Question

Case Study Full Accounting Cycle Melissa Days and Kelly Harbor formed the Corporation Sports R Us. They sell sporting goods and give lessons. They have hired you to update their transactions for the business. They have provided you with the opening balances and a list of transactions for the month of June. The company's Chart of Accounts is also included as shown below. The opening balances for the month of June are as follows: Sports R Us Balance Sheet As at May 31, 2019 Assets Liabilities Cash $37,000 Accounts Payable $9,800 Accounts Receivable 12,500 Unearned Revenue 4,200 Prepaid Insurance 9,250 Bank Loan 25,000 Office Supplies 5,000 Merchandise Inventory 8,750 Total Liabilities 39,000 Property, Plant & Equipment 95,000 Stockholder's Equity Accumulated Depreciation (23,000) Common Stock 70,000 Retained Earnings 35,500 Total Stockholder's Equity 105,500 Total Assets $144,500 Total Liabilities & Owners' Equity $144,500 Jun 1 Jun 12 Transactions for the month of June: Purchased sports equipment on account from Modern Furniture (to be recorded i Jun 7 Received cash from customers for various sports camps completed this week Jun 8 Paid rent for the month of June Jun 10 Prepaid insurance for one year Paid utility bill from May Jun 15 Paid bi-weekly wages to employees Paid interest on bank loan Jun 20 Received telephone bill to be paid next month Purchased office supplies from Office Barn on account Jun 25 Made principal payment on bank loan Paid cash dividends to stockholder's Jun 27 Purchased Inventory for the store on account from Sports World Record monthly cash sales for the store Jun 30 Record COGS for monthly sales Jun 15 $11,000 $24,250 $2,900 $2,400 $1,900 $5,750 $300 $650 $1,700 $4,000 $2,500 $11,500 $13,500 $8,750 Jun 22 Jun 26 Jun 30

Melissa Days and Kelly Harbor formed the Corporation Sports R Us. They sell sporting goods and give lessons. They have hired you to update their transactions for the business. They have provided you with the opening balances and a list of transactions for the month of June. The company’s Chart of Accounts is also included as shown below. Journalize the transactions for June 1 - June 30. Explanations optional

Answer 1

Date	Accounts titles and explanation	PR	Debit	Credit
June 1	Property, plant and equipment		$11,000
	Accounts payable			$11,000
	(To record purchase of equipment on account.)
June 7	Cash		$24,250
	Service revenue			$24,250
	(To record service revenue on cash.)
June 8	Rent expense		$2,900
	Cash			$2,900
	(To record rent expense paid.)
June 10	Prepaid insurance		$2,400
	Cash			$2,400
	(To record payment made in advance for prepaid.)
June 12	Account payable		$1,900
	Cash			$1,900
	(To record payment made to accrued utilities)
June 15	Salaries expense		$5,750
	Cash			$5,750
	(To record salaries expense paid.)
June 15	Interest expense		$300
	Cash			$300
	(To record interest expense paid.)
June 20	Telephone expense		$650
	Accounts payable			$650
	(To record telephone bill with paid in future)
June 22	Office supplies		$1,700
	Accounts payable			$1,700
	(To record purchase of office supplies on account.)
June 25	Bank loan		$4,000
	Cash			$4,000
	(To record principal of bank loan paid.)
June 26	Dividends		$2,500
	Cash			$2,500
	(To record dividends paid)
June 27	Merchandise Inventory		$11,500
	Accounts payable			$11,500
	(To record purchase of inventory on account.)
June 30	Cash		$13,500
	Sales revenue			$13,500
	(To record sales revenue on cash.)
June 30	Cost of goods sold		$8,750
	Merchandise Inventory			$8,750
	(To record cost of goods sold.)