24 Jan In previous modules, you examined the initial stages of the accounting cycle and practiced journalizing financial transactions. In Milestone One, you will complete the first part of your
3-In previous modules, you examined the initial stages of the accounting cycle and practiced journalizing financial transactions. In Milestone One, you will complete the first part of your course project to demonstrate your ability to accurately record financial data, which will continue to be used to complete other parts of the project.
Scenario
You were recently hired as an entry-level bookkeeper for a service business that recently opened. This is the first month in operation for the business and your first task is to record business transactions for their first month using the source documents and transaction data the owner will provide to you. Because this is a small business that does not use computerized accounting, you will apply the accounting cycle in Excel to record transactions and generate financial reporting results for the owner.
Prompt
Record Financial Data: Use accepted accounting principles to accurately capture business transactions for the month in the Company Accounting Workbook Template using the data provided in the Accounting Data Appendix document.
Specifically, you must address the following rubric criteria:
- Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information.
- Completeness: Prepare entries that are complete for each month, including transferring posted entries to T accounts.
- Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the “Trial Balance” tab of the company accounting workbook, ensuring that the total debits and credits match.
Guidelines for Submission
Using the provided template, submit your company accounting workbook with the following portions completed: the General Journal tab, the Ledger Accounts tab, and the Trial Balance tab. This should be completed and submitted using the Microsoft Excel workbook template. Please note that the first tab of the workbook provides you with the chart of accounts. These are the accounts you will use in recording transactions for the month.
ACC 201 Accounting Data Appendix
The following events occurred in March:
· March 1: Owner borrowed $125,000 to fund/start the business. The loan term is 5 years.
· March 1: Owner paid $250 to the county for a business license.
· March 2: Owner signed lease on office space; paying first (March 20XX) and last month’s rent of $950 per month.
· March 5: Owner contributed office furniture valued at $2,750 and cash in the amount of $15,000 to the business.
· March 6: Owner performed service for client in the amount of $650. Customer paid in cash.
· March 8: Owner purchased advertising services on account in the amount of $500.
· March 10: Owner provided services to client on account, in the amount of $1,725.
· March 15: Owner paid business insurance in the amount of $750.
· March 20: The owner received first utility bill in the amount of $135, due in April.
· March 20: Office copier required maintenance; owner paid $95.00 for copier servicing.
· March 22: Owner withdrew $500 cash for personal use.
· March 25: Owner paid $215 for office supplies.
· March 25: Owner provided service to client in the amount of $350. Client paid at time of service.
· March 30: Owner paid balance due for advertising expense purchase on March 8.
· March 30: Received payment from customer for March 10 invoice in the amount of $1,725.
· March 31: Last day of pay period; owner owes part-time worker $275 for the March 16 through March 31 pay period. This will be paid on April 5.
· March 31: Provided service for client on account in the amount of $3,500.
· March 31: Record depreciation of the office furniture at $45.83.
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Chart of Accounts
| This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. | |||||
| Asset Accounts | Liability Accounts | Equity Accounts | |||
| Acct # | Acct # | Acct # | |||
| Cash | 101 | Notes Payable | 201 | Owner's Capital | 301 |
| Accounts Receivable | 102 | Accounts Payable | 202 | Owner Draws | 302 |
| Prepaid Rent | 103 | Wages Payable | 203 | ||
| Office Furniture | 104 | ||||
| Office Supplies | 105 | ||||
| Accumulated Depreciation (contra asset) | 106 | ||||
| Revenue Accounts | |||||
| Acct # | |||||
| Service Revenue | 401 | ||||
| Expense Accounts | |||||
| Acct # | |||||
| Rent expense | 501 | ||||
| Business License Expense | 502 | ||||
| Insurance Expense | 503 | ||||
| Repairs and Maintenance | 504 | ||||
| Advertising Expense | 506 | ||||
| Wages Expense | 507 | ||||
| Utilities Expense | 508 | ||||
| Depreciation Expense | 509 | ||||
| Cash | |||||
| Baking Supplies | |||||
| Prepaid Rent | |||||
| Prepaid Insurance | |||||
| Baking Equipment | |||||
| Office Supplies | |||||
| Accounts Receivable | |||||
| Accumulated Depreciation | |||||
| Merchandise Inventory | |||||
| Notes Payable | |||||
| Accounts Payable | |||||
| Wages Payable | |||||
| Interest Payable | |||||
| Common Stock | |||||
| Dividends | |||||
| Bakery Sales | |||||
| Merchandise Sales | |||||
| Baking Supplies Expense | |||||
| Rent Expense | |||||
| Insurance Expense | |||||
| Misc. Expense | |||||
| Business License Expense | |||||
| Advertising Expense | |||||
| Wages Expense | |||||
| Telephone Expense | |||||
| Interest Expense | |||||
| Depreciation Expense | |||||
| Office Supplies Expense | |||||
| Cost of Goods Sold |
General Journal
| A Company | |||||
| General Journal Entries | Journal Entry Tips | ||||
| The debited account is recorded first, credited account recorded second. | |||||
| Debits and credits must always equal! | |||||
| Date | Accounts | Debit | Credit | There can be compound entries in which two accounts receive a debt to an equivalent credited amount to one account. | |
| Be sure to use your chart of accounts (the first page of this workbook). | |||||
| Each account you will record to is already listed and organized by classification of the account. | |||||
| Total | – 0 | – 0 | If Red, this means your debits and credits do not equal. Be sure to review for errors. |
Ledger Accounts
| Assets | Liabilities | Equity | Revenue | Expenses | ||||||||||||||||||
| Cash | Notes Payable | Owner's Capital | Service Revenue | Rent Expense | ||||||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | |||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | ||||||||||||||||||
| Accounts Rec. | Accounts Payable | Owner Draws | Business License Expense | |||||||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | $ – 0 | |||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | |||||||||||||||||||
| Prepaid Rent | Wages Payable | Insurance Expense | ||||||||||||||||||||
| Posting to the ledger/t accounts | ||||||||||||||||||||||
| Don't overthink it! | ||||||||||||||||||||||
| You are just posting each debit and credit from the journal entries to the account you identified in the entry. | ||||||||||||||||||||||
| These accounts are set to calculate your balances for you. | ||||||||||||||||||||||
| Please be careful not to delete the running totals as those will calculate the ending balance. | ||||||||||||||||||||||
| The ending balance will transfer to the Trial Balance sheet. | ||||||||||||||||||||||
| If you have posted all entries and your trial balance is not in balance (total debits = total credits), | ||||||||||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | this means that there is an error. | $ – 0 | $ – 0 | ||||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | ||||||||||||||||||||
| Office Furniture | Repairs & Maint. | |||||||||||||||||||||
| $ – 0 | $ – 0 | $ – 0 | $ – 0 | |||||||||||||||||||
| $ – 0 | $ – 0 | |||||||||||||||||||||
| Office Supplies | Advertising Expense | |||||||||||||||||||||