $16,37216,372
User: Credits = $16,372

Journal Entries