Accounting Cycle Project

Principles of Accounting I

Spring Semester 2022

On December 1, Ed Washington began an auto repair shop,

Washington's Quality Automotive. The following transactions

occurred during the month of December:

12/01 - Washington contributed $64,000 cash to the

business for shares of common stock.

12/01 - Purchased $9,000 of equipment, paying cash.

12/01 - Paid $800 for a four-month insurance policy starting

on December 1

12/09 - Paid $17,000 cash to purchase land, to be used in

operations

12/10 - Purchased office supplies on account, $1,500

12/19 - Borrowed $28,000 from the bank for business use.

Washington signed a note payable to the bank in the name

of the corporation. The note is due in 5 vears.

12/22 - Paid $1,100 cash for advertising expenses

12/26 - Paid $300 on account (transaction on 12/10)

12/28 - The business received a bill for utilities, to be paid

in January, $180

12/31 - Revenues earned during December included

$20.500 cash and $2.400 on account.

12/31 - Paid emplovees' salaries $3,200 and building rent

$500. (Note: record this as a compound entry)

12/31 The business received $1.160 for auto screening

services, to be performed next month

12/31 - Paid cash dividends of $5.000 to

stockholders

The business used the following accounts: Cash: Accounts

Receivable; Office Supplies; Prepaid Insurance; Land;

Equipment: Accumulated Depreciation-Equipment; Accounts

Payable; Utilities Payable; Interest Payable; Unearned Revenue;

Notes Payable; Common Stock; Retained Earnings; Dividends;

Income Summary; Service Revenue; Salaries Expense; Rent

Expense; Utilities Expense; Advertising Expense; Supplies

Exoense: Insurance Expense: Interest Expense; Depreciation

Expense-Equipment

Following is adjusting data:

Office Supplies used during December - $700

Depreciation for December - $150

One month of insurance has expired

Accrued Interest Expense - $120

Following are requirements for this assignment.

Prepare the journal entries for transactions and post to T

accouns

Prepare

an unadiusted trial halance

Prepare necessary adjusting journal entries and post to T

accounts

Prepare an adjusted trial balance

For Washington Quality Automotive at December 31,

Year 1, and for the month then ended, prepare

> Multiple-step income statement

Statement of Retained barnings

> Classified balance sheet in report form

Prepare closing entries and post to I accounts

Prepare a post-closing trial balance

Explanations for journal entries are not necessary. The

assignment is due at midnight on Wednesdav. 05/04/22. As a

suggestion, Excel simplifies much of the assignment. Your

solution must be turned in as an attachment to an email. All

financial reports must be in good order - i.e.. proper headings.

Examples of "good order" are in the first four chanters of

your textbook. Please be sure to include your name on your

submission (this mav be done wit a cover sheet)