PRINCIPLES OF ACCOUNTING I ACCT 1010 HOMEWORK PROJECT One homework project is assigned this semester. This assignment is a long, comprehensive problem
... [Show More] meant to reinforce and solidify your grasp of the accounting cycle. The Homework Project is to be completed by hand using hard copy working papers. The purpose of this requirement is that students generally have a greater comprehension of the complete accounting cycle by processing the steps by hand. Preparation: Complete the required steps for the project preparing your work in pencil using the hard copy working papers included in this document. Your work should be neat and legible. Refer to the handout on Formatting Rules for Journals (Lesson 2) when preparing your journal entries. You may omit explanations in the journal. Refer to pages 112-113 in your textbook for an example of how to format the financial statements. Submitting Your Project: On ground students will submit the project in class on the due date. Online students will submit the project in hard copy by mailing it to the following address. Projects submitted by mail must be postmarked by the project due date. Paul Koulakov Business Technologies Department Nashville State Community College 120 White Bridge Road Nashville, TN 37209 Due Date: See syllabus Grade Impact & Academic Integrity: This homework project will be worth 5% of your overall course grade. No project grades will be dropped--failure to submit a homework project will result in a grade of -0- for this assessment. Submitting work copied from another source is a violation of the Academic Dishonesty Policy and will result in a grade of -0- for the project. Grading Criteria: This project will be graded on a 100 point scale based on completeness, accuracy, and neatness as shown in the grading details below. Grading Details: Item Points Journal Entries 20 points (1 point for each correct account) Adjusting Entries 17 points (1 point for each correct account; 1 point for each correct amount calculation) Closing Entries 10 points (2 points for each entry; 2 points for correct amounts) Ledger Acct Balances 12 points (1/2 point for each correct balance) Unadjusted Trial Balance 3 points for preparation Adjusted Trial Balance 3 points for preparation Income Statement 10 points Statement of Owner’s Equity 5 points Balance Sheet 10 points Post-Closing Trial Balance 3 points for preparation Neatness and format 7 points Total Possible Points 100 Project Data: Callie Jamison owns and operates a consulting firm called Jamison Consulting. The business began operating in October 2016. Transactions for October and November 2016 have been recorded and posted. Jamison Consulting had the following transactions in December 2016. Dec 2 Provided $3,950 consulting services to Gomez Company on account. 3 Paid $1,025 cash to Hillside Mall for Jamison Consulting’s share of mall advertising costs. 4 Paid $400 cash for minor repairs to the company's computer. 10 Purchased $1,100 of computer supplies on credit from Harris Office Products. 14 Paid cash to employee for six days of work at the rate of $125 per day. 15 Notified by Alex's Engineering Co. that Jamison Consulting’s' bid of $7,000 on a proposed project has been accepted. Alex's paid a $1,500 cash advance to Jamison Consulting. 20 Completed a project for Lyn Corporation and received $5,625 cash. 28 Received $3,000 cash from Gomez Co. on its receivable. 29 Reimbursed C. Jamison $193 for business automobile mileage. 