Professional Documents
Culture Documents
A
B
Name:
3
4
Final Project
6
7
8
9
10
11
12
It is recommended that you complete the nongraded requirements for additional practice
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14
15
16
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18
19
21
Requirements
Sheet in Workbook
22
23
Week One
Chapter 1 and 2 - Review the problem and make notes of
24 your answers.
Chapter 1 & 2
Notes
(PRACTICE)
25
Week Two
Chapter 3 - Part A, prepare journal entries to record the
26 November transactions
27 ledger accounts
28 30, 2011
29
Journal
Entries
(PRACTICE)
General
Ledger
(PRACTICE)
Trial
Balance
(PRACTICE)
Week Three
32 31, 2011
39
40 Chapter 13 - Financial Statement Analysis
6
7
8
1 (a)
Natalie should
open her
business as a
sole
proprietorship
at first. She is
the only
10
Owner and is
putting in her
own funds. The
benefits are that
she is the only
member.
11
The downfall is
that she
absorbs all of
the liabilities
and
consequences
personally.
12
A sole
proprietorship is
simple to
establish and
has tax
advantages that
the other
13
Forms of
business do not
offer.
14
15
1 (b)
Natalie will
indeed need
accounting
information for
tax purposes.
16
Accounting is
the information
that identifies,
records, and
communicates
the
17
Economic
events.
18
Accounting
information
system keeps
track of results
of each various
business
activity financing,
investing and
operating.
19
20
21
1 (c )
Natalie will
need the
following asset,
liability,
revenue, and
expense
accounts:
22
assets:
property, plant,
equipment,
cash, accounts
receivable,
supplies,
investments;
23
liabilities: notes
payable,
accounts
payable, sales
tax payable,
income taxes
payable
24
revenue: sales
revenue,
service
revenue;
25
Expenses:
costs of goods
sold, selling,
marketing,
interest, income
taxes.
26
27
28
1 (d)
Natalie should
open a
separate bank
account for her
business. Rule
No. 1 in owning
a business is
keeping
personal and
business
information and
accounts
separate.
29
1 (e )
30
31
32
2 (a)
Balance Sheet:
assets =
liabilities +
stockholders'
equity.
Income
Statement:
Revenues Expenses = Net
Income.
33
34
35
2 (b)
Natalie will
need to see
Biscuits Income
Statement to
evaluate the
36
Companys
ability to pay its
current
liabilities. She
should look for
37
The liability
ratio.
38
39
40
2 (c )
Natalie will
need to see
Biscuits
Balance Sheet
to evaluate the
company's
ability
To sustain long
term. She
should look for
the solvency
ratio.
41
42
2 (d)
43
44
45
2 (e )
Natalie would
want to see the
company's
solvency ratio
and debt to total
assets
ratio. This
information is in
the Cash Flows
Statement.
46
47
48
2 (f)
If Natalie's
company has
more cash than
it has valuable
opportunities it
should
49
Distribute its
excess cash as
a dividend.
50
51
52
53
2 (g)
Natalie also
needs to look at
the ratios,
which
expresses the
mathematical
Relationship
between one
quantity and
another.
REQUIREMENT
#1:
2
During its first
month of
operation, the
Rawls Repair
3
Corporation,
which
specializes in
bicycle repairs,
completed the
4 following
transactions:
5
6 Oct. 1
8
9 Oct. 1
10
11 Oct. 1
12
13 Oct. 3
14
15
Use the
following
Template for
the Journal
16 Entries from
Chapter 3:
Continuing
Cookie
Chronicle
17
18
19
20
a) Prepare
journal entries
21 to record the
November
transactions
22
23
General Journal
24
25 Date
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Description(Account Name)
8-Nov Cash
Debit
Credit
500
Common Stock
11-Nov Supplies
500
95
Cash
14-Nov Supplies
95
125
Cash
15-Nov Equipment
125
300
Common Stock
16-Nov Cash
300
2,000
Notes Payable
17-Nov Equipment
2,000
900
Cash
25-Nov Cash
Unearned Service Revenue
900
60
60
40
41
42
43
44
45
46
47
48
49
29-Nov Cash
100
Service Revenue
100
30-Nov Website
600
Accounts Payable
30-Nov Prepaid Insurance
600
1,200
Cash
30-Nov Accounts Receivable
1,200
300
Service Revenue
30-Nov Utilities Expense
300
50
Accounts Payable
50
Nov. 8Natalie cashes in her U.S. Savings Bonds and receives $520, which she
deposits in her personal bank account.
8
11
Cookie Creations purchases paper and other office supplies for $95. (Use
Supplies.)
