Case will be worked individually and submitted, electronically, in typed format on April 22, 2018 by 10 pm in Blackboard.Students have check figures given at the end of each respective month.Students are to download the Excel worksheets to use for journal entries and t-accounts and also utilize Excel for trial balances and financial statements.Students are to complete journal entries for each month, including adjusting and closing, trial balances, and financial statements consisting of Income Statement, Statement of Retained Earnings, and Balance Sheet in classified format.The minimum chart of accounts for the Deal Cleaning Corporation practice case is the following (more or less may be used):

Assets - Cash, Accounts Receivable - Regular Customers, Accounts Receivable - Warhawk Gym, Prepaid Insurance, Supplies, Cleaning Equipment, Truck and Land.

Liabilities - Accounts Payable - Home Improvement, Accounts Payable - Big Sparkle, Notes Payable - Land, Notes Payable - Truck, Unearned Service Revenue

Stockholder's Equity - Common Stock, Retained Earnings, Dividends - Jack Deal

Revenue - Service Revenue, Sales Discounts

Expenses - Auto Expense, Insurance Expense, Office Expense, Organization Expense, Rent Expense, Salary and Wage Expense

Date

Event

November 1, 2017

Jack Deal created Deal's Cleaning Service Corporation and hired a lawyer to perform the incorporation for a fee of $500.The par value of the common stock will be $1 per share and 50,000 shares are authorized in the charter of incorporation.Jack purchased 20,000 shares of the corporation's common stock for $20,000 using his personal funds.The corporation will operate an office cleaning service business in Pike Road, Alabama.The business will prepare financial statements on a monthly basis and calculate depreciation/amortization at June 30 and December 31, respectively, using the straight-line method.Any fixed assets purchased during the month are treated as if purchased at beginning of month.Interest is accrued at year-end and when paid.Jack paid the lawyer the incorporation fee.

November 1, 2017

The investors of the Deal's Cleaning Service appointed three individuals to the company's Board of Directors.The board will meet once every quarter to review the operations and set overall policy for the company, but it will not be involved in the day to day operations.Jack is appointed CEO of the corporation.The board appointed a clerk-secretary to assist Jack in his duties.The clerk-secretary will not receive any compensation.Jack is allowed to draw up to $1500 per month as a personal dividend but the Board will decide to pay shareholders a normal dividend.

November 1, 2017

Later in the day, two other investors purchased common shares of Deal's Cleaning Service Corporation.Investor #2 purchased 2,000 shares for $2,000 and Investor #3 purchased 3,000 shares for $3,000.

November 1, 2017

Deal purchased a 1-year insurance policy effective immediately.The policy is for the bonding of employees ($1300 annually) and insurance for the business and temporary headquarters ($500 annually).Deal pays for the insurance policy in cash.

November 1, 2017

A new investor supplied 2 acres of land in exchange for common stock and a mortgage note.The land has been appraised at $70,000 and the investor received 15,000 shares of stock and a note with a face value of $55,000.The note requires Deal's Cleaning Service to pay interest at a rate of 10% per year and the principal is due in five years.Interest is due each year on Nov 1.

November 1, 2017

Deal purchases a used truck for $10,000 paying $2,000 cash and the balance in a notes payable.The terms of the note are monthly payments for 4 years with a 5% annual interest rate.Jack fills up the truck with gasoline at a cost of $47.Jack decides that the truck will be useful for 4 years with a residual value of $1000.Simple interest is used for calculation of monthly payments and is not accrued until the 1^st of the month when the payment is made.Jack purchases annual insurance for truck at a cost of $600 which he paid in cash.

November 6, 2017

Deal signs up 14 weekly customers at a rate of $120 per week and 8 customers who will require cleaning every 2 weeks for a rate of $160 per service.Customers are to be billed on 15^th of month and at end of month with a 2% cash discount if paid within 3 days of billing, otherwise, the balance is due with 10 days of billing. Cleaning will be split between Vic and Emelia equally.Weekly and bi-weekly cleaning will commence on November 16, 2017 after Jack hires employees.

November 13, 2017

After going through several interviews, Jack hires an office manager, Linda, and two cleaning staff, Emelia and Vic.The cleaning personnel will each earn $12.00 per hour and the manager will earn $800 at every payday.All employees will work an eight-hour day, 5 days per week and will be paid on the 15^th and last day of the month.Employees are aware that they may have to work weekends for overtime rate at 1.5 times their hourly wages.At present, the employees will be treated as if they are contract employees and no taxