comprehensive accounting cycle review problem

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e sure and put your name on the assignment and keep a copname on the assignment and keep a copyy

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• 2& points are awarded "or submitting your assignment via your ePort"olio according to these 2& points are awarded "or submitting your assignment via your ePort"olio according to these instructionsinstructions Note: This is the project that

Note: This is the project that lets you know if your level of understanding is where lets you know if your level of understanding is where it needs to be to be it needs to be to be successful in thissuccessful in this

course. If you are having great difficulty in

course. If you are having great difficulty in completing this then you need to review the content of completing this then you need to review the content of chapters !" to continuechapters !" to continue

on and have a successful e#perience. $lease give it your

on and have a successful e#perience. $lease give it your best shot%best shot% A solut

A solution to this problem ion to this problem is not available "or is not available "or your re"erence, by design /t your re"erence, by design /t is time "or you tis time "or you to complete a problem oo complete a problem on your own Then your own The "ollowing check "igures are provided#

"ollowing check "igures are provided# +

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Comprehensive Accounting Cycle Review

Comprehensive Accounting Cycle Review Problem

Problem

:n !ecember $

:n !ecember $stst_{Curt ;illiamson began an}_{Curt ;illiamson began an}_{auto repair shop,}_{auto repair shop,}_{;illiamsons <uality A}_{;illiamsons <uality A}_{utomotive The "ollowing in"ormation about}_{utomotive The "ollowing in"ormation about}

!ecember=s transactions, accounts, and ad4ustment data

!ecember=s transactions, accounts, and ad4ustment data is availableis available

Transactions Transactions

!ec $

!ec $;illiamson contributed 5'&,&&& cash;illiamson contributed 5'&,&&& cash to theto thebusinessbusiness in e3change "orin e3change "orcapitalcapital $

$ PurchasedPurchased 5$&5$&,,>&& o" e?uipment>&& o" e?uipment payingpaying cashcash $

$ PaidPaid 59,'&&59,'&&"or"or a 6.montha 6.monthinsurance policyinsurance policy starting onstarting on !ecember!ecember $$ 6

6 PaidPaid 5$>,&&& cash5$>,&&& cash totopurchasepurchase land toland to bebeusedused ininoperationoperationss $& Purchased

$& Purchased o""ice supplieso""ice supplies ononaccountaccount,, 5858,,&&&&&& $6 orrowed

$6 orrowed 52>52>,,&&&&&& "rom the bank "or business use "rom the bank "or business use ;illiamson signed a;illiamson signed a note payable to thenote payable to thebankbankin the namein the name o"o"

the

thebusinessbusiness

22 Paid

22 Paid 5>&&5>&& "or"oradvertisingadvertising e3pensese3penses 2)

2) PaidPaid 5$5$,,&&&&&& ononaccountaccount 2>

2> The business receivedThe business received aabill "or utilities to be paid bill "or utilities to be paid in %anuarin %anuary,y, 52>&52>& 8$

8$ RevenuesRevenues earned duringearned duringthe month includedthe month included 5$75$7,,'&&'&& cashcash andand 5252,,7&& on7&& on accountaccount 8$

8$ PaidPaid employees@ salaries 58,)&& andemployees@ salaries 58,)&& and building rentbuilding rent 57&&57&&RecordRecordas a compoundas a compound entryentry 8$

8$ The business receivedThe business received 5$5$,,99& "or99& "orauto screening servicesauto screening services to be per"ormed ne3tto be per"ormed ne3t montmonthh 8$ ;illiamson

8$ ;illiamson withdrew cash o"withdrew cash o" 5858,,&&&&&&

Accounts Accounts

Cash

Cash Accounts AccountsReceivableReceivableAA:""ice:""iceSupplieSuppliessAAPrepaidPrepaid/nsuranc/nsuranceeAAB?uipmentB?uipmentAA Accumulated Accumulated

!epreciation.B?uipment

!epreciation.B?uipmentAA1and1and Accounts AccountsPayablePayableAA+tilities Payable+tilities Payable /nterest Payable +nearned/nterest Payable +nearned RevenueRevenueNotes PayableNotes Payable