14
Cookie Creations pays $125 to purchase baking supplies, such as flour, sugar,
butter, and chocolate chips. (Use Supplies.)
15
Natalie starts to gather some baking equipment to take with her when
teaching the cookie classes. She has an excellent top-of-the-line food processor and
mixer that originally cost her $550. Natalie decides to start using it only in her new
business. She estimates that the equipment is currently worth $300, and she
transfers the equipment into the business in exchange for additional common stock.
16
The company needs more cash to sustain its operations. Natalies
grandmother lends the company $2,000 cash, in exchange for a two-year, 9% note
payable. Interest and the principal are repayable at maturity.
17
18
Natalie schedules her first class for November 29. She will receive $100 on
the date of the class.
25
Natalie books a second class for December 5 for $150. She receives a $60
cash down payment, in advance.
29
Natalie teaches her first class, booked on November 18, and collects the $100
cash.
30
Natalies brother develops a website for Cookie Creations Inc. that the
company will use for advertising. He charges the company $600 for his work,
payable at the end of December. (Because the website is expected to have a useful
life of two years before upgrades are needed, it should be treated as an asset called
Website.)
30
30
Natalie teaches a group of elementary school students how to make Santa
Claus cookies. At the end of the class, Natalie leaves an invoice for $300 with the
school principal. The principal says that he will pass it along to the business office
and it will be paid sometime in December.
30
Natalie receives a $50 invoice for use of her cell phone. She uses the cell
phone exclusively for Cookie Creations Inc. business. The invoice is for services provided in November, and payment is due on December 15.
To record business cell phone December 15 amount payable
Cash
8
9 Nov. 8
500
Nov. 11
60
Nov. 17
12 Nov. 29
100
Nov. 30
1200
13
Equipment
95
Nov. 15
300
125
Nov. 17
900
900
Nov. 30 Bal.
340
Nov. 30 Bal.
1,200
14
15
16
17
18
19
Accounts Receivable
20 Nov. 30
300
Website
Nov. 30
600
21
22
23
24
Nov. 30 Bal.
300
Nov. 30 Bal.
600
25
26
27
28
29
Accounts Payable
Supplies
30
Nov. 30
600
Nov. 11 95
31
Nov. 30
50
Nov. 14 125
32
33
34
35
36
37
38
39
Nov. 30 Bal.
650
Nov. 30 Bal.
220
41
Prepaid Insurance
Nov. 30
1200
60
42
43
44
Nov. 30 Bal.
60
45
Nov. 30 Bal.
1200
46
47
48
49
50
Notes Payable
Common Stock
Nov. 16
2000
51
52
Nov. 8
500
Nov. 15
300
53
54
Nov. 30 Bal.
2000
55
Nov. 30 Bal.
800
56
57
58
59
Service Revenue
Utilities Expense
60
Nov. 29
100
61
Nov. 30
300
Nov. 30
50
62
63
Nov. 30 Bal.
400
64
Nov. 30 Bal.
50
2
Prepare a Trial
3 Balance for
November 30, 2011
4
5
6
7
Trial Balance
10
11
Debit
12
Credit
13 Cash
340
14 Accounts Receivable
300
15 Supplies
220
16 Prepaid Insurance
1,200
17 Equipment
1,200
18 Website
600
19 Accounts Payable
650
Unearned Service
Revenue
60
20
21 Notes Payable
2,000
22 Common Stock
800
23 Service Revenue
400
24 Utilities Expense
50
25
26
27 Total
3,910
3,910
28
29
REQUIREMEN
T #1:
2
During its first
month of
operation, the
Rawls Repair
3 Corporation,
which
specializes in
bicycle
repairs,
completed the
4 following
transactions:
5
6 Oct. 1
8
9 Oct. 1
10
11 Oct. 1
12
13 Oct. 3
14
15
16 Use the
following
Template for
the Journal
Entries from
Chapter 4:
Continuing
Cookie
Chronicle
17
a) Prepare
journal
entries to
18
record the
November
transactions
19
20
21
General Journal
22
23 Date
24
25
26
27
28
29
Description(Account Name)
5-Dec Cash
8-Dec Cash
9-Dec Cash
Cash
32
33
Cash
37
38
39
40
41
42
43
90
300
300
750
31
36
90
Accounts Receivable
35
Credit
Service Revenue
30
34
Debit
19-Dec Cash
750
50
50
600
600
60
60
3,000
Service Revenue
23-Dec Accounts Receivable
3,000
1,000
Service Revenue
23-Dec Supplies
1,000
1,250
Cash
23-Dec Salaries / Wages Expense
Cash
1,250
800
800
28-Dec Dividends
44
500
Cash
45
500
8,400
46
8,400
Dec. 1
Natalie hires an assistant at an hourly wage of $8 to help with cookie
making and some administrative duties.
