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ACCOUNTING 255 ASSIGNMENT Fall 2021 Version 5 (Late submissions without a valid excuse will not be marked) In this assignment, we are going to assume

ACCOUNTING 255 ASSIGNMENT Fall 2021

Version 5

(Late submissions without a valid excuse will not be marked)

In this assignment, we are going to assume that you incorporated a company named ABC Limited on January 1, 2020 and have operated the business for the three month period ending March 31, 2020. The column headings in the cash synoptic are to be set up as follows:

  • Date
  • Description
  • Cash followed by each statement of financial position account
  • Dividends
  • Sales revenue followed by each income statement account

Hand in a hard copy of your assignment (one per group) with a properly formatted multi-step income statement and statement of changes in equity on page 1 and the statement of financial position on page 2. These statements must have the most detail possible including the use of contra accounts. The journal entries should be printed on page 3 (landscape with gridlines be sure to make the column widths narrow use abbreviated account names and try to make the column no wider than the numbers in it).

To print efficiently, highlight the area you want printed and then hit CTRL and then P. This will bring up a Print window. Then click on Page Setup and on the Page tab, select Portrait and Fit To 1 page. Print the selected area. Also hand in the same document (this will be pages 4-5) but instead of showing the answers, show the formulas for each cell. This can be done by clicking on Formulas and then Show Formulas. Now reprint the financial statements ensuring that formulas are displayed in cells instead of amounts. Then on pages 6-7 in portrait, place the answer to part 2 of this assignment (see below). On your cover page please have your lecture number, group number, and names of each member of the group and print on only 1 side of the paper - dont use any fancy covers just stapled pages. On your cover page print the following and have each member of your group sign below it:

I verify that this formal report is the work of my group only and has not been copied in whole or in part from another source. I have not and will not lend this report (electronic or hardcopy) to any other student, either now or in the future.

Here is an example of how your journal entries should look. Lets assume that I have only 5 accounts in my business: cash, common shares, retained earnings, service revenue and income taxes. I create a column for each of these accounts listing from left to right, statement of financial position, then statement of changes in equity showing only the retained earnings column and then income statement accounts. I record the following transactions:

Jan 1 sold shares for $100 cash

Jan 2 earned service revenue of $50 cash

Jan 3 paid income taxes of $20

Here is a synoptic (debits are positive and credits are negative).

Date

Description

Cash

Common Shares

Retained Earnings

Service Revenue

Income tax expense

Jan 1

Sold shares

100

(100)

Jan 2

Earned revenue

50

(50)

Jan 3

Paid tax

(20)

20

Total before closing

130

(100)

(50)

20

Closing entry

(30)

50

(20)

Total after closing

130

(100)

(30)

0

0

Please record a closing entry at the bottom of the schedule as shown above. You must then create proper financial statements with the amounts contained therein being referenced from the totals above (income statement account balances would come from the third last row). We will mark the extent to which you have properly referenced these amounts.