31 C. Jamison withdrew $1,500 cash from the company for personal use. The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company's first three months of operations: a. The December 31 inventory count of computer supplies shows $320 still available. b. Three of the four months' prepaid rent has expired. c. Three months have expired since the 12-month insurance premium was paid in advance. d. As of December 31, the only employee of Jamison Consulting had not been paid for four days of work at $125 per day. e. The computer system, acquired for $8,000 on October 1, is expected to have a four-year life with no salvage value. f. The office equipment, acquired for $20,000 on October 1, is expected to have a five-year life with no salvage value. Required: 1. Journalize the December transactions for Jamison Consulting. You may omit explanations for the journal entries. Skip a line between each journal entry – see the journal entries for October – November as a formatting example. 2. Post the December transactions to the appropriate accounts in the ledger. 3. Prepare a trial balance to prove the equality of debits and credits prior to continuing with this project. Omit any accounts that have a zero balance. Check figure: $99,816. Consult your instructor if your trial balance does not balance before proceeding with the project. 4. Journalize the adjusting entries to reflect items a through f above. 5. Post the adjusting entries to the appropriate accounts in the ledger. 6. Prepare an adjusted trial balance as of December 31, 2016. Check figure: $101,816. Consult your instructor if your adjusted trial balance does not balance before proceeding with the project. 7. Prepare the three basic financial statements in good form. See pages 120-121 of your accounting text for a good example of financial statement formatting. a. Prepare an income statement for the three months ended December 31, 2016. b. Prepare a statement of owner's equity for the three months ended December 31, 2016. c. Prepare a balance sheet as of December 31, 2016. 8. Journalize and post the necessary closing entries for Jamison Consulting. 9. Prepare a post-closing trial balance as of December 31, 2016. Below are the journal entries recorded by Jamison Consulting for October and November 2016. NOTE: These are for your information only; you do not need to do anything with these entries. GENERAL JOURNAL PAGE 1 DATE ACCOUNT POST REF DEBIT CREDIT 2016 Oct 1 Cash 101 45,000 Office Equipment 163 20,000 Computer Equipment 167 8,000 C. Jamison, Capital 301 73,000 1 Prepaid Insurance 128 2,220 Cash 101 2,220 2 Prepaid Rent 131 3,300 Cash 101 3,300 9 Computer Supplies 126 2,545 Accounts Payable 201 2,545 16 Accounts Receivable 106 4,800 Computer Services Revenue 403 4,800 31 Wages Expense 623 875 Cash 101 875 Nov 2 Mileage Expense 676 320 Cash 101 320 5 Accounts Payable 201 2,545 Cash 101 2,545 8 Cash 101 4,800 Accounts Receivable 106 4,800 14 Cash 101 4,633 Computer Services Revenue 403 4,633 23 Accounts Receivable 106 5,208 Computer Services Revenue 5,208 30 C. Jamison, Withdrawals 302 2,000 Cash 101 2,000 Homework Project 1 – Name:_______ ____________ Working Papers General Journal for Requirements 1, 4 & 10 GENERAL JOURNAL PAGE 2 DATE ACCOUNT POST REF DEBIT CREDIT 2016 December Transactions (20 points) Dec 2 Accounts Receivable 106 3,950 Computer Services Revenue 403 3,950 3 Advertising 1,025 Cash 101 1,025 4 Repairs 684 400 Cash 101 400 10 Computer Supplies 126 1,100 Accounts Payable 201 1,100 14 Wages Expense 623 150 Cash 101 150 15 Cash 101 1,500 Computer Services Revenue 403 1,500 20 Cash 101 5,625 Computer Services Revenue 403 5,625 28 Cash 101 3,000 Accounts Receivable 106 3,000 29 Mileage Expense 676 193 Cash 101 193 31 C. Jamison, Withdrawals 302 1,500 Cash 101 1,500 GENERAL JOURNAL PAGE 3 DATE ACCOUNT POST REF