Case Study 3 - Landscaping Company For the month of August 1. Record the following transactions manually by hand or typed into non-general ledger software like Excel or Word (see provided templates in the Canvas assignment). a. It is decided to phase out the sale of products since there has not been much profit made on them compared to the services performed. To expand the ability to do landscaping work, a large tractor is leased month to month for $500 per month from Jims Rentals. First payment is made on August 1st by check. b. Paid for the planters received from Planters Wholesale Corporation (see items c & e from July) on August 1st by check. c. Paid $800 cash for August office rent on August 2nd to L. Lord. d. Completed landscaping work worth $2,000 for a new customer, Jill Jones. Received her check on August 3rd. e. Decide to offer a money back guarantee if not completely satisfied for all landscaping work. Our competitors are doing this, and we have lost a couple of customers because we did not offer this earlier. Paid a $75 cash refund on August 5th as a partial refund on one small part of a job that was not carefully done during July for customer Norman Garfield. f. On August 6th we sold the remaining 6 planters to a local business, Charlottesville Gardeners, for a reduced selling price of $12 a piece instead of $16 each, on account. No time discount will be offered. The terms are net 45 days. g. On August 7th we sold the remaining inventory of seed packets for $70, small bags of soil for $150, and bags of fertilizer for $280 to eBay Company and we received a $500 check numbered 1355. h. Planted Alice Browns shrubs and trees that she had already purchased on August 8th. We billed her $1,000 due in 30 days. i. Hannah Edinboro paid her bill late and we charged her a late fee of $5 on August 25th (see item q from July). j. Purchased more soil for $1,800 on August 10th from Speedy Delivery Company to be used in landscaping for our customers. Speedy offers new credit terms of 1/15, net 45. We use the net method. k. Paid $400 to the Charlottesville Truck Company for the truck rental for August and paid with a check on August 11th. l. Expanded into mowing and snow removal work and collected $2,200 on August 14th for mowing work done so far in August from Clearview Neighborhood Association. m. Collected $3,500 from Clearview Neighborhood Association to contract us for snow removal for the upcoming winter. It was all on one check received on August 15th. n. Paid $550 for the gas, insurance, etc. on the truck to All Things Truck Company by check on August 16th. o. Received the August electric bill from Charlottesville Utility Company on August 18th for $600 and decided to pay it next month (terms 20 days). p. Lent $1,000 to Green Acres Golf Course on August 21st with a note receivable, terms one-year with 4% interest. q. Billed Norman Garfield for $1,300 for more landscaping work completed on August 23rd. Terms are net 30 days. r. On August 25th, paid for the soil purchased earlier in the month (see item j above). s. Received the August water bill from Charlottesville Utility on August 29th and paid $100 cash. t. Hired the first part-time employee at the beginning of August and will be paying the employee monthly. We made the first payment on August 31st. The gross pay is $1,800 for working part time, with the following withholdings: federal income tax - $150, state income tax - $50, social security tax of 6.2%, and Medicare tax of 1.45%. The Federal unemployment tax rate is .6% and the state unemployment tax rate is 5.4%. The new employee has $150 deducted from their paycheck for health insurance and the company matches that amount. u. On August 31st the online bank statement is available for viewing and shows $1 earned on the interest-bearing checking account and a service charge of $30 for going below the minimum balance during the month. Assume the following checks have not cleared the bank: check # 23 and #24. Following are the necessary adjusting entries for the month of August, all to be prepared as of August 31st: v. Checked the supply of soil and determined there was $180 worth of soil left on hand. w. Other gardening supplies used this month equals $140. x. Depreciate the gardening equipment for the month. Continue to use straight-line depreciation with no salvage and use a ten-year useful life for all the items. y. Accrue the interest incurred on the note from Charlottesville Bank taken out on 6/6. z. Accrue interest earned on the certificate of deposit with the bank dated 6/6. aa. Recognize revenue earned from June payments in advance (see item d in June). bb. Recognize insurance that has expired. cc. Accrue interest earned on the $1,000 note from Green Acres Golf course dated August 21st (see item p above). dd. It is estimated that only 5% of all service revenue earned this month (but not sales revenue) will need to be refunded in the future on our new money back guarantee. ee. The new employee will earn vacation days valued at $750 a year. Accrue the monthly amount for compensated absences.