Accounting Project

Accounting Project

Sheet1
On October 1, Thomas Edison organized Edison Consulting, on October 3, the owner contributed $75,000 cash. On October 31, the company’s records show the following items and amounts. Use this information to prepare the following statements: Income Statement, Statement of Owner’s Equity, Balance Sheet, and Statement of Cash Flows
Cash $12,000 Owner Withdrawals $2,500
Accounts Receivable $24,000 Consulting Fees Earned $25,000
Office Supplies $1,200 Rent Expense $4,500
Land $30,000 Salaries Expense $12,000
Office Equipment $15,000 Telephone Expense $250
Accounts Payable $1,950 Miscellaneous Expenses $500
Owner Investments $75,000
Income Statement for the Month Ended October 31
Revenues:
Consulting Fees Earned
Expenses:
Rent Expense
Salaries Expense
Telephone Expense
Miscellaneous Expense
Total Expenses
Net Income (loss)
Statement of Owner’s Equity for the Month Ended October 31
Edison, Capital October 1 $0
Add:
Investment by Owner
Net Income
Less:
Withdrawals by Owner
Net Loss
Edison, Capital, October 31
Balance Sheet as of October 31
Assets Liabilities
Cash Accounts Payable
Accounts Receivable
Office Supplies
Land Owner’s Equity
Office Equipment Edison, Capital
Total Assets Total Liabilities and Equity
Statement of Cash Flows for the Month Ended October 31
Assume the following when preparing the Statement of Cash Flows:
A. The owner’s initial investment consists of $45,000 in Cash and $30,000 in Land.
B. The company’s $15,000 equipment purchase is paid in Cash.
C. The company’s revenue consists of $1,000 in Cash and $24,000 in Accounts Receivable.
D. The company’s Accounts Payable consists of the $1,200 Office Supplies purchase and the $250 Telephone and $500 Miscellaneous Expenses
E. The company’s Rent and Salaries Expense is paid in Cash.
Cash flows from operating activities
Cash received from customers
Cash paid to employees
Cash paid for rent
Cash paid for telephone expenses
Cash paid for miscellaneous expenses
Net cash used by operating activities
Cash flows from investing activities
Cash paid for office equipment
Net cash used by investing activities
Cash flows from financing activities
Investments by owner
Withdrawals by owner
Net cash provided by financing activities
Net increase in cash
Cash balance, July 1 $0
Cash balance, July 31 $12,000
First, prepare general journal entries for the following transactions of Mater Consulting. Second, prepare T-Accounts (ledger) for the same transactions. Third, prepare a trail balance based on the same transactions.
June 1 Mater, the owner, invested $50,000 cash and $50,000 in office equipment.
4 The company paid $20,000 cash for an insurance policy covering the next 24 months
15 The company purchased office supplies for $800 cash
20 The company received $30,000 in consulting fees earned.
30 The company paid $1,000 for June utilities.
General Journal Entries:
June 1
4
15
20
30
T-Accounts:
Cash Office Equipment Utilities
Consulting Fees Insurance Expense Office Supplies
Owners, Capital
Trail Balance:
Account Name: Debit Credit
Cash
Office Equipment
Utilities
Consulting Fees
Insurance Expense
Office Supplies
Owners, Capital
Totals $130,000 $130,000
The Adjusted Trial Balance for Company follows. Complete the work sheet by extending the account balances into the appropriate financial statement columns and by entering the amount of net income for the reporting period.
Balance Sheet &
Adjusted Income Statement of
Trail Balance Statement Owner’s Equity
No. Account DR CR DR CR DR CR
101 Cash $10,000
106 Accounts Receivable $250,000
107 Inventory $50,000
153 Trucks $5,000
154 Accum Depr – Trucks $10,000
183 Land $40,000
201 Accounts Payable $15,000
209 Salaries Payable $5,000
233 Unearned Fees $5,000
301 Owner, Capital $100,000
302 Owner, Withdrawals $15,000
401 Plumbing Fees Earned $305,000
611 Depr Expense – Trucks $10,000
622 Salaries Expense $40,000
640 Rent Expense $15,000
677 Misc. Expense $5,000
Totals $440,000 $440,000
Net Income
Totals
Using your accounting knowledge, fill in the following separate income statements a through e. Identify any negative amount by putting it in parentheses.
Statements: a b c d e
Sales $100,000 $805,000 $450,000 $100,000
Cost of goods sold
Merchandise inventory (beginning) $10,000 $0 $100 $80,000 $25,000
Total Cost of merchandise purchases $30,000 $10,000
Merchandise inventory (ending) $10,000 ($10) ($50,000)
Cost of goods sold $30,000 $290,000 $90 $25,000
Gross Profit $320,000
Expenses $10,000 $150,000 $1,000 $400,000 $50,000
Net Income (loss) $365,000 $910 ($80,000)
On May 5, Hill Company sold 1,500 of the units for $20 per unit to Bunker Co. Terms of the sale were 2/10 n/60. Prepare entries for Hill Company to record the May 5 sale and each of the following separate transactions A through C using a perpetual inventory system. Please note that the inventory cost or value is $10 per unit.
A. On May 7, Bunker returns 200 units because they did not fit the customer’s needs Hill Company restores the units to its inventory.
B. On May 8, Bunker discovers 300 units are damaged but are still of some use and, therefore, keeps the units. Hill Company sends Bunker a credit memorandum for $1,000 to compensate for the damage.
C. On May 15, Bunker discovers that 100 units are the wrong color. Bunker keeps 60 of these units because Hill Company sends a $200 credit memorandum to compensate. Bunker returns the remaining 40 units to Hill Company. Hill Company restores the 40 returned units to its inventory.
Journal Entries:
May 5
Notes-
5
Notes-
May 7
Notes-
7
Notes-
May 8
Notes-
May 15
Notes-
15
Notes-
Sheet2
The following unadjusted trial balance contains the accounts and balances of Company as of December 31, 2015, its first year of operations. Use the following information about the company’s adjustments to complete a 10-column work sheet
a. Unrecorded depreciation on the trucks at the end of the year is $60,000
b. The total amount of accrued interest expense at year-end is $9,000
c. The cost of unused office supplies still available at the year-end is $2,000
Balance Sheet &
Unadjusted Adjusted Income Statement of
Trail Balance Adjustments Trail Balance Statement Owner’s Equity
No. Account DR CR DR CR DR CR DR CR DR CR
100 Cash $30,000
101 Accounts Receivable $10,000
102 Office Supplies $5,000
103 Trucks $250,000
104 Accum Depr – Trucks $50,000
105 Land $100,000
201 Accounts Payable $25,000
202 Interest Payable $5,000
203 Long-term Notes Payable $55,000
301 Owner, Capital $170,000
401 Owner, Withdrawals $50,000
501 Delivery Fees Earned $265,000
601 Depr Expense – Trucks $50,000
602 Salaries Expense $50,000
603 Office Supplies Expense $10,000
604 Interest Expense $5,000
605 Repairs Expense $10,000
Totals $570,000 $570,000
Net Income
Totals

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