;illiamson,

;illiamson, CapitalCapital ;illiamson;illiamson,, ;ithdrawals;ithdrawalsService RevenueService Revenue Salaries B3penseSalaries B3pense RentRentBB33pensepense +tilities B+tilities B33pensepense

Advertising

Advertising B3pensB3penseeAASupplies BSupplies B33pensepense /nsurance B/nsurance B33pensepense /nterest B3pense/nterest B3penseandand !epreciation!epreciationB3pense.B?uipmentB3pense.B?uipment

Ad4ustment !ata

a :""ice

a :""ice SuppliesSuppliesused during the monthused during the month,,$600.$600.

b.

b. !epreciation "or the month!epreciation "or the month,, $180.$180.

c

c.. _{:ne month insurance has}_{:ne month insurance has} _e3pired_e3pired

d.

d. Accrued Accrued /nterest B3pense/nterest B3pense,, $75$75..

&e'uirements:

Complete the following on the

Complete the following on the attached work papersattached work papers

$

$ Prepare Prepare the the 4ournal4ournalentriesentriesand post to theand post to the T.accountT.accountss 2.

2. Prepare an unad4usted trialPrepare an unad4usted trialbalancebalance 3

3.. _{Prepare the}_{Prepare the}_{ad4usting entries and post}_{ad4usting entries and post} _{to the}_{to the}_T.account_T.account_s_s__

4

(4)

(5)

GE

GENE

NERA

RAL

L JO

JOUR

URNA

NAL

L

D

DAATTEE AACCCCOOUUNNT T TTIITTLLEES S AANND D EEXXPPLLAANNAATTIIOONN DEDEBBIITT CCRREEDDIITT 12/1

12/1 CashCash 5000050000

W

Wiilllliiaammssoonn,, ccaappiittaall 5500000000

Owner contribution for capital Owner contribution for capital 1

122//11 EEqquuiippmmeenntt 1100880000

C

Caasshh 1100880000

Pai cash for equipment Pai cash for equipment 1

122//11 PPrreeppaaii iinnssuurraannccee !!550000 C

Caasshh !!550000

Pai for " months insurance Pai for " months insurance 1

122//"" ##aann 1188000000

C

Caasshh 1188000000

Pai cash for lan Pai cash for lan 1

122//1100 OO$$ccee susupppplliieess %%000000

&

&ccccoouunnttss ppaa''aabbllee %%000000

O$ce supplies pai on

O$ce supplies pai on accountaccount 1

122//11"" CCaasshh 2288000000

(

(ootteess PPaa''aabbllee 2288000000

#oan from a ban) for business use #oan from a ban) for business use 1

122//2222 &&**eerrttiissiinn+ + eeppeennssee 880000 C

Caasshh 880000

Pai cash for a*ertisin+ Pai cash for a*ertisin+ 1

122//22-- &&ccccoouunnttss ppaa''aabbllee 11000000 C

Caasshh 11000000

Pa'in+ cash on account Pa'in+ cash on account 1

122//%%11 CCaasshh 11..550000

&

&ccccoouunnttss rreecceeii**aabbllee 22..0000 

eerr**iiccee rree**eennuueess 2200220000

ecor ser*ice re*enues for ecember ecor ser*ice re*enues for ecember

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(7)

GENERAL JOURNAL GENERAL JOURNAL D

DAATTEE AACCCCOOUUNNT T TTIITTLLEES S AANND D EEXXPPLLAANNAATTIIOONN DEDEBBIITT CCRREEDDIITT 1

122//%%11 aallaarriieesseeppeennssee %%--0000 

eenntt eeppeennssee ..0000

C

Caasshh !!%%0000



o recoro recor epenses epenses 1

122//%%11 CCaasshh 11!!!!00

3

3nneeaarrnnee rree**eennuuee 11!!!!00



o recoro recor cash r cash recei*e for ser*icecei*e for ser*ices net montes net monthh 1

