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Mini Practice Set

Rich's Accounting Service

This comprehensive review problem requires you to complete the accounting cycle for Rich's Accounting Servicetwice. This practice set allows you to review Chapters 1 - 6 while reinforcing the relationships between all parts of the accounting cycle. By completingtwo cycles, you will see how the ending June balances in the ledger are used toaccumulate data in July.

Rich's Accounting ServiceChart of Accounts

ASSETSOWNER'S EQUITY

EXPENSES - Continued

111Cash

311 Rich, Capital

513 Gasoline Expense

112 Accounts Receivable

312 Rich, Drawing

514 Repairs Expense

114 Prepaid Rent

313 Income Summary

515 Telephone Expense

115 Office Supplies

516 Advertising Expense

121 Office Equipment

517 Office Supplies Expense

122Accumulated Depreciation -Office Equipment

REVENUE

518Depreciation Expense -Office Equipment

123 Automobile

519 Depreciation Expense -Automobile

124 Accumulated Depreciation -Automobile

411 Accounting Service Fees

524 Miscellaneous Expense

LIABILITIES

EXPENSES

211 Accounts Payable

511 Rent Expense

212 Salaries Payable512 Salaries Expense

On June 1, 201X,Rich opened an accountingservices office calledRich's Accounting Service. The following transactions were completed for the month of June.

June 1

Richinvested $19,000 cash in the business along with $6,000 of office equipment.

June 1

Rented an office and paid three months rent in advance to Fredericks Property Management. Check #0001 - $4,500.

June 1

Bought an automobile on account from Norm's Automotive, $27,000.

June 4

Purchased office supplies from Office Depot on account, $400.

June 5

Purchased additional office supplies from Office Depot. Paid cash, Check # 0002 - $75.

June 6

Performed accounting services for Jilian Kirby. Collected $3,500 cash.

June 8

Paid a gasoline bill to Arco. Check #0003 - $97.

June 12

Paid Janice, office secretary, two weeks salary.Check #0004 - $2,000.

June 18

Provided accounting services to Mindy's Dress Shop, $8,500. Payment to be received on July 9th.

June20

Rich withdrew $2,500 from the business to pay personal expenses. Check #0005 - $2,500.

June 21

Performed accounting services for Caden, Inc.. Collected $2,500 cash.

June 22

Paid a gasoline bill to Arco. Check #0006 - $96.

June 25

Paid Norm's Automotive for automobile repairs. Check #0007 - $625

June 26

Paid Janice, office secretary, two weeks salary.Check #0008 - $2,000.

June 27

Provided accounting services to Sarah Company $7,500. Payment to be received on July 19th.

June 29

Paid June telephone bill to Verizon. Check #0009 - $525.

June 29

Received bill from The Daily Courier for June advertising. Bill is in the amount of $1,300 and is due July 3rd.

REQUIRED WORK FOR JUNE

1.

Journalize transactions and post to General Ledger.

2.

Prepare a trial balance in the first two columns of a blank worksheet form. Complete the worksheet based on the following adjustment data:

a.One month's rent, $1,500, has expired.

b.An inventory of office supplies shows there is $75 remaining on hand.

c.Depreciation on the office equipment is $200.

d.Depreciation on the automobile is $750.

e.Janice has worked Monday, June 29th and Tuesday, June 30th, but is not scheduled to be paid until Friday,July 10th. Her salary is$2,000 every two weeks ($200 per day).

3.

Prepare June financial statements. An Income Statement, Statement of Owner's Equity and Balance Sheet.

4.

Journalize the adjusting entries and post them to the General Ledger.

5.

Journalize the necessary closing entries and post them to the General Ledger.

6.

Prepare a post-closing trial balance.

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During July, Rich's Accounting Service completed these transactions:

July 1 Reverse theJune 30th adjusting journal entry for Janice's pay.

July 2 Purchased additional supplies on account from Office Depot, $825.

July 3 Paid The Daily Courier bill from June. Check #0010, $1,300.

July 5 Performed accounting services. Collected cash fee, $3,500.

July 5 Paid a gasoline bill to Arco. Check #0011 - $94.

July 6 Made a car payment to Norm's Automotive. Check #0012, $450.

July 9 Collected payment due from Mindy's Dress Shop, $8,500.

July 9 Paid $500 to ASCPA, for income tax update . Check #0013 (Miscellaneous Expense).

July 10 Paid Janice, office secretary, two weeks salary.Check #0014 - $2,000.

July 12 Paid June 4th bill to Office Depot. Check #0015, $400.

July 17 Provided tax planning for a new client. Billed $1,200, due in August.

July 18 Performed accounting services for Dylan Bruno. Collected cash fee, $3,500.

July 19 Rich withdrew $1,800 from the business to pay personal expenses. Check #0016 - $1,800.

July 20 Sent check #0017 to Catholic Charities, $40. (Miscellaneous Expense)

July 23 Paid a gasoline bill to Arco. Check #0018 - $98

July 24 Paid Norm's Automotivefor automobile repairs. Check #0019 - $700

July 25 Paid Janice, office secretary, two weeks salary.Check #0020 - $2,000.

July 26 Performed accounting services, on account for Ida SarahBusiness Consulting.$7,850, due in 30 days.

July 31 Paid July telephone bill to Verizon. Check #0021 - $535.

July 31 Received bill from The Daily Courier for Julyadvertising. Bill is in the amount of $1,500 and is due August 4th.

July 31 Rich withdrew $17,500 from the business. Check #0022 - $17,500.

REQUIRED WORK FOR JULY

1.Journalize transactions and post to General Ledger.

2.Prepare a trial balance in the first two columns of a blank worksheet form. Complete the worksheet based on the following adjustment data:

a.One month's rent, $1,500, has expired.

b. An inventory of office supplies shows there is $80 remaining on hand.

c.Depreciation on the office equipment is $200.

d. Depreciation on the automobile is $750.

e. Janice has worked five days after her last pay check. She is owed $1,000for July 27th through July 31st.

3.Prepare July financial statements. An Income Statement, Statement of Owner's Equity and Balance Sheet.

4.Journalize the adjusting entries and post them to the General Ledger.

5.Journalize the necessary closing entries and post them to the General Ledger.

6.Prepare a post-closing trial balance.