Question

Need help on questions 3 and 4 please!

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 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 403 Account Guiding Revenue Store Sales No. 101 106 404

Answer 1

From the information given above i have prepared journal entries, trial balance and income statement.

А C D E F Particulars Cr H Dr 1200 2400 2 Journal Entries for the month end of June 3, June Rent or ar 3600 Prepaid Rent To cash (Rent = (3600* 1)/3= 1200 Prepaid Rent = 3600-1200=2400) 5 1, June 70000 Particulars Cash To Common Stock (14000 shares @$5 each) 6 70000 5000 9 Cash To Unearned guiding revenue 1, June 5000 510 11730 11 12240 4, June 1200 12 Insurance Prepaid Insurance Cash (2 year premium for insurance For June month= (12240*1)/24 = 510 Prepaid Insurance = 12240-510 = 11730) Inventory-fly roads(6 Nos) To Accounts payable 1200 4, June 300 Supplies To Accounts payable 300 25000 25000 6, June 500 Cash To Guiding Revenue 500 125 7, June 1600 16 1, June Cash 17 Notes Payable 18 (Loan from Alpine Bank) 19 20 30, June Interest Expense 21 To Interest Expense payable 22 ( 25000*6%= 1500/12=125) 23 24 2, June Rafts ( 2*$6000) 25 Truck To cash Cash To Stores Sales 125 1600 7, June 400 Cost of goods sold To Inventory-fly roads 1200/6=200*2=400) 12000 12500 400 26 24500

A B H 28 29 10, June Cash 30 To Guiding Revenue 2500 200 2500 22, June Cost of goods sold To Inventory-fly roads (1200/6=200*1=200) 200 31 60 60 2500 24, June Unearned guiding revenue To Guiding Revenue (took half of trip = 5000/2 = 2500) 1200 32 15, June Advertising expense 33 To cash 34 35 17, June Accounts Payable 36 To cash 37 38 18, June Repair expense 39 To repair expense payable 1200 150 27, June Telephone bill To Cash 200 200 40 200 28, June Accounts Payable To cash 42 200 41 19, June Wages expense 2000 To cash 2000 43 (head guide salary = $1000/week = 1000* 2 weeks = 2000) 44 45 19, June Wages expense 46 To cash 450 (shop manager worked 30 hours *$15/hour = 30*15=450) 29, June Dividends To cash 450 47 48 30, June Depreciation-Truck 2148 To Accumulated Depreciation - Trucks 2148 (Truck value = 12240 Less: Salvage value = 1500 Depreciable amount = 10750 useful life = 5 years 10740/5 = 2148) 1250 49 22, June Account Receivable 50 To Store sales To Guiding revenue 800 450

57 53 54 30, June Depreciation- Rafts 4000 55 To Accumulated Depreciation - Rafts 4000 56 ( Rafts value = 12000, useful life = 3 years 12000/3 = 4000) 58 59 30, June Wages expense 2097 60 To Wages Payable 2097 ( Head guide = 1000/7 days = 143/day, Salary =1000+(143*4)=1572) (Shop manager = 35hours*$15/hour= 35*15=525) 63 54 30, June Supplies expense 150 To Supplies 150 66 (opening balance = 300 Less: ending balance = 150 68 supplies expense = 150) 61 62 65 67 70 71

MN Trial Balance Account Trial Balance Dr Cr 60450 1250 59501 2400 Cash Accounts Receivable Guiding Revenue Stores Sales Inventory-fly roads Supplies Prepaid Insurance Prepaid Rent Rafts 600 150 11730 2400 12000 12500 Truck 100 2148 2148 4000 4000 2097 Accounts Payable Depreciation - Truck Accumulated Depreciation- Trucks Depreciation- Rafts Accumulated Depreciation - Rafts Wages Payable Interest payable Repair payable Unearned guiding revenue Notes payable Common Stock Retained Earnings 125 200 2500 25000 70000

к N M 25000 70000 200 600 60 150 Notes payable Common Stock Retained Earnings Dividend Cost of goods sold Advertising Expense Telephone Expense Wages expense Insurance Interest Expense Rent Repair expense Supplies expense Total 4097 510 125 1200 200 150 114520 114520

Income Statement for the month ended june Particulars Amount Guiding Revenue 5950 Stores Sales 2400 Cost of goods sold 600 7750 Operating Expense Wages expense 4097 Rent 1200 Insurance 510 Advertising Expense 60 Telephone Expense 150 Depreciation 6148 Supplies expense 150 Repair expense 200 12515 Non Operating Expense Interest Expense 125 Net Loss from operations -4890