122//%%11 WWiilllliiaammssoonn, , wwiitthhrraawwaallss %%000000 C

Caasshh %%000000



o recoro recorer owners wer owners withrawalsithrawals 1

122//%%11 uupppplliieess eeppeennssee --0000 O

O$$ccee ssuupppplliieess --0000



o recoro recor o$ce suppl o$ce supplies useies use 1

1%%//%%11 eepprreecciiaattiioon n eeppeennsse e eqequuiippmmeenntt 118800 &

&ccccuummuullaattee  eepprreecciiaattiioon n eeqquuiippmmeenntt 118800 

o recoro recor eprecia epreciation on equiption on equipmentment 1

122//%%11 44nnssuurraanncceeeeppeennssee 550000 P

Prreeppaaii iinnssuurraannccee 550000



o recoro recor insurance  insurance epenseepense 1

122//%%11 44nntteerreesstt eeppeennssee ..55

44nntteerreesstt ppaa''aabbllee ..55



o accrue intero accrue interest epensest epensee 1

122//%%11 eerr**iiccee rree**eennuuee 2200220000

44nnccoommee ssttaatteemmeenntt 2200220000



o close ser*io close ser*ice re*enuece re*enue 1

122//%%11 44nnccoommee susummmmaarr'' --!!5555 

aallaarriieesseeppeennssee %%--0000

rreenntt ..0000

&

&**eerrttiissiinn++ 880000

s

suupppplliieess --0000

iinnssuurraannccee 550000

iinntteerreesstt ..55



(8)

(9)

GENERAL LEDGER GENERAL LEDGER

C

Caasshh AAccccttss. . RReecc OOffffiicce e SuSupppplliieess PPeeppaaiid d !!""ssuuaa""ccee

50 5000000 0 1010808000 2 288000000 !!550000 22..0000 %0%00000 --0000 !!550000 550000 1. 1.50500 0 1818000000 1 1!!!!0 0 880000 1000 1000 !%00 !%00 %000 %000 #

#$$uuiipp%%ee""tt AAccccuu%%. . &&eeppeecc. . ' ' ##$$uuiipp.. (aa"( "dd AAcccc))uu""tts s PPaa**aabbllee 1

100880000 1188000000 11000000 %%000000

180 180

+

+ttiilliittiiees s PPaa**aabbllee !!""tteeeesst t PPaa**aabbllee ++""eeaa""eed d RRee,,ee""uue e --))ttees s PPaa**aabbllee//iilllliiaa%%ss))""

.

.55 11!!!!00 2288000000

C

Caappiittaall//iilllliiaa%%ss))"" //iitthhddaa00aallss SSee,,iicce e RRee,,ee""uuee SSaallaaiiees s ##11ppee""ssee

%

%000000 5500000000 %%000000 %%000000 220022000 20 200220000 %%--0000 %%--0000 1%.!5

(10)

(11)

R

Ree""t t ##11ppee""ssee +ttiilliittiiees + s ##11ppee""ssee AAdd,,eettiissii""  ##11ppee""ssee SSuupppplliiees s ##11ppee""ssee

.

.0000 ..0000 880000 880000 --0000 --0000

!!""ssuuaa""cce e ##11ppee""ssee !!""tteeeesst t ##11ppee""ssee &&eeppeecciiaattii))" " ##11pp. . ##$$uuiipp.. !!""cc))%%e e SSuu%%%%aa**

5

50000 550000 ..55 ..55 118800 118800 --!!5555 2200220000 1%.!5

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(13)

Cancel Anytime.

Unadjusted Trial Balance Unadjusted Trial Balance

D

Deebbiittss CCrreeddiittss C

Caasshh 55!!55!!00

&

&ccccoouunnttss eecceeii**aabbllee 22..0000 O

O$$ccee ssuupppplliieess %%000000

P

Prreeppaaii iinnssuurraannccee !!550000

E Eqquuiippmmeenntt 1100880000 # #aann 1188000000 & &ccccoouunnttss ppaa''aabbllee 22000000 3

(

(ootteessPPaa''aabbllee  WWiilllliiaammssoonn 2288000000 C

Caappiittaall  WWiilllliiaammssoonn 5500000000

Withrawals

Withrawals 6 6 Williamson Williamson %000%000



eerr**iicceeee**eennuuee 2200220000





eenntt EEppeennssee ..0000

&

&**eerrttiissiinn++ eeppeennssee 880000 

(14)

Cancel Anytime.