DEBIT CREDIT 2016 Adjusting Entries (17 points) Dec 31 shrinkage 3,325 Computer supplies 3,325 31 Rent expense 2,475 Prepaid rent 2,475 Insurance expense 555 Prepaid insurance 555 Wage expense 500 Wages payable 500 Depreciation expense- computer system 500 Acc. Depreciation- computer system 500 Depreciation expense- Office eqp. 1000 Acc. Depreciation Office eqp 1,000 Closing Entries (10 points) Dec 31 shrinkage 3,325 Computer supplies 3,325 31 Rent expense 2,475 Prepaid rent 2,475 Insurance expense 555 Prepaid insurance 555 Wage expense 500 Wages payable 500 Depreciation expense- computer system 500 Acc. Depreciation- computer system 500 Depreciation expense- Office eqp. 1000 Acc. Depreciation Office eqp 1,000 Ledger for Requirements 2, 5, & 10 Note: Ledger includes all entries from the first two months of operations for Jamison Consulting. Continue by posting the December transactions. 12 points Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Oct. 1 J1 45,000 45,000 1 J1 2,220 42,780 2 J1 3,300 39,480 31 J1 875 38,605 Nov. 2 J1 320 38,285 5 J1 2,545 35,740 8 J1 4,800 40,540 14 J1 4,633 45,173 30 J1 2,000 43,173 Dec 3 J1 1,025 42,148 4 J1 400 41,748 14 J1 150 41,598 15 J1 1,500 43,098 20 J1 5,625 48,723 28 J1 3,000 51,723 29 J1 193 51,916 31 J1 1,500 50,416 Accounts Receivable Acct. No. 106 Date Explanation PR Debit Credit Balance Oct. 16 J1 4,800 4,800 Nov. 8 J1 4,800 0 23 J1 5,208 5,208 Dec 2 J1 3,950 9,158 28 J1 3,000 6,158 Computer Supplies Acct. No. 126 Date Explanation PR Debit Credit Balance Oct. 9 J1 2,545 2,545 Dec 10 J1 1,100 3,645 Dec 31 J1 3,325 320 Prepaid Insurance Acct. No. 128 Date Explanation PR Debit Credit Balance Oct. 1 J1 2,220 2,220 Dec 31 J1 555 1,665 Ledger (Continued) Prepaid Rent Acct. No. 131 Date Explanation PR Debit Credit Balance Oct. 2 J1 3,300 3,300 Dec 31 J1 2,475 825 Office Equipment Acct. No. 163 Date Explanation PR Debit Credit Balance Oct. 1 J1 20,000 20,000 Accumulated Depreciation—Office Equipment Acct. No. 164 Date Explanation PR Debit Credit Balance Dec 31 J1 1,000 1,000 Computer Equipment Acct. No. 167 Date Explanation PR Debit Credit Balance Oct. 1 J1 8,000 8,000 Accumulated Depreciation—Computer Equipment Acct. No. 168 Date Explanation PR Debit Credit Balance Dec 31 J1 500 500 Accounts Payable Acct. No. 201 Date Explanation PR Debit Credit Balance Oct. 9 J1 2,545 2,545 Nov. 5 J1 2,545 0 Dec 10 J1 1,100 1,100 Wages Payable Acct. No. 210 Date Explanation PR Debit Credit Balance Dec 31 J1 500 500 Unearned Consulting Revenue Acct. No. 236 Date Explanation PR Debit Credit Balance Dec 15 J1 1,500 1,500 Ledger (Continued) C. Jamison, Capital Acct. No. 301 Date Explanation PR Debit Credit Balance Oct. 1 J1 73,000 73,000 C. Jamison, Withdrawals Acct. No. 302 Date Explanation PR Debit Credit Balance Nov. 30 J1 2,000 2,000 Dec 31 J1 1,500 3,500 Consulting Revenue Acct. No. 403 Date Explanation PR Debit Credit Balance Oct. 16 J1 4,800 4,800 Nov. 14 J1 4,633 9,433 23 J1 5,208 14,641 Dec 2 J1 3,950 18,591 15 J1 1,500 20,091 20 J1 5,625 25,716 Depreciation Expense—Office Equipment Acct. No. 612 Date Explanation PR Debit Credit Balance Dec 31 J1 1,000 1,000 Depreciation Expense—Computer Equipment Acct. No. 613 Date Explanation PR Debit Credit Balance Dec 31 J1 500 500 Wages Expense Acct. No. 623 Date Explanation PR Debit Credit Balance Oct. 31 J1 875 875 Dec 14 J1 150 1,025 Ledger (Continued) Insurance Expense Acct. No. 637 Date Explanation PR Debit Credit Balance Dec 31 J1 555 555 Rent Expense Acct. No. 640 Date Explanation PR Debit Credit Balance Dec 31 J1 2,475 2,475 Computer Supplies Expense Acct. No. 652 Date Explanation PR Debit Credit Balance Dec 10 J1 1,100 1,100 