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Accounting Acorn School Corporation (ASC): . The Chart of Accounts is as follows: ACORN SCHOOL CORPORATION CHART OF ACCOUNTS ASSETS: 111 Cash 113 Accounts Receivable 115 Supplies 116 Prepaid Insurance 141 Equipment OWNER'S EQUITY: 311 Capital Stock 312 Retained Earnings 313 Dividends REVENUE: 411 Service Revenue LIABILITIES: 210 Notes Payable 220 Accounts Payable EXPENSES: 511 Rent Expense 512 Gas and Oil Expense 513 Wages Expense 514 Utilities Expense CREDIT Acorn School Corporation Post-closing Trial Balance January 31, 20XX DEBIT Cash $ 1,870 Accounts Receivable 1,700 Supplies Prepaid Insurance Equipment 18,440 Notes Payable Accounts Payable Common Stock Retained Earnings Dividends Service Revenue Rent Expense Gas and Oil Expense Wages Expense Utilities Expense $22,010 $15,000 1,640 4,000 1,370 $22,010 Instructions start on the following page. Good luck, do your best. 4 6 Financial Accounting - Turck Acorn School Corporation (ASC) (cont): The following transactions were completed by ASC during February. February 1 Due to expected increase in enrollment, hired two part-time employees. 2 Paid rent for the month, $270. 3 Paid for a one-year insurance policy, $288. Received payments from customers for February's services provided, $650. 5 Bought supplies on open account from Duncan Office Supply Co, $85. Ordered playground equipment. 8 Made payment to a vendor on open account, $170. 9 Received $1,200 of the $1,700 by from customers for services provided and invoiced in January, 10 Billed(i.e., invoiced) customers for services to be performed in February, but not yet paid for, $700. 11 Paid off the obligation for the supplies purchased on February 5. 13 Received the playground equipment ordered on Feb. 6. Paid cash, $1,000. 17 Purchased office equipment on open account, $290. 19 Paid this month's utility bill, $145. 20 Received payments on open account from customers of $500. These customers were originally billed (i.e., invoiced) on Feb. 10. 21 Paid part-time employees for their work through the first three weeks of February, $240. The next pay-day is March 24. 27 Received an invoice from the local gas station for February's gas expenses, $35. ASC will pay invoice on March 10. 28 Declared and paid a dividend of $110. Instructions 1. Use good technique and record transactions for February begin on page 17 of the General Journal. (include a short explanation for each journal entry), (leave a blank line between each balanced and complete journal entry) 2. Post all February entries to the General Ledger. (CkFig: Cash balance $1,912) 3. At the end of the month, prepare an Unadjusted Trial Balance. Use your own paper. (CkFig: debits = 23,515) 4. Prepare General Purpose Financial Statements for the month of February. Use your own paper. (CkFigs: Net Income $660; Retained Earnings $1,920) 5. For the practice, journalize but do not post the Closing Journal Entries for this assignment. Two main goals of Financial Statements are to faithfully represent (i.e., make trustworthy reports for) (1) economic results of operations (i.e., Income Statement) for the reporting period (February) and (2) economic financial position (i.e., Balance Sheet) at the end of the reporting period (as of February 28). ***** Go to page - 9- of this SupEx assignment and prepare your responses to the issues raised for 6. and 7.. 6. See page - 9- 7. See page-9- Goals of Financial Statements are to provide trustworthy reports that faithfully represent the company's economic realities. Goal (1) economic results of operations (i.e., Income Statement) for the reporting period (February) and Goal (2) economic financial position (i.e., Balance Sheet) at the end of the reporting period (as of February 28). 6. REPORTING FAILURES: Find Goal (1) Income Statement reporting failures: a. Which expense account on ASC's February Income Statement is failing to faithfully represent the economic results of operations for February? b. To better faithfully represent economic results, list at least 2 expense accounts that should be accounted for and reported on ASC's February Income Statement. Hint: only $35 of Supplies are physically on-hand at month-end. 7. REPORTING FAILURES: Find Goal (2) Balance Sheet reporting failures: a. List at least 2 asset accounts that as reported on Feb. 28, are overstated. b. Name at least one missing (and therefore understated) liability account that should be accounted for and reported on ASC's Balance