Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below is the assignment outline. I need help with #6. (preparing income statement, statement of retained earnings, and balance sheet) To do so, I also

Below is the assignment outline. I need help with #6. (preparing income statement, statement of retained earnings, and balance sheet)

To do so, I also need help with the adjusted trial balance. I posted that in a previous question, but will also post hereimage text in transcribedimage text in transcribed

image text in transcribed

image text in transcribed

Dear Newbie,

Welcome to Hampton! My name is Julio Antoni, your supervisor. We believe the best way for you to get familiar with what you are going to be doing here is to throw you right in, so we are asking you to start working on the books for us right away.

For this project you will complete Hamptons entire accounting cycle. You will be required to record entries in a journal, post to a ledger, complete a trial balance, and prepare financial statements. Transactions will include day to day operations, adjusting entries, dividends and closing entries. All of the work will be completed in the provided Excel workbook (make sure you save the file on to your computer!)

Company Information

Hampton Accounting Service Inc. is a public corporation that has been in business for 1 year. The company is authorized to issue 100,000 shares of common stock at $1 par value. The company provides accounting services and sells accounting software.

To date the company has issued 20,000 shares of common stock, which are still outstanding. The issued shares were sold at $10 per share. A building and furnishings were purchased at the start of the year. The cost of the building was $140,000 and the cost of the furnishings was $30,000. The depreciation will be recorded annually. The estimated useful life of the building is 20 years with a residual value of $10,000. The company uses the Straight line method to depreciate the building. The estimated useful life of the furnishings is 5 years with a residual value of $2,500. The company uses the Double Declining Balance method to depreciate furnishings. The current inventory consists of 30 units of software at a cost of $140.00 each. Inventory is costed using LIFO and the perpetual inventory system. The company uses an allowance method to account for uncollectible accounts. It is estimated that 1% of net credit revenue will be uncollectible, adjusted monthly. Employees are paid $2,500 salary twice a month, on the 16th for the first half of the month and on the 2nd of the following month for the last half of the month. Ignore income tax calculations.

Project Requirements

1. Opening balances- The opening balances for select accounts are provided in the appropriate ledger accounts.

2. Record the following transactions in the journal and post to the ledger:

12/02/xx- Purchased 10 Units of Software on Account for $1,300

12/02/xx- Paid employees Salaries owed

12/02/xx- Provided Accounting Service on Account, $3,200

12/05/xx- Purchased Computer Equipment on Account, $4,800

Note: The equipment has an estimated useful life of 4 years, residual value of $50 and uses the DDB method.

12/08/xx- Purchased Supplies for $800 cash

12/10/xx- Received $3,000 payment on account

12/11/xx- Sold 15 units of Inventory on Account, $4,500

Note: This transaction requires two journal entries. The first entry should deal with the sale, and the second should deal with the inventory

12/11/xx- Made payment on Account, $1,000

12/12/xx- Purchased 20 units of Inventory on Account, $2,400

12/14/xx- Received a bill for Advertising and paid it, $250

12/15/xx- Provided Accounting service for Cash, $8,000

12/16/xx- Paid employees salary for Dec. 1-15

12/17/xx- Provided Accounting Service on Account, $6,000

12/19/xx- Sold 10 units of Inventory on Account, $3,000

Note: This transaction requires two journal entries. The first entry should deal with the sale, and the second should deal with the inventory

12/22/xx- Received $2,500 payment on Account

12/23/xx- Made payment on Account, $2,500

12/24/xx- Received and paid monthly Utility bills, $850

12/27/xx- Received $2,000 cash in advance for accounting services

12/29/xx- Provided Accounting Service for Cash, $5,000

12/30/xx- Issued 1,000 shares of Common Stock at $15 per share

12/31/xx- Declared dividends of $1.50 to outstanding shareholders as of 12/31/xx.

Note: Be sure to debit retained earnings and credit dividends payable.

3. Prepare a trial balance to verify that total debits equal total credits.

4. Record the following adjustments in the journal and in the trial balance. DO NOT post the adjusting entries to the ledger. Instead, post them directly as adjustments to the trial balance.

12/31/xx- Employees salary for Dec. 16-31

12/31/xx- Depreciation on Building, use SL method (calculate for entire year)

12/31/xx- Depreciation on Furnishings, use DDB method (calculate for entire year)

12/31/xx- Depreciation on Computer Equipment, use DDB method (calculate for one month)

12/31/xx- Supplies on hand equal $1,625

12/31/xx- Inventory count shows 33 units, some damaged units were disposed of during the month

12/31/xx- $500 of advance payment was earned in December

12/31/xx- Uncollectible Account expense for December

5. Prepare an Adjusted trial balance to verify debits equal credits at the end of the month

6. Prepare the 3 main financial statements for the year ending December 31, 20xx. (INCOME STATMENT, STATMENT OF RETAINED EARNINGS, & BALANCE SHEET)

I hope thats clear. If you have any questions, feel free to contact me.

Sincerely,

Julio Antoni

Senior Accountant

Hampton Accounting Services Inc.

nadjusted Trial Balanc Debit Adjustments Credit Adjusted Trial Balance Debit Credit Debit Credit Cash Accounts Receivable Allowance for Unc. Accounts Supplies Inventory Building Hccumulated Depreciation Building Furnishing Accumulated Depreciation-Furnish Office Equipment Accumulated Depreciation-Off. Equip Accounts Payable Unearned Service Revenue Salary Payable Dividends Payable Stock, Common Additonal Paid in Capital Retained Earnings Service Revenue Sales Revenue Advertising Expense Depreciation Expense Repairs & Maintenance EHpense Supplies Expense Uncollectible Accounts Expense Utilities Expense Cost of Goods Sold 6 alary Epense Total Chart of AccountsJournal Ledger TrialBalance Income Stmt Stmt of RE Balance Sheet nadjusted Trial Balanc Debit Adjustments Credit Adjusted Trial Balance Debit Credit Debit Credit Cash Accounts Receivable Allowance for Unc. Accounts Supplies Inventory Building Hccumulated Depreciation Building Furnishing Accumulated Depreciation-Furnish Office Equipment Accumulated Depreciation-Off. Equip Accounts Payable Unearned Service Revenue Salary Payable Dividends Payable Stock, Common Additonal Paid in Capital Retained Earnings Service Revenue Sales Revenue Advertising Expense Depreciation Expense Repairs & Maintenance EHpense Supplies Expense Uncollectible Accounts Expense Utilities Expense Cost of Goods Sold 6 alary Epense Total Chart of AccountsJournal Ledger TrialBalance Income Stmt Stmt of RE Balance Sheet

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

Step: 3

blur-text-image

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

Shrimply Inflation

Authors: Eiche Gardner

1st Edition

B0BYLXHYCY, 979-8386901233

More Books

Students also viewed these Finance questions

Question

d. The more profitable a firm, the greater its monopoly power.

Answered: 1 week ago

Question

=+Does this message make effective use of the AIDA model?

Answered: 1 week ago