image text in transcribed

1/1/2020 Issued shares in exchange for cash 1/1/2020 Received 4-year bank loan at a 5% interest rate (interest only payments made at the end of the year) 1/1/2020 Purchased furniture with cash (15 year useful life. $0 residual value, straight-line method) 1/2/2020 Purchased equipment on account (5 year useful life, $5,000 residual value, double-declining balance method) 1/3/2020 Signed five-year lease on office space (rent paid in cash on the first day of the month) 1/4/2020 Purchased supplies on account 1/7/2020 Received deposit on 12-month contract from Alberta Health Services starting on February 1, 2015 1/8/2020 Performed services on account for London Drugs 1/10/2020 Paid employee wages 1/12/2020 Performed services for WestJet who paid cash for the full amount 1/14/2020 Collected 50% of outstanding receivable from London Drugs 1/18/2020 Paid 100% of outstanding obligation related to the equipment 1/22/2020 Performed services for Chinook Mall who paid cash for the full amount 1/31/2020 Paid employee wages 1/31/2020 Determined that 10% of supplies had been used 1/31/2020 Determined that 3% is the average default rate for the commercial cleaning industry (use this rate going forward) 1/31/2020 All other applicable month-end adjusting entries 20,000 100,000 50,000 170,000 6,000 2,000 120,000 30,000 10,000 20,000 3,000 10,000 6,000 3,600 12,000 Date Transaction 2/1/2020 Paid monthly rent in cash 2/1/2020 Purchased computer on account (3 year useful life. $0 residual value, declining balance method) 2/1/2020 Received deposit on 6-month contract from Brookfield Residential (services performed in equal increments, starting February 2/4/2020 Received 100% of outstanding receivable from the London Drugs 2/10/2020 Paid employee wages 2/11/2020 Purchased supplies on account 2/18/2020 Paid 75% of outstanding payable relating to computer purchase 2/22/2020 Performed services on account for Peter's Drive-In 2/31/2020 Paid employee wages 2/31/2020 Determined that 75% of supplies had been used 2/31/2020 All other applicable month-end adjusting entries 10,000 2,000 50,000 10,000 120,000 6,000 120,000 10,000 72,000 60,000 Date Transaction 3/1/2020 Sold equipment despite the fact that it was working as intended 3/1/2020 Paid monthly rent in cash 3/2/2020 Performed services on account for the Ship and Anchor 3/15/2020 Paid employee wages 3/16/2020 Purchased a 12- month insurance package starting on March 1, 2015 3/17/2020 Declared dividend for common shareholders 3/18/2020 Paid 100% of outstanding payable relating to computer purchase 3/19/2020 Purchased supplies on account 3/22/2020 Performed services on account for Husky Incorporated 3/31/2020 Paid employee wages 3/31/2020 Paid outstanding balance for supplies 3/31/2020 Determined that Peter's Drive-In was bankrupt and would not be able to pay their outstanding receivable 3/31/2020 Made a principal only bank loan payment 3/31/2020 Determined that 80% of supplies had been used 3/31/2020 All other applicable month-end adjusting entries 1,000 36,000 10,000 10,000 1/1/2020 Issued shares in exchange for cash 1/1/2020 Received 4-year bank loan at a 5% interest rate (interest only payments made at the end of the year) 1/1/2020 Purchased furniture with cash (15 year useful life. $0 residual value, straight-line method) 1/2/2020 Purchased equipment on account (5 year useful life, $5,000 residual value, double-declining balance method) 1/3/2020 Signed five-year lease on office space (rent paid in cash on the first day of the month) 1/4/2020 Purchased supplies on account 1/7/2020 Received deposit on 12-month contract from Alberta Health Services starting on February 1, 2015 1/8/2020 Performed services on account for London Drugs 1/10/2020 Paid employee wages 1/12/2020 Performed services for WestJet who paid cash for the full amount 1/14/2020 Collected 50% of outstanding receivable from London Drugs 1/18/2020 Paid 100% of outstanding obligation related to the equipment 1/22/2020 Performed services for Chinook Mall who paid cash for the full amount 1/31/2020 Paid employee wages 1/31/2020 Determined that 10% of supplies had been used 1/31/2020 Determined that 3% is the average default rate for the commercial cleaning industry (use this rate going forward) 1/31/2020 All other applicable month-end adjusting entries 20,000 100,000 50,000 170,000 6,000 2,000 120,000 30,000 10,000 20,000 3,000 10,000 6,000 3,600 12,000 Date Transaction 2/1/2020 Paid monthly rent in cash 2/1/2020 Purchased computer on account (3 year useful life. $0 residual value, declining balance method) 2/1/2020 Received deposit on 6-month contract from Brookfield Residential (services performed in equal increments, starting February 2/4/2020 Received 100% of outstanding receivable from the London Drugs 2/10/2020 Paid employee wages 2/11/2020 Purchased supplies on account 2/18/2020 Paid 75% of outstanding payable relating to computer purchase 2/22/2020 Performed services on account for Peter's Drive-In 2/31/2020 Paid employee wages 2/31/2020 Determined that 75% of supplies had been used 2/31/2020 All other applicable month-end adjusting entries 10,000 2,000 50,000 10,000 120,000 6,000 120,000 10,000 72,000 60,000 Date Transaction 3/1/2020 Sold equipment despite the fact that it was working as intended 3/1/2020 Paid monthly rent in cash 3/2/2020 Performed services on account for the Ship and Anchor 3/15/2020 Paid employee wages 3/16/2020 Purchased a 12- month insurance package starting on March 1, 2015 3/17/2020 Declared dividend for common shareholders 3/18/2020 Paid 100% of outstanding payable relating to computer purchase 3/19/2020 Purchased supplies on account 3/22/2020 Performed services on account for Husky Incorporated 3/31/2020 Paid employee wages 3/31/2020 Paid outstanding balance for supplies 3/31/2020 Determined that Peter's Drive-In was bankrupt and would not be able to pay their outstanding receivable 3/31/2020 Made a principal only bank loan payment 3/31/2020 Determined that 80% of supplies had been used 3/31/2020 All other applicable month-end adjusting entries 1,000 36,000 10,000 10,000

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