Accounting Cycle Review: Problem A This problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting. the ultimate test is being able to handle data in reallife situations. This problem will give yoct valuable experience. You are to record transactions in a two column general journal Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting sycle. When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording, them are included, However, reason them out for yourself as well, Check off each transaction as it is recorded. July 1 Judar deposited $135,000 in a bank accosint for the purpose of buying Blast Off! The business is a recreation area offering throe large waterdides (called "Tubes") - one childrenis slide, an inner tube run, and a looping catreme side. 2 Bought Blast 0ff! in its cntircty for a total price of 3540.800. The assets include pool furniture, $3.500, the pool/hide facility fincludes fliler system, pools, pamp, and slides), $148,800, building, $96,200, and land, $292.000. Paid $120,000 down and signed a mortgage note for the remaindec. 2 Received and paid the bill for a one-year premiam for insurance, 512,240. (Contimand) 232 PART 1: The Accounting Cycle for a Senvce Business: Anolyting Business Transoctions 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. Insurance expired during the month, $1,020. b. Depreciation of building for the month, $480. c. Depreciation of pool/slide facility for the month, $675. d. Depreciation of pool furniture for the month. $220. c. Wages accrued at July 11, \$920. Your instructor may want you to use a work sheet for these adjustments. 5. Journalize adjusting entrics. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL-) 7. Prepare an adjusted trial balance. 8. Prepare the income statement. 9. Prepare the statement of owner's equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post closing entries to the ledger accounts. (Skip this step if using CL.GL.) 13. Prepare a post-closing trial balance. 1. What was the amount incurred for advertising on July 5? 2. How much of the concessions income was received in cash? 3. What was the amount of the principal paid on the mortgage? 4. How much did Judar withdraw from the business? 5. What is the amount of accrued wages? 6. How much insurance expired during the month? 7. What is the amount of depreciation of the pool/slide facility? 8. What is the ending balance of Judar's Capital account? 9. As of the end of the month, what is the amount of the book value of the pool/slide facility? 10. How much cash did Judar pay as a down payment on the purchase of Blast Off
