week 3

PROJECT #1 -THE COMPLETE ACCOUNTING CYCLE

Due Dates:Part A - Sunday at Midnight MST at the end of Week 3.Part B - Sunday at Midnight MST at the end of Week 5.

Project 1 is worth at Total of 75 Points, which is 7.5% of your Grade in the Course.Part A = 30 points and Part B = 45 points

MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.

There are 10 Sheets in the Workbook including this one.All of the Information you need for the Project is located in this Workbook.

Requirements Sheet in WorkbookPart A - Due in Week 2 - Requirement 1, 2 and 3

Requirement 1 - Prepare the Journal Entries in the General Journal Jounral EntriesRequirement 2 - Post Journal Entries to the General Ledger General LedgerRequirement 3 - Prepare a Trial Balance Trial Balance

Part B - Due in Week 5 - Requirements 4 - 10Requirement 4 - Prepare the Adjusting Entries Adjusting EntriesRequirement 5 - Post Adjusting Entries to the General Ledger General LedgerRequirement 6 - Prepare an Adjusted Trial Balance Adjusted TBRequirement 7 - Prepare the Financial Statements Financial StatementsRequirement 8 - Prepare the Closing Entries Closing EntriesRequirement 9 - Post Closing Entries to the General Ledger General LedgerRequirement 10 - Prepare the Post Closing Trial Balance Post Closing TB

Name: _____Andrea Boatman______________________________

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs,completed the following transactions:

Oct. 1 Began business by making a deposit in a company bank account of $12,000, in exchangefor 1,200 shares of $10 par value common stock.

Oct. 1 Paid the premium on a one-year insurance policy, $1,200.

Oct. 1 Paid the current month's rent, $1,040.

Oct. 3 Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance wasplaced on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.Note: Use Accounts Payable for the Balance Due.

Oct. 8 Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12 Paid utility bill for October, $154.

Oct. 16 Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19 Made payment to McKenna Company, $200.

Oct. 31 Cash bicycle repair revenue for the last half of October, $1,310.

Oct. 31 Declared and paid cash dividend of $800.

Prepare journal entries to record the October transactions in the General Journal below.

General JournalDate Description(Account Name) Debit CreditOct. 1 Cash 12000Oct. 1 Common Stock 12000Oct. 1 Insurance Expense 1200Oct. 1 Cash 1200Oct. 1 Rent Expense 1040Oct. 1 Cash 1040Oct. 3 Repair Equipment 4400Oct. 3 Cash 600Oct. 3 Accounts Payable 3800Oct. 8 Repair Supplies 390Oct. 8 Accounts Payable 390Oct. 12 Utility Expenses 154Oct. 12 Cash 154Oct. 16 Bicycle Repair Revenue 1362Oct. 16 Bicycle Repair Revenue 1362Oct. 19 Accounts Payable 200

This Sheet will be used for Requirements 2, 5 and 9

REQUIREMENT #2:

Post the October journal entries to the following T-Accounts and compute ending balances.

Cash (111) Bicycle Repair Revenue (411) $ 12,000 $ 1,362 $ 1,362 $ 1,200 $ 1,310 $ 1,310 $ 1,040 2672

$ 600 $ 154 $ 200 $ 800

Bal. $10678 Bal. $0

Prepaid Insurance (117) Store Rent Expense (511) $ 1,040

$1,100 1040

Bal. $0Repair Supplies (119) Utility Expense (512)

$ 390 $ 154 196 154

Bal. $194 Bal. $0

Repair Equipment (144) Insurance Expense (513) $ 4,400 $ 1,200 1100

$100

Bal. $4400 Bal. $0

Accum. Depr.-Repair Equipment (145) Repair Supplies Expense (514)

70 196 196

bal 70 bal 0

Accounts Payable (212) Depr. Exp.-Repair Equipment (515) $ 3,800 $ 390 70 70

$ 200 Bal. $3990

bal 0

A8

The balance of the Cash account after posting journal entries for Part A should be $10,678.

Income Taxes Payable (213) Income Taxes Expense (516)

40 40 40

bal 40 bal 0

Common Stock (311) $ 12,000

Bal. $12000

Retained Earnings (312)800 1072

bal 272

Dividends (313)

$ 800 800Bal. $0

REQUIREMENT #3:

Prepare a trial balance for October in the space below.

Rawls Repair CorporationTrial BalanceOctober 31

Account Title Debit CreditCash 10678Equipment 4400Supplies 390Accounts Payable 3990Insurance Expense 1200Rent Expense 1040Utility Expense 154Service Revenue 2672Common Stock 12000Dividends 800

18662 18662

B27

Debit Balance = $18,662

C27

Credit Balance = $18,662

Requirement #4:

Prepare adjusting entries using the following information in the General Journalbelow. Show your calculations!

a) One month's insurance has expired.

b) The remaining inventory of repair supplies is $194.

c) The estimated depreciation on repair equipment is $70.

d) The estimated income taxes are $40.