5
Natalie teaches the class that was booked on November 25. The
balance out- standing is received.
8
Cookie Creations receives a check for the amount due from the
neighborhood school for the class given on November 30.
9
Cookie Creations receives $750 in advance from the local school board
for five classes that the company will give during December and
January.
15
16
Issues a check to Natalies brother for the amount owed for the design
of the website.
19
23
Additional revenue earned during the month for cookie-making classes
amounts to $4,000. (Natalie has not had time to account for
each
class individually.) $3,000 in cash has been collected and $1,000
is still outstanding. (This is in addition to the December 5 and December 9
transactions.) SEE PAGE 173-174
23 Additional baking supplies purchased during the month for sugar, flour,
and chocolate chips amount to $1,250 cash.
23 Issues a check to Natalies assistant for $800. Her assistant worked
approximately 100 hours from the time in which she was hired until December 23.
4. Interest on the note payable is accrued. (Assume that 1.5 months of interest
accrued during November and December.) Round to nearest dollar.
8. A cell phone invoice is received for $75. The invoice is for services provided
during the month of December and is due on January 15.
10. An analysis of the unearned revenue account reveals that two of the five classes
paid for by the local school board on December 9 still have not been taught by the
end of December. The $60 deposit received on December 19 for another class also
remains unearned.
A
1
2
3
REQUIREMENT #2:
6
7
8
Cash
Dividends
10
Dec. 15
50
Dec. 23
500
11
Dec. 5
90
Dec. 16
600
12
Dec. 8
300
Dec. 23
1250
13
Dec. 9
750
Dec. 23
800
14
Dec. 19
60
Dec. 28
500
15
Dec. 23
3000
16
17
18
19
Accounts Receivable
20
21
22
Dec. 23
1000
23
Dec. 31
1000
Dec. 8 300
Income Summ
24
25
26
27
28
29
Service Revenue
30
Supplies
Dec.
50
32
Dec. 5
Dec. 23
1250
Dec.
1025
33
Dec. 23
3000
34
Dec. 23
1000
35
36
Dec. 31 Bal.
4580
31
90
37
38
39
40
Utilities Expense
41
Prepaid Insura
42
Nov. 30 Bal.
50
Dec. 1
1200
Dec.
100
43
Dec. 31
75
Dec. 31 Bal.
1100
44
Dec. 31
125
45
46
47
48
49
50
Salaries & Wages Expense
51
52
Dec. 23
800
Equipment
Nov. 30 Bal.
1200
53
Dec. 31 Adj. 56
54
Dec. 31 Bal.
1200
55
56
57
58
59
60
Website
61
Dec. 31 Adj.
40
62
Dec. 31 Bal.
40
Dec.
25
63
64
65
66
67
68
69
70
Insurance Expense
71
Interest Expen
72
Dec. 31 Adj.
100
Dec. 31 Adj.
23
73
Dec. 31 Bal.
100
Dec. 31 Bal.
23
74
75
76
77
78
79
Accounts Payable
80
Depreciation Exp
81
Dec. 15
50
Dec. 31 Adj. 40
82
Dec. 16
600
Dec. 31 Adj. 75
Dec. 31 Bal. 40
83
84
Dec. 31 Bal. 75
85
86
87
88
Interest Payable
89
Notes Payab
90
Dec. 31 Adj.
23
Nov.
2000
91
Dec. 31 Bal.
23
Dec.
2000
92
93
94
95
96
97
Common Stock
98
99
Dec.
56
100
Dec.