J1 Advertising Expense Acct. No. 655 Date Explanation PR Debit Credit Balance Dec 3 J1 1,025 1,025 Mileage Expense Acct. No. 676 Date Explanation PR Debit Credit Balance Nov. 2 J1 320 320 Dec 29 J1 193 516 Repairs Expense—Computer Acct. No. 684 Date Explanation PR Debit Credit Balance Dec 4 J1 400 400 Income Summary Acct. No. 901 Date Explanation PR Debit Credit Balance Dec 2 J1 3,950 3,950 15 J1 1,500 5,450 20 J1 5,625 11,075 Working Paper for Requirement 3 3 points Jamison Consulting Trial Balance December 31, 2016 DEBIT CREDIT Cash 50,416 Accounts receivable 6,158 Repairs expense 400 Mileage expense 516 Advertising expense 1,025 Computer supplies expense 1,100 Wages expense 875 Consulting Revenue 25,716 C. Jamison, Withdrawals 3,500 C. Jamison, Capital 73,000 Unearned Consulting Revenue 1,500 Accounts Payable 1,100 Computer Equipment 8,000 Office Equipment 20,000 Prepaid Rent 825 Prepaid Insurance 1,665 Computer Supplies 3,325 99,305 99,816 Working Paper for Requirement 6 3 points Jamison Consulting Adjusted Trial Balance December 31, 2016 DEBIT CREDIT Cash 50,416 Accounts receivable 6,158 Repairs expense 400 Mileage expense 516 Advertising expense 1,025 Computer supplies expense 1,100 Rent expense 2,475 Insurance expense 555 Wages expense 1,025 Depreciation Expense—Computer Equipment 500 Depreciation Expense—Office Equipment 1,000 Consulting Revenue 25,716 C. Jamison, Withdrawals 3,500 C. Jamison, Capital 73,000 Unearned Consulting Revenue 1,500 Wages Payable 500 Accounts Payable 1,100 Accumulated Depreciation—Computer Equipment 500 Computer Equipment 8,000 Accumulated Depreciation—Office Equipment 1,000 Office Equipment 20,000 Prepaid Rent 825 Prepaid Insurance 1,665 Computer Supplies 3,325 101,816 101,816 Working Papers for Requirements 7, 8 & 9 Jamison Consulting Income Statement (10 points) For Three Months Ended December 31, 2016 revenue 25,716 Repairs expense 400 Mileage expense 516 Advertising expense 1,025 Computer supplies expense 1,100 Rent expense 2,475 Insurance expense 555 Wages expense 1,025 Depreciation Expense—Computer Equipment 500 Depreciation Expense—Office Equipment 1,000 (8,596) Net profit 17,120 Jamison Consulting Statement of Owner's Equity (5 points) For Three Months Ended December 31, 2016 Capital 73,000 Net profit 17,120 Withdrawals (3,500) 13,620 59,380 Working Papers for Requirements 6, 7 & 8 (continued) Jamison Consulting Balance Sheet (10 points) December 31, 2016 Current assets Cash 50,416 Accounts receivable 6,158 Prepaid Rent 825 Prepaid Insurance 1,665 Computer Supplies 320 Computer Equipment 8,000 Acc. Depreciation Expense—Computer Equipment (500) Office Equipment 20,000 Accumulated Depreciation—Office Equipment (1,000) C. Jamison, Capital 73,000 Wages Payable 500 Accounts Payable 1,100 C. Jamison, Withdrawals 3,500 Unearned Consulting Revenue 1,500 Income summary 11,075 88,889 90,675 Working Papers for Requirement 10 Jamison Consulting Post-Closing Trial Balance December 31, 2016 DEBIT CREDIT Cash 50,416 Accounts receivable 6,158 Repairs expense 400 Mileage expense 516 Advertising expense 1,025 Computer supplies expense 1,100 Rent expense 2,475 Insurance expense 555 Wages expense 1,025 Depreciation Expense—Computer Equipment 500 Depreciation Expense—Office Equipment 1,000 Consulting Revenue 25,716 C. Jamison, Withdrawals 3,500 C. Jamison, Capital 73,000 Unearned Consulting Revenue 1,500 Wages Payable 500 Accounts Payable 1,100 Accumulated Depreciation—Computer Equipment 500 Computer Equipment 8,000 Accumulated Depreciation—Office Equipment 1,000 Office Equipment 20,000 Prepaid Rent 825 Prepaid Insurance 1,665 Computer Supplies 3,325 101,816 101,816 [Show Less]