Question

Passaic County Community College AC-101 Individual Typewritten Student Project The Complete Accounting Cycle Due Date: Mark Smith opened up Mark's Accounting Services on March 1,2016. During the month, the following transactions occurred: March 1 I Mark invested $20,000 cash in the business. Purchased two desk top computers, 2 and accessories for $10,000, paying $6,000 cash and the balance on account. 3 Purchased office supplies for $1,200 on account 5 Paid S3,600 cash on one-year liability insurance policy effective March 1. The policy covers errors and omissions -12 Billed customers $3,200 for accounting services 18 wed on Paid $2,000 cash on the amount owed on the equipment and $600 on the amount o the office supplies. 20 Paid $2,000 cash for employee salaries and wages. 21 Collected $1,400 cash from customers billed on March 12 25 Billed customers $7,000 for various accounting services. 31 Paid utility bill immediately upon receiving the bill, $300. 31 Withdrew $500 cash for personal use. The chart of accountsfomsAccounting Services contains the following aecounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation-Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 301 Smith, Capital, No. 306 Smith, Drawings, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Utility Expense, No, 634 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense Adjustment data: (1) Services provided but unbilled and uncollected at March 31 were $1,500. (2) Depreciation on equipment for the month was $400. (3) Expired insurance (hint: think. (4) An inventory count shows $400 of office supplies on hand at March 31. (5) Accrued but unpaid employee salaries and wages were $2.000. Instructions: This project, which must be completely typewritten, covers the entire accounting cycle. Blank accounting forms may be downloaded from the blackboard. Hand written (in whole or in part) submittals will not be accepted and will receive a grade of zero. 1. Joumalize and post the March transactions shown above. 2. Prepare a trial balance as of March 31 (use a worksheet). 3. Journalize and post the above adjustments. 4. Complete the worksheet thru and including the adjusted trial balance. S. Prepare the income statement, owner's equity statement, and classified balance sheet as of March 31. 6. Journalize and post all required closing entries

Answer 1

Solution:

1. Journal entries along with adjustments

				(in USD)
Date	A/c code	Particulars	Dr	Cr
01-Mar	101	Cash	20000
	301	Smith capital		20000
01-Mar	157	Equipment	10000
	101	Cash		6000
	201	Accounts payable		4000
03-Mar	128	Office supplies	1200
	201	Accounts payable		1200
05-Mar	130	Prepaid insurance	3600
	101	Cash		3600
12-Mar	112	Accounts receivable	3200
	400	Service revenue		3200
18-Mar	201	Accounts payable	2000
	201	Accounts payable	600
	101	Cash		2600
20-Mar	726	salaries and wages	2000
	101	Cash		2000
21-Mar	101	Cash	1400
	112	Accounts receivable		1400
25-Mar	112	Accounts receivable	7000
	400	Service revenue		7000
31-Mar	633	Utility Expense	300
	101	Cash		300
31-Mar	306	Drawings	500
	101	Cash		500
Adjustment entries
				(in USD)
Date	A/c code	Particulars	Dr	Cr
31-Mar	112	Accounts receivable	1500
	400	Service revenue		1500
31-Mar	711	Depreciation	400
	158	Accumulated depreciation		400
31-Mar	722	Insurance	300
	130	Prepaid insurance		300
31-Mar	634	supplies expense	800
	128	Office supplies		800
31-Mar	726	salaries and wages	2000
	212	salary and wages payable		2000

2. Trial balance

trial balance
Particulars	Dr	Cr
Cash	6400
Equipment	10000
salary and wages payable		2000
Office supplies	400
Insurance	300
Prepaid insurance	3300
Accounts receivable	10300
salaries and wages	4000
Smith capital		20000
Utility Expense	300
Drawings	500
Accounts payable		2600
supplies expense	800
Service revenue		11700
Depreciation	400
Accumulated depreciation		400
	36700	36700

3. Income statement and balance sheet

Income statement				Balance Sheet
Service revenue		11700		Assets	Amount	Liabilities	amount
				Plant property and equipment		Current liabilities
Total revenue		11700		Equipment	10000
Less: expenses				Accumulated depreciation	-400	Accounts payable	2600
salaries and wages	4000			Current assets		salary and wages payable	2000
Insurance	300			Cash	6400
Depreciation	400			Accounts receivable	10300	Capital and retained earnings
Utility Expense	300			Office supplies	400	Smith capital	20000
supplies expense	800			Prepaid insurance	3300	Retained earnings	5900
		5800				Drawings	-500
Net income		5900			30000		30000