Accounting 203 Class Exercises Chapter 3

Part I - Transactions and Adjusting Journal Entries

John and Lou Topp are brothers. In April 2020, they decided to form a Corporation, Top Dog, Inc. selling hot dogs.

Required Use the separate Excel worksheet template in Blackboard to complete the below:

1. Record (Journalize write-up) the 11 May transactions and then the 6 May adjusting journal entries for Top Dog, Inc. in the Excel Workbook provided - in the corresponding Tabs 1 and 2.
2. Post the May transactions to the General Ledger (GL) T Accounts and calculate each account balance in the Excel Workbook Tab 3
3. Transfer each account balance from the T Accounts to the Unadjusted Trial Balance Columns in the Worksheet in Tab 4.
4. Post the May adjusting entries to the Worksheet in the Adjusting Entries Columns of the worksheet in Tab 4
5. Calculate and extend the amounts to create the final adjusted trial balance worksheet at May 31, 2020 in columns in Tab 4
6. Extend the amounts from the adjusted trial balance worksheet columns to create the worksheet version of the income statement and balance sheet to ensure you are in balance. Now you should be ready to prepare your formal a) income statement, b) statement of retained earnings and c) balance sheet as of and for the month ended May 31, 2020 in Tabs 5,6 and 7

The Company is on a perpetual inventory system. (In a perpetual inventory system cost of goods sold and inventory amounts are adjusted for each sale vs a periodic system where inventory and cost of goods sold amounts are adjusted at the end of the year.) Write N/A" if no entry is required.

The general ledger accounts used by Top Dog, Inc. are as follows note each account type:

	Equipment (A)		Rent Expense (E)		Prepaid Insurance (A)
	Supplies Expense (E)		Accounts Payable (L)
	Sales (R)		Unearned (Deferred) Revenue (L)		Accumulated Depreciation Equipment (CA)
	Cash (A)		Cost of Goods Sold (E)		Salaries and Wages Payable (L)
	Insurance Expense (E) Accrued Expenses Payable (L)		Salaries and Wages Expense(E) Depreciation Expense (E)		Bank Charges(E)
	Inventory (A)		Supplies (on Hand) (A)		Common Stock (EQ) Retained Earnings (EQ)

Account types:

A Asset R Revenue (Income)

L Liabilities E - Expense

EQ Equity CA Contra-Asset = Accumulated Depreciation

1. May Cash Transactions to be Journalized - Debits and Credits (Excel - Tab 1)

1-May 1, 2020 John and Lou Topp invested $50,000 in the hot dog vending cart business by purchasing 5,000 shares of the common stock ($10 par value) of Top Dog, Inc.

2- May 1, 2020 Top Dog, Inc. purchased a one year insurance policy in the amount of $4,800 beginning May 1, 2016 and expiring on April 30, 2021.

3-May 7, 2020- Top Dog, Inc. purchased a hot dog stand for $24,000 for cash.

4-May 8, 2020 - Top Dog, Inc. purchased 1,000 hot dogs for $2.00 each and 1,000 buns for $1.00 each on account from Nathans Inc.

5-May 8, 2020 Top Dog, Inc. purchased supplies and condiments from Nathans Inc. for $1,000 cash.

6-May 9, 2020 Top Dog, Inc. hired two college students to work at the hot-stand for $500 per week beginning on Monday, May 15.

7-May 15, 2020 Top Dog, Inc. sells 900 hot dogs (and buns) for $5 each at a special event.

8-May 27, 2020 Top Dog, Inc. pays their 2 employees in the amount of $2,000 for the prior two weeks of work. (ignore any payroll taxes).

9-May 31, 2020 Top Dog, Inc. pays Nathans Inc. in full for the inventory purchased on May 8, 2020.

10-May 31, 2020 Bank charges amounted to $30 for the month of May.

11-May 31, 2020 A corporate customer paid Top Dog, Inc. a $3,000 deposit in advance for 1,000 hot dogs and buns to be available and delivered next week to a corporate sales event that will take place in June.

2. Month- End Adjustments May Debits and Credits (Excel Tab 2)

12- May 31, 2020 Top Dog, Inc. depreciates the hot dog cart on a straight-line basis over 5 years.

13-May 31, 2020 Top Dog Inc. adjusts the insurance account at month end for the premium paid on May 1, 2020.

14-May 31, 2020 Rent for the cart space for May has not yet been paid in the amount of $500.

15-May 31, 2020 May 31^st is a Tuesday, and Top Dogs two employees are paid $2,000 each every other Friday for a 10 day work week Monday thru Friday). (Note: The last payroll was paid on Friday, May 27^th)

16-May 31, 2020 -Supplies on hand at the end of May amounted to $400.

17- May 31, 2020 - Wrote-off the balance in the inventory account to cost of goods sold.