Business Events and Transactions for August 2019: The following transactions that occurred during the first week of August are to pay the outstanding liabilities from July 31" August 1 Pay the July accrued interest to the bank. Also make a $40,000 payment on the bank note principal August 5 Sunhurst Country Club, LLC paid its outstanding accrued July payroll of $7,000 plus an additional $1,000 for salaries incurred between August 1 and August 5. August 7 Sunhurst Country Club, LLC paid the outstanding accounts payable at July 31, 2019. Since no purchase discounts were available, the full amount owed was paid. Record the following transactions on August 31st that occurred during the month af August. Total Rental Fees for golf clubs, carts, etc collected in cash for the month were $24,500 Total Green Fee revenues collected in cash for the month were $211,000 The golf course had 25 more people sign up for Golf lessons beginning the first week of September. The cost remains $650 for six weeks of lessons Golf course maintenance expenses for the month of August paid in cash were $127,500. Total Salary Expenses for the month of August was $12,000; of that amount $9,000 was paid during the month of August and the remaining $3,000 will be paid next month. Total Utility Expense (water, sewer, electrical) was paid in cash for $45,100. Purchase and Sale of Inventory Items during August: The golf course officially opened the Pro Shop on August 1, 2019. Journal Entries are needed for the transactions involving Inventory sold in the Pro Shop. The weekly inventory sales and purchases information is contained on the Inventory Purchases and Sales Worksheet tab in the Excel workbook Remember all inventory purchases are on credit (Accounts Payable) and all sales are on credit (Accounts Receivable) The cash collected or paid related to inventory will be recorded during September 2019 The sales and inventory transaction involve 3 types of entries: 1. Record the total purchases for the month of August. All inventory purchases are acquired on Jam A nd EAF ARARABE 1. Record the total purchases for the month of August. All inventory purchases are acquired on credit (accounts payable). All payments for purchases are due at the beginning of the following month Record the total sales for the month of August. All sales made at the Pro Shop are sold on account (accounts receivable). The accounts receivable are due at the beginning at the following month. Use the Accounts Receivable and Sales Revenue accounts for these transactions 3. Calculate the total cost of Goods Sold for the month of August. To make this calculation you will need to complete the FIFO Inventory and Cost of Goods Sold Worksheet tab in the Excel workbook. Remember on the worksheet you are calculating the Cost of Goods Sold (not the sales). After completing the FIFO Inventory and Cost of Goods Sold Worksheet, prepare the journal entry to record the total cost of Goods for the month of August. August 2019 - Month End Adjusting Entries: Accrue the interest for the month of August on the Note Payable. Since the note was paid down $40,000 on August 1", the interest calculation is based on the new outstanding principal at the end of August. (To calculate the interest, use the new outstanding principal balance and calculate the new interest expense using the 6% interest rate. (Round calculation to the nearest dollar). Recognize the revenue earned from the lessons taught during August for the lessons paid for in July. Remember you collected golf lesson fees in July for lessons that began in August. (Four weeks of the July lessons were taught in August so recognize 4 weeks worth of revenue out of the 6 total weeks). Use the Golf Lesson Revenue account with this transaction Sunhurst Country Club, LLC had additional golf course maintenance expenses of $13,500 at the end of August to be paid in September Adjust Prepaid Insurance for the amount used in August August 31, 2019: Preparation of August Bank Reconciliation: Monthly Excel Workbook: In addition to using the Double Entry Software to record transactions, an Excel workbook has different tabs for calculating supporting information. Specifically, the Excel Workbook will contain the following five tabs: Bank Reconciliation - reconcile the bank statements to make the necessary adjustments to the general ledger cash account for unrecorded items. Inventory Purchases & Sales - the month's sales and purchases of inventory, separated by the week FIFO Inventory - a worksheet to determine the month's Cost of Goods Sold using the First In First Out system for the four main items that the shop keeps in inventory Statement of Cash Flows-template to prepare the Statement of Cash Flows for the golf course at the end of every month. Your team will need to review entries in the general ledger cash account to determine which items are Operatina. Investing, and Fin perating, Investing, and Financing activities and separate them accordingly. You will also need to print out the cash account out of Double Entry, and determine that the general ledger ending cash balance equals the ending cash balance on the statement of cash flows. August Calculations - a template for calculating the amount of prepaid insurance to expense, the interest expense on the outstanding note payable and a template for calculating the changes in the unearned golf lesson revenue account. Bank Reconciliation 12 Unadjusted Bank Balance: 13 Add: 14 Deposits in Transit $195,370 Unadjusted Book Balance: Add: $197,890 15 7 Subtract: 18 Outstanding Checks Subtract NSF Checks Service Charge Utility Expense 2 True Cash Balance $195,370 True Cash Balance $197,890 5 Part B. Adjusting Entries General Journal Account Titles Date Debit Credit August Weekly Sales & Purchases August FIFO Worksheet August Bank Reconciliation Augu... Balsare in Ending Bexes of Golf Balls Cost of Goods Purchased Tatal Con lovetery Available for Sale Purchased 60S 33.00 5 1.90 Beylovestory Purchases (Beginning of Weck) Week 1 Sales Weckl Sales Purchases (Begio W ) Week 2 Sales Week 2 Sales Wed 2 Sales Purchases (llegi of Weck Week 3 Sales Week 3 Sales Purchases (lleginning of Week) Week Sales Week 4 Sales 100 100 100 120 S 2 9.00 S 3.450 Journal Entry to Record Cost of Goods Sold Cost of Goods Sold luventory August Support Calculations August Weekly Sales & Purchases August FIFO Worksheet Aug... SUNHURST COUNTRY CLUB Statement of Cash Flows For the Month Ended August 31, 2019 Cash Flows from Operating Activities Rental Revenue Green Fee Revenue Golf Lesson Unearned Revenue Accounts Payable paid Interest Paid Maintenance paid Utilities Paid (?? +??) Salary Paid (?? +?? +??) Bank Service Charge NFS Check charges Net Cash Flow from Operating Activities Cash Flows from Investing Activities Net Cash Flows from Investing Activities Cash Flows from Financing Activities Payment on Bank Note Net Cash Flows from Financing Activities Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance ... August FIFO Worksheet August Bank Reconciliation August Statement Project Check Figure For small business, one of the key internal controls is the preparation of the month end bank reconciliation. The True Cash Balance for the project is $195,895. This balance appears in three places on the project. First, it is the August ending balance on the bank reconciliation. Second, it is the ending general ledger balance for the cash account (remember you need to post your bank reconciliation journal entries into the Double Entry software). Finally, this is the ending cash balance that shows on the August 31 Statement of Cash Flows. Financial Statement Analysis Questions (15 points) After preparing the journal entries and financial statements for Sunhurst Country Club, LLC. The board wants you to make a presentation on how the golf course is doing. Answer the following questions for the board. 1) At the end of August, is the golf course profitable? Do you think its operations are successful after two months? 2) Did the golf course have positive cash flows from operations during August? 3) Why is the net income at the end of August more than the cash flows from operations during August? Explain the reasons to the Board. What suggestions do you have to help the golf course collect cash from operations faster