56
1 Part C (Chapter 4)
2
3
4
Prepare a Trial
5 Balance for
November 30, 2011
6
7
8
Trial Balance
10
31-Dec
11
12
Debit
13
Credit
14 Cash
1,340
15 Accounts Receivable
1,000
16 Supplies
1,470
17 Prepaid Insurance
1,200
18 Equipment
1,200
600
19 Website
20 Accounts Payable
870
2,000
23 Common Stock
800
4,490
24 Service Revenue
50
25 Utilities Expense
26 Salaries and Wages Expense
800
27 Dividends
500
28 Total
8,160
8,160
29
30
3
4
5
6
General Journal
7
8 Date
9
Description(Account Name)
Debit
Credit
50
10
11
31-Dec
12
13
16
Depreciation
Expense
40
Accumulated
Depreciation
of Equipment
14
15
50
Supplies
40
31-Dec Amortization Expense
25
17
18
31-Dec
19
20
23
Interest
Expense
23
Interest
Payable
21
22
25
Website
23
31-Dec Insurance Expense
100
24
25
Prepaid
Insuranc
e
31-Dec
26
27
100
450
Accounts
Receivable
Service Revenue
28
450
31-Dec
29
30
1025
Supplies
1025
31
32
75
Accounts
Payable
33
75
34
35
56
Salaries and
Wages Payable
36
56
37
38
Supplies
Expense
360
Unearned
Service
Revenue
39
360
40
2204
41
2204
42
43
44
45
46
47
48
49
Adjusted TB (GRADED)
A
1
2
3
4
8
9
10 Cash
1340
11 Accounts Receivable
1450
12 Supplies
395
13 Prepaid Insurance
1100
14 Equipment
1200
15 Website
575
16 Accounts Payable
75
1230
18 Notes Payable
2000
19 Common Stock
800
20 Service Revenue
4580
21 Utilities Expense
125
856
23 Dividends
500
24 Supplies Expense
25 Depreciation Expense
26
1075
40
Accumulated Depreciation of
Equip
27 Amortization Expense
40
25
28 Interest Payable
29 Interest Expense
30 Insurance Expense
23
23
100
56
8804
33
34
8804
Chapter 4, Part F:
Prepare financial
statement
2
3
4
6
7
8
Cookie Creations
Income Statement
Statement of Retained Ea
10
11
12
Revenues:
13
14
Subtotal
15
Operating Expenses:
Less: Dividends
Retained Earnings, December
31
16
17
18
19
20
21
22
23
24
25
26
27
28
Net Income
$-
29
30
31
32
33
34
35
36
37
38
39
40
6
7
General
Journal
8
9 Date
Debit
Credit
Cookie Creations
Prepare
journal
entries to
record
the
Novembe
r
transacti
ons
6
7
General Journal
8
9 Date
Description(Account Name)
Debit
Credit
10
11 Nov. 8
12
13 Nov 8.
14
15 Nov. 8
16
Cash
500
Common Stock
500
17
18 Nov. 11
19
Supplies
95
Cash
95
20
21 Nov. 14
22
Supplies
125
Cash
125
23
24 Nov. 15
25
Equipment
300
Common Stock
300
26
27 Nov. 16
28
Cash
2,000
Notes Payable
2,000
29
30 Nov. 17
31
32
Equipment
Cash
900
900
33 Nov. 18
34
35 Nov. 25
Cash
60
36
60
37
38 Nov. 29
Cash
100
Service Revenue
39
100
40
41 Nov. 30
Website
600
Accounts Payable
42
600
43
44 Nov. 30
Prepaid Insurance
1,200
Cash
45
1,200
46
47 Nov. 30
Accounts Receivable
300
Service Revenue
48
300
49
50 Nov. 30
Utilities Expense
50
Accounts Payable
51
50
52
53
Total
54
6,230
6,230
Solutions
3
4
Post the
journal entries
to the
following
general ledger
accounts and
compute the
account
balances
5
6
Cash
7
8 Nov. 8
95
Nov. 15
300
2,000 Nov. 14
125
Nov. 17
900
10 Nov. 25
60
Nov. 17
900
Nov. 30 Bal
1,200
11 Nov. 29
100
Nov. 30
1,200
12
500
Nov. 16
Nov. 11
Equipment
Nov. 30 Bal.
340
13
14
15
16
17
18
Accounts Receivable
19 Nov. 30
20
Website
300
Nov. 30
Nov. 30 Bal.
300
600
Nov. 30 Bal.
600
21
22
23
24
25
26
27
28
Accounts Payable
Supplies
29
Nov. 30
600
Nov. 11
95
30
Nov. 30
50
Nov. 11
125
31
32
650
Nov. 30 Bal
220
33
34
35
36
37
38
39
40
Nov. 25
60
41
Prepaid Insurance
Nov. 30
60
1,200
Nov. 30 Bal.
1,200
42
43
44
45
46
47
48
49
Notes Payable
Common Stock
50
Nov. 16
2,000
51
Nov. 8
Nov. 15
300
52
53
54
55
56
57
58
500
Service Revenue
Utilities Expense
59
Nov. 29
100
Nov. 30
60
Nov. 30
300
Nov. 30 Bal.
61
Nov. 30 Bal.
400
50
50
1 Part C (Chapter 3)
2 Solutions
3
4
5
Trial Balance
8
9
10
11 Cash
Debit
Credit
$ 340
12 Accounts Receivable
300
13 Supplies
220
14 Prepaid Insurance
1,200
15 Equipment
1,200
16 Website
600
17 Accounts Payable
$ 650
60
19 Notes Payable
2,000
20 Common Stock
800
21 Service Revenue
400
22 Utilities Expense
23 Total
24
25
50
$ 3,910
$ 3,910