Question

Accounting Cycle Review Project C. Brown recently expanded to open a 2nd fly fishing shop, CB's Fly Shop2. In order to finance the 2nd shop, C. Brown contributed $20,000 and raised another $50,000 from friends and family. With the additional cash, he is able to get his 2nd fly shop open and operational in June 2015. He is too busy with it being prime fishing season to do the accounting and has hired you to help him prepare financials for his 2nd shop. Required: Complete the following Accounting Cycle steps for the month of June. 1) Record all necessary journal entries for CB's Fly Shop 2 for the month ended June 30, 2015 (A list of transactions and additional information re: adjusting entries is provided on pages 2 and 3). 2) Post the transactions to T-Accounts (a chart of accounts is given on page 2) 3) Prepare a trial balance as of June 30, 2015. 4) Prepare (in good form) a multi-step income statement (see pg 76 for an example) for the month of June. Assume a 35% tax rate. 5) Prepare (in good form) a classified balance sheet as of June 30, 2015. (See pg 77) 6) Record all necessary closing entries Additional Information: • • You are allowed to work on this project in pairs (just make sure you include both of your names when you submit. I highly encourage you to use excel and link your journal entries, T-accounts, and financial statements. This will allow you to easily make changes. Your journal entries and financial statements must be typed. T-accounts can be done by hand and scanned in. • Chart of Accounts: No. Account Cash Accounts Receivable No. 101 106 Account Guiding Revenue Store Sales 403 404

Just need help with the first two questions, please!

Answer 1

Prepare Journal entries as follows:

Date	Account Titles	Debit	Credit
June
1	Cash	$70,000
	Common stock (14,000 shares × $5)		$70,000
1	Prepaid Insurance	$12,240
	Cash		$12,240
1	Cash	$25,000
	Note payable		$25,000
2	Rafts (2 × $6000)	$12,000
	Truck	$12,500
	Cash		$25,000
3	Prepaid Rent	$3,600
	Cash		$3,600
3	Cash	$5,000
	Unearned Guiding revenue		$5,000
4	Inventory-Fly rods (6 × $200)	$1,200
	Accounts payable		$1,200
4	Supplies for guides	$300
	Cash		$300
5	NO entry
6	Cash	$500
	Guiding revenue		$500
7	Cash	$1,600
	Stores sales		$1,600
	COGS (2 × $200)	$400
	Flyrod Inventory		$400
10	Cash	$2,500
	Guiding revenue		$2,500
15	Advertising expense	$60
	Cash		$60
17	Accounts payable	$1,200
	Cash		$1,200
18	Repair Expense	$200
	Accounts payable		$200
19	Wage expense (2 weeks × $1000)	$2,000
	Cash		$2,000
19	Wage expense (30 hrs × $15)	$450
	Cash		$450
22	Accounts receivable	$800
	Stores sales		$400
	Guiding revenue		$450
24	Wages expense ($2000+$450)/2	$1,225
	Wages payable		$1,225
27	Telephone expense	$150
	Cash		$150
28	Accounts payable	$200
	Cash		$200
29	Dividends	$200
	Cash		$200

________________________________________________________________________

Prepare Adjusting entries as follows:

Trn.	Account Titles	Debit	Credit
a	Insurance expense	$510
	Prepaid Insurance ($12240/2) × 1/12)		$510
b	Depreciation expense-Truck [($12500-$1500)/5 years] × 1/12	$183.33
	Accumulated Depreciation expense-Truck		$183.33
c	Depreciation expense-rafts ($12000/3years) × 1/12	$333.33
	Accumulated Depreciation expense-rafts		$333.33
d	Wage expense (35 hours × $15)	$525
	Wage payable		$525
e	Rent expense ($3600/3 months)	$1,200
	Prepaid rent		$1,200
f	Supplies expense ($300-$150)	$150
	Supplies for guides		$150
g	Interest expense ($25000 × 6%)	$1,500
	Interest payable		$1,500