Accounting Cycle Project: CONNECTWISE MEDIA CASE (40 points). ACC3313 FALL-19

1. Record the journal entries for all items in the GJ (General Journal) for ConnectWise Media LLC in EXCEL. Use Data-validation tool List (for the list use chart of accounts) for column C in GJ. This tool is explained in the instructional video. Note the first journal entry for item #1 has already been completed.
2. Post the transactions shown below in the appropriate general ledger accounts, use the T-accounts tab in EXCEL. Post the transactions by referencing cells in the GJ tab. Do not simply re-type the amounts. Use formulas to calculate balances for all T-accounts.

ConnectWise Media (CWM) provides social media marketing and consultation services for its clients. The following transactions occurred in December 2018. Transactions up to November 30 have been correctly recorded unless otherwise specified. On December 1, you took over the controller position and are now responsible for recording all transactions and preparing the financial statements.

1. On February 3, 2018, CWM signed an agreement with Deion Sanders to provide media consulting for his football camp. On December 1, CWM completed some of the work for Sanders, and issued an invoice for $20,000. Full payment was received on January 5, 2019. Note: the project did not involve video production.

2. On December 1, to prepare for expansion, CWM issued 1,000 shares of stock at a PAR value of $80 per share and signed a $30,000 note that is due December 1^st, 2022. The note carries a 5% annual rate of interest which is to be paid semi-annually so the first interest payment will be made May 31, 2018. (Do not forget to record accrued interest at the end of the year). On December 3, CWM purchased land for $90,000 on which to build a 4,000 sq. ft. facility.

3. On December 3, CWM received a $170,000 payment from the Livestrong Foundation for a promotional video that was invoiced on November 15, 2017.

4. On December 4, CWM paid VimBoot for $4,400 of supplies purchased and received on November 30, 2018.

5. On December 5, CWM paid the $230 telephone bill accrued for November.

6. On December 11, CWM purchased two computers from Dell Inc. for $4,900 each. CWM paid $400 down with a check; the remaining balance is due in 30 days (n/30). Each computer has an estimated life of two years and a salvage value of $50 each.

7. On December 12, an invoice in the amount of $150 was received from FedEx for transportation-in on the computers purchased on December 11. The invoice was paid the same day by check.

8. On December 7, NBC Sports contacted CWM about a potential video project. On December 15, CWM paid $1,000 to a consultant to gather focus groups to determine if there was sufficient demand for the project NBC Sports proposed. On December 30, the consultant provided TCM with the report discussing the results of the focus groups.

9. On December 17, CWM completed a project for Outright Fitness. A $12,000 contract had been signed for the social marketing project on August 1, 2018 and CWM had received full payment on that date.

10. On December 18, CWM had an unpleasant communication with O-Dij-Games, a company producing on-line video games and a long-time customer of CWM. Recently, O-Dij-Games was having difficulty with revenue generation and financing. O-Dij-Games management expressed an unwillingness to pay CWM the remaining $1,500 due to CWM because of dissatisfaction with the outcome from CWMs social media campaigns. O-Dij-Games indicated its intention to never use CWM services in the future. CWM wrote off the O-Dij-Games outstanding balance. CWM uses the allowance method for bad debts.

11. On December 19, CWM received $28,000 payment for a promotional project that was completed for Chuck Nash Chevy in October 2018. At the time the project had been completed in October, CWM recorded revenue and issued an invoice.

12. On December 26, CWM repaid a note for $18,000 plus interest. The money had been borrowed from SocialVid Consulting. The note was for 30 days and bore interest of 7%. CWM had not recorded accrued interest expenses related to this short-term note prior to its repayment.

13. On December 28, CWM issued a $420 check to reimburse an employee for travelling to Houston to make a presentation to potential customers.

14. On December 29, supplies of $1,200 were purchased on account (n/30) and delivered. The purchase was recorded in a real account.

15. A cash dividend of $8,900 was declared and paid on December 30.

16. Beginning in April 2018, CWM performed a variety of social media services for Art Unlimited over a period of six months. Art Unlimited failed to make its last payment of $11,000, which was due November 15, 2018, because it was waiting for money to be transferred to it from a related art foundation. On December 31, CWM allowed Art Unlimited to replace its accounts receivable with a six-month note receivable due June 30, 2019; the note carries a 5% interest rate.

17. On November 1, YMCA-Austin began negotiations with CWM for $54,000 of video production services. CWM would perform the video production services for YMCA-Austin over a 12-month period. CWM signed the contract on December 1, 2018 and began shooting immediately. Payments for the work are to be spread evenly throughout the 12-month period, with CWM billing YMCA-Austin on the last day of every month. CWM did not receive payment from YMCA-Austin for work CWM performed during December until January 1, 2019.

18. On December 15, a $55,000 social marketing project had been completed for JonyJones, but CWM forgot to record the transaction. You identify this oversight on December 31^st and issue an invoice for $55,000.

19. CWM recorded the purchase of a $1,600 insurance policy to a real account on August 31, 2018, for coverage from September 1 through December 31, 2018. The company correctly recorded monthly adjusting entries related to the insurance through November 30^th. CWM purchased a new 12-month policy on December 31 for $3,920 cash.

CWM used the following information to make adjusting entries:

20. All six CWM employees are monthly paid. Wages and Salary Expense for December 2018 was $9,380, which was paid on January 2, 2019.

21. A physical count of supplies indicated that, as of December 31, 2018, $700 worth of supplies were on hand.

22. December 2018s electricity bill of $100 was accrued on December 31 but was received and paid on January 2^nd, 2019.

23. Decembers Internet and telephone bill of $230 was accrued at month end and paid on January 3, 2019.

24. Make the adjusting entry necessary to record depreciation expense for all of 2018. Your assistant has calculated depreciation for the year, as shown in in the Extra Info tab. CWMs management has decided that a full month of depreciation is recorded if an asset is held for 15 days or more; if the asset is used less than 15 days in a month, no depreciation is recognized. For example, the equipment acquired on March 19 is depreciated as if it had been purchased bought on April 1. A computer sold on November 11 is depreciated as if it had only been used until October 31.

25. CWM paid $9,000 for a one-year lease on October 1, 2018. The lease covers rent for October 1 2018 through September 30, 2019. CWM has properly accrued for rent on a monthly basis through November 30^th. CWM still needs to record December 2018 leasing costs.

26. The Allowance for Doubtful Accounts should be established at 1% of Accounts Receivable as of December 31, 2018. Compute the balance after making the December adjusting entries.

27. During 2018 there were four notes payable outstanding (the three indicated below and the one repaid on December 26). Interest for two of these notes (SnapCut and WestBestVideo) is paid at maturity; interest on the Wells Fargo note is paid semiannually. Proper accruals of the interest related SnapCut and WestBestVideo were done as of November 30, 2018. Interest for December 2018 needs to be recorded.

Your assistant calculated interest for December 2018 below:

SnapCut Inc., 8.5%, 6 months, due Apr. 30, 2019	7,000 x 0.085 x (1/12) =	50
WestBestVideo, 8%, 6 months, due Apr. 30, 2019	2,000 x 0.08 x (1/12) =	13
Wells Fargo, 5%, 5 years, due Dec. 1, 2023	30,000 x 0.05 x (1/12) =	125

28. Make sure to record Insurance expense for December 2018 if you have not done it already in #19.