Sheet as of February 28. Accounting Acorn School Corporation (ASC): . The Chart of Accounts is as follows: ACORN SCHOOL CORPORATION CHART OF ACCOUNTS ASSETS: 111 Cash 113 Accounts Receivable 115 Supplies 116 Prepaid Insurance 141 Equipment OWNER'S EQUITY: 311 Capital Stock 312 Retained Earnings 313 Dividends REVENUE: 411 Service Revenue LIABILITIES: 210 Notes Payable 220 Accounts Payable EXPENSES: 511 Rent Expense 512 Gas and Oil Expense 513 Wages Expense 514 Utilities Expense CREDIT Acorn School Corporation Post-closing Trial Balance January 31, 20XX DEBIT Cash $ 1,870 Accounts Receivable 1,700 Supplies Prepaid Insurance Equipment 18,440 Notes Payable Accounts Payable Common Stock Retained Earnings Dividends Service Revenue Rent Expense Gas and Oil Expense Wages Expense Utilities Expense $22,010 $15,000 1,640 4,000 1,370 $22,010 Instructions start on the following page. Good luck, do your best. 4 6 Financial Accounting - Turck Acorn School Corporation (ASC) (cont): The following transactions were completed by ASC during February. February 1 Due to expected increase in enrollment, hired two part-time employees. 2 Paid rent for the month, $270. 3 Paid for a one-year insurance policy, $288. Received payments from customers for February's services provided, $650. 5 Bought supplies on open account from Duncan Office Supply Co, $85. Ordered playground equipment. 8 Made payment to a vendor on open account, $170. 9 Received $1,200 of the $1,700 by from customers for services provided and invoiced in January, 10 Billed(i.e., invoiced) customers for services to be performed in February, but not yet paid for, $700. 11 Paid off the obligation for the supplies purchased on February 5. 13 Received the playground equipment ordered on Feb. 6. Paid cash, $1,000. 17 Purchased office equipment on open account, $290. 19 Paid this month's utility bill, $145. 20 Received payments on open account from customers of $500. These customers were originally billed (i.e., invoiced) on Feb. 10. 21 Paid part-time employees for their work through the first three weeks of February, $240. The next pay-day is March 24. 27 Received an invoice from the local gas station for February's gas expenses, $35. ASC will pay invoice on March 10. 28 Declared and paid a dividend of $110. Instructions 1. Use good technique and record transactions for February begin on page 17 of the General Journal. (include a short explanation for each journal entry), (leave a blank line between each balanced and complete journal entry) 2. Post all February entries to the General Ledger. (CkFig: Cash balance $1,912) 3. At the end of the month, prepare an Unadjusted Trial Balance. Use your own paper. (CkFig: debits = 23,515) 4. Prepare General Purpose Financial Statements for the month of February. Use your own paper. (CkFigs: Net Income $660; Retained Earnings $1,920) 5. For the practice, journalize but do not post the Closing Journal Entries for this assignment. Two main goals of Financial Statements are to faithfully represent (i.e., make trustworthy reports for) (1) economic results of operations (i.e., Income Statement) for the reporting period (February) and (2) economic financial position (i.e., Balance Sheet) at the end of the reporting period (as of February 28). ***** Go to page - 9- of this SupEx assignment and prepare your responses to the issues raised for 6. and 7.. 6. See page - 9- 7. See page-9- Goals of Financial Statements are to provide trustworthy reports that faithfully represent the company's economic realities. Goal (1) economic results of operations (i.e., Income Statement) for the reporting period (February) and Goal (2) economic financial position (i.e., Balance Sheet) at the end of the reporting period (as of February 28). 6. REPORTING FAILURES: Find Goal (1) Income Statement reporting failures: a. Which expense account on ASC's February Income Statement is failing to faithfully represent the economic results of operations for February? b. To better faithfully represent economic results, list at least 2 expense accounts that should be accounted for and reported on ASC's February Income Statement. Hint: only $35 of Supplies are physically on-hand at month-end. 7. REPORTING FAILURES: Find Goal (2) Balance Sheet reporting failures: a. List at least 2 asset accounts that as reported on Feb. 28, are overstated. b. Name at least one missing (and therefore understated) liability account that should be accounted for and reported on ASC's Balance Sheet as of February 28