General JournalDate Description(Account Name) Debit Credita prepaid insurance 1100

insurance expense 1100

b repair supplies expense 196repair supplies 196

c depreciation expense 70accumulated depreciation 70

d tax expense 40tax payable 40

Requirement #5:

Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.Just add to the balances that are already listed.

Requirement #6:

Prepare an Adjusted Trial Balance in the space below.

Rawls Repair CorporationAdjusted Trial Balance

October 31

Debit Credit Cash 10678Equipment 4400Supplies 194Accounts Payable 3990Insurance Expense 100Rent Expense 1040Utility Expense 154Service Revenue 2672Common Stock 12000Dividends 800accumulated depreciation 70depreciation expense 70supplies expense 196prepaid insurance 1100tax expense 40tax payable 40

18772 18772

B27

Debit Balance = $18,772

C27

Credit Balance = $18,772

Requirement #7:

Prepare the financial statements for Rawls Repair Corporation as of October 31 in the space below.You will only be preparing the Income Statement, Statement of Retained Earning and the Balance Sheet.The Statement of Cash Flows is a required Financial Statement, but is not required for this Project.

Rawls Repair Corporation Rawls Repair CorporationIncome Statement Statement of Retained Earnings

For the Month Ending October 31 For the Month Ending October 31

Revenues: Retained Earnings, October 1 $ - Bicycle Repair Revenue 2,672 Add: Net Income 1,072

SubtotalExpenses: Less: Dividends -800Store Rent Expense 1,040 Retained Earnings, October 31 $272 Utility Expense 154Insurance Expense 100Repair Supplies Exp. 196Depreciation Exp. 70Income Taxes Exp. 40 Total Expenses 1,600

Net Income $1,072

F15

Retained Earnings = $272

C23

Net Income = $1,072

Prepare the financial statements for Rawls Repair Corporation as of October 31 in the space below.You will only be preparing the Income Statement, Statement of Retained Earning and the Balance Sheet.The Statement of Cash Flows is a required Financial Statement, but is not required for this Project.

Rawls Repair CorporationBalance Sheet

October 31

Assets:Cash 10,678Prepaid Insurance 1,100Repair Supplies 194Repair Equipment 4,400Less: Accum. Depr. -70Total Assets 16,302 16,302

Liabilities:Accounts Payable 3,990Income Taxes Payable 40Total Liabilities 4,030Stockholders' Equity:Common StockRetained Earnings 272Total Stockholders' Equity 12,000Total Liabilities & Stockholders' Equity $16,302

J17

$16,302

J28

$16,302

Requirement #8:

Prepare the closing entries at October 31 in the General Journal below.Hint: use the balances for each account which appear on the AdjustedTrial Balance for your closing entries.

General JournalDate Description (Account Name) Debit Credit

Bicycle Repair Revenue 2672income summary 2672

income summary 1600Store Rent Expense 1,040Utility Expense 154Insurance Expense 100Repair Supplies Exp. 196Depreciation Exp. 70Income Taxes Exp. 40

income summary 1072retained earning 1072

retained earning 800dividend 800

Requirement #9:

Post the closing entries to the General Ledger T-accounts and compute ending balances.Just add to the adjusted balances already listed.

Requirement #10:

Prepare a post-closing trial balance as of October 31 in the space below.

Rawls Repair CorporationPost-Closing Trial Balance

October 31

Cash 10678Equipment 4400Supplies 194Accounts Payable 3990Common Stock 12000accumulated depreciation 70prepaid insurance 1100tax payable 40retained earnings 272total 16372 16372

Project 1 Rubric - StudentsCriteria Excellent Good Poor

Parts: 90% to 100% 70% to 89% 50% to 69%Step 1 -Journal Entries (25pts)

Journal Entries use accurate accounts and amounts; and debits and credits are used correctly.

Journal Entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

Journal Entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

Step 2&3 -Posted and Unadjusted Trial Balance. (5pts)

Posting is correct leading to an accurate trial balance.

Posting is mostly correct leading to a mostly correct trial balance.

Posting has several errors leading to a trial balance with several errors.

Step 4 -Adjusting Journal Entries (10pts)




Step 5&6 -Posted and Adjusted Trial Balance. (5pts)




Step 7 -Financial Statements (15pts)

All four Financial Statements are prepared accurately and in an appropriate format.

Three of four Financial Statements are prepared accurately and mostly in an appropriate format, one statement has some errors.

Two of four Financial Statements are prepared accurately and mostly in an appropriate format, two statements have some errors.

Step 8 -Closing Journal Entries (10pts)




Step 9&10 -Posted and Post-closingTrial Balance. (5pts)




Very PoorLess than 50%

Journal Entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

Posting is done poorly or not at all, leading to inaccurate or no trial balance.



One or fewer of four Financial Statements are prepared accurately and mostly in an appropriate format, three or all statements have some errors.



week 3

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