Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After your last final this quarter you meet a student with whom you graduated high school. You get to talking and find she is graduating

After your last final this quarter you meet a student with whom you graduated high school. You get to talking and find she is graduating this quarter in digital design. When she finds out you have just finished Financial Accounting I she asks if you will help set up and keepthe books for her new company, Jessi's Creative Design. Accounting was not included as part of Jessi's program and she really needs some help. You did very well in Financial Accounting I and agree to get her started. Jessi will hire a CPA to file all tax forms and apply with the IRS for a tax ID number. You will keep the books and monthly send them to the CPA.

Steps in the process:

  1. Jessicreatesachartofaccounts,numberingheraccountcategories-assets100, liabilities 200, stockholders' equity 300, revenue 400, and expense 500. Review the chart of accounts tab and familiarize yourself with the accounts to be used in this problem.
  2. Next,Jessinumberstheaccountswithinthecategories,beingsuretoleavenumbers open for possible future needs to add accounts. You will not need to add new accounts for this problem.
  3. After Jessi's Creative Design's first month of operations your friend delivers to you astack of invoices, check stubs, receipts and her first VISA-Business bill. You must decipher these in order to enter them into the accounts. After sorting through the source documents you make a list of transactions for the first month, April. For Part 1 of the Comprehensive Problem, you will complete the following tasks:
  4. Enter the transactions into the journal. Post the transactions to the T accounts. Prepare an unadjusted trial balance.

April 1.Jessi invested $10,000 in the company, resulting in her receipt of Common Stock.

April 2.Jessi purchased from Best Buy a computer and printer/ fax/ copier and monitor and software for $3500 on account. She got a 12 month no interest credit arrangement and will make monthly payments to Best Buy. You decide this will all be equipment.

April 3.Jessi set up a credit account with an office supply store for supplies, and purchased supplies including printer paper, CDs, and ink for the printer for $200 on account. Jessi gave you the bill but she does not have to make a payment until month end.

April 4.Jessi purchased a comfortable desk chair from a department store for $250, paying cash. You decide this will be equipment.

April 7.Jessi's CPA gave her some tax advice so she decided to develop a logo and otheradvertising materials for her car and customers. She had them printed and had her car painted with the new logo. Jessi paid $500 cash for the advertising. You decide this will be expensed in the current month. (Since this is advertising that will all be expensed in the account to use?)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Robert Libby, Patricia Libby, Frank Hodge

10th edition

1259964949, 1259964947, 978-1259964947

More Books

Students also viewed these Accounting questions

Question

Explain the pages in white the expert taxes

Answered: 1 week ago