Adjusted Trial Balance Adjusted Trial Balance

D

Caasshh 55!!55!!00

&

&ccccoouunnttss rreecceeii**aabbllee 22..0000 O

O$$ccee ssuupppplliieess 22!!0000

P

E

Eqquuiippmmeenntt 1100880000

&

&ccccuummuullaattee  eepprreecciiaattiioon n eeqquuiippmmeenntt 118800 #

#aann 1188000000

&

&ccccoouunnttss ppaa''aabbllee 22000000

3

3nneeaarrnnee rree**eennuueess 11!!!!00

(

(ootteessppaa''aabbllee WiilllliiaW ammssoonn 2288000000 C

Caappiittaall WWiilllliiaammssoonn 5500000000

W

Wiitthhrraawwaallss WWiilllliiaammssoonn %%000000 

eerr**iicceeee**eennuueess 2200220000





eenntt eeppeennssee ..0000

&

&**eerrttiissiinn++ eeppeennssee 880000 

uupppplliieess eeppeennssee --0000

44nnssuurraannccee eeppeennssee 550000

44nntteerreesstt eeppeennssee ..55



eepprreecciiaattiioon n eeppeennsse e eeqquuiippmmeenntt 118800

(15)

Cancel Anytime. Inc!e State!ent Inc!e State!ent e*enues e*enues 

eerr**iiccee rree**eennuueess 2200220000

Epenses Epenses 

aallaarriieess %%--0000



eenntt ..0000

&

&**eerrttiissiinn++ 880000

s

suupppplliieess --0000

44nnssuurraannccee 550000

44nntteerreesstt ..55



eepprreecciiaattiioonn 118800



otal epensotal epenseses -!55-!55

(

(eett iinnccoommee 11%%..!!55

State!ent " C#an$es in O%ner&s E'uit( State!ent " C#an$es in O%ner&s E'uit(

W

Wiilllliiaammssoon n ccaappiittaal l eec c 1 1 22001155 00 O

Owwnneerr ccoonnttrriibbuuttiioonnss 5500000000

(

(16)

Cancel Anytime.

Balance S#eet Balance S#eet

&

&sssseettss ##iiaabbiilliittiieess C

Caasshh 55!!55!!00 &&ccccoouunntts s ppaa''aabbllee 22000000 &

&ccccoouunntts s rreecceeii**aabbllee 22..0000 44nntteerreesst t papa''aabbllee ..55 O

O$$cce e ssuupppplliieess 22!!0000 33nneeaarrnnee  rree**eennuuee 11!!!!00 P

Prreeppaaii  iinnssuurraannccee !!000000 ((oottees s ppaa''aabblle e wwiilllliiaammssoonn 2288000000 E

Eqquuiippmmeenntt 1100880000 &cc

&ccumulumulate ate eprepreciateciation ion equiequipmentpment 71807180

#an 18000

Owner9s Equit' Owner9s Equit' W

Wiilllliiaammssoon n ccaappiittaall --00..!!55 

(17)

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Pst)Clsin$ Trial Balance Pst)Clsin$ Trial Balance

D

Caasshh 55!!55!!00

&

&ccccoouunnttss rreecciiee**aabbllee 22..0000 O

O$$ccee ssuupppplliieess 22!!0000

P

E

Eqquuiippmmeenntt 1100880000

&

&ccccuummuullaattee  eepprreecciiaattiioon n eeqquuiippmmeenntt 118800 #

#aann 1188000000

&

&ccccoouunnttss ppaa''aabbllee 22000000

3

(

(ootteessppaa''aabbllee WiilllliiaW ammssoonn 2288000000 W

Wiilllliiaammssoonn ccaappiittaall --00..!!55

