Question

Part 1 (ALREADY DONE)

Create a mock merchandising company and demonstrate your knowledge of accrual basis accounting and the double-entry accounting system by creating a minimum of 10 original transactions spanning a period of 3 months (Jan. 1 – Mar. 31) and completing the requirements below. Assume your mock company is a new company that begins operations on Jan. 1^st. Beginning with a new company will be easier than an existing company as you will not have any beginning balances to deal with. The transactions should include examples of accruals and deferrals and at least one of each of the following: financing a new business (e.g. issuing stock or borrowing), obtaining assets, incurring liabilities, earning revenue, and incurring expenses.

Required (All 12 steps must be performed using EXCEL and be original work):

1) Write a list of at least 10 original transactions spanning a fiscal quarter (e.g. Jan.1 – March 31) and following the guidelines above. The first transaction should be a financing transaction (issue stock or borrow).

2) Journalize each transaction.

3) Post the journal entries to accounts and compute the ending balance (March 31) in each account.

4) Prepare a trial balance from ending account balances.

5) Write a list of at least 5 adjusting entries for the quarter-ended March 31 related to transactions prepared in step 1. Note that adjusting entries do not have an effect on the cash account.

6) Journalize the adjusting entries. Note that adjusting entries do not affect the cash account.

Transactions 2020 Jan 12 nalalalalalala Started business with cash $7000 and issued common stock, Dec 1 Paid $1100 rent in cash Jan Paid annuel Insurence $960 in cesh Jani! Purchase equipment $3600 for cash Feb. 5 Purchared Supplies $300 account. Feb 15 Receind Cesh $780 fanm selling mechaeliste Yen Feb.16 Sold mechandise item of $ 6100, payment will be received in April 2020, Feb.21 Rereind Cash $6100 for sale dated Feb.16 Mar. 23 Paid $ 170 to accounts payable for supplies Mar. 28 to staff $4200 in cash Poid $200 divicked in cash UUU Paid wajes 2 Man. 31

Part 2 (NEED)

Correct any mistakes that you made in Part 1. Continue through the accounting cycle using EXCEL and prepare each of the following documents.

7) Post the adjusting entries to accounts and compute the adjusted ending balance in each account.

8) Prepare an adjusted trial balance.

9) Prepare a balance sheet, income statement, and statement of retained earnings (in good form) from the adjusted trial balance as of and for the quarter-ended March 31^st.

10) Prepare closing entries.

11) Post closing entries to accounts and compute the post-closing account balances.

12) Prepare a post-closing trial balance.

Answer 1

Details Cash Amount Amount 7270 Details Beg. Bal End Bal. 7270 Common Stock Amount Amount 7000 Details Details Beg. Bal End Bal. Details 7000 Insurance expense Amount Amount Details 960) 720 Prepaid insurance Beg. Bal End Bal. 240 Rent expense Amount Amount 1100 550 Details Beg. Bal Rent payable Details End Bal. 1650

Details Equipment Amount Amount 3600 Details Beg. Bal End Bal. 3600 Account payable Amount Amount 130 Details Details Beg. Bal Supplies End Bal. 1301 Account Receivable Amount Amount 3400 Details Details Beg. Bal End Bal. 3400 Supplies Amount Amount 300 Details Details Beg. Bal 210 Supply expense End Bal. 90

Details Service revenue Amount Amount 13900 Details Beg. Bal End Bal. 13900 Wages Expense Amount Amount 4200 450 Details Beg. Bal Wages payable Details End Bal. 4650 Dividend Amount Amount 200 Details Details Beg. Bal End Bal. 200 Prepaid insurance Amount Amount Details Details Beg. Bal Insurance expense 720 End Bal. 720

Supply expense Amount Amount Details Details Beg. Bal Supply expense 210 End Bal. Details Beg. Bal Depreciation 210 Accumulated Depreciation Amount Amount Details 0 60 End Bal. 60 Depreciation Amount Amount Details Details Beg. Bal 0 Accumulated depreciation 60 End Bal. 60

Details Wages payable Details Amount Amount 0 Accumulated depreciation 450 Beg. Bal End Bal. 450 Rent payable Details Amount Amount Beg. Bal 0 Accumulated depreciation 550 Details End Bal. 550

7000 13900 Adjusted Trial Balance as on 31 March Cash 7270 Supplies 90 Equipment 3600 Insurance expense 240 Common Stock Rent expense 1650 Account Receivable 3400 Service revenue wages expense 4650 Prepaid rent 720 Account Payable Dividend 200 Supplies expense 210 Depreciation 60 Accumulated Depreciation Wages payable Rent payable Total 22090 130 60 450 550 22090

$ 13900 Income Statemet for the year ending 31 March Income: $ Service revenue Less Operating expenses Insurance expense 240 Rent Expense 1650 wages expense 4650 Supplies expense 210 Depreciation 60 Less Total Operating expenses Net income -6810 7090

$ $ 130 450 550 1130 Assets Current Assets Cash Supplies Account Receivable Prepaid insurance Total Current assets Total Current assets Long Term Assets Equipment Less accumulated depreciation Total Long Term Assets Balance Sheet at March 31 $ Liabilities & Equity Current Liabilities 7270 Account Payable 90 Wages Payable 3400 Rent payable 720 Total current liabilities 11480 Long Term Liaiblities Total Liabilities Equity 3600 Common Stock -60 Retained Earnings 3540 Less dividend Total Equity 15020 Total Liabilities & Equity 0 1130 7000 7090 -200 13890 15020 Total assets

$ $ 0 + Statement of retained earnings Retained Earnings Beginning Balance Net income Less dividend Retained earnings closing balance 7090 -200 6890

13900 13900 6810 Closing entries Service revenue Revenue Closing Revenue) Revenue Insurance expense Rent Expense wages expense Supplies expense Depreciation (Closing Expenses) 240 1650 4650 210 60

7000 0 Post closing Trial Balance as on 31 March Cash 7270 Supplies 90 Equipment 3600 Insurance expense 0 Common Stock Rent expense 0 Account Receivable 3400 Service revenue wages expense 0 Prepaid rent 720 Account Payable Dividend 0 Supplies expense 0 Depreciation Accumulated Depreciation Wages payable Rent payable Retained earnings Total 15080 130 60 450 550 6890 15080

Account balance posted could not be uploaded as it took much time.

Details Details Beg. Bal Revenu Net income Retained earnings Amount Amount 0 7090 200 Dividend End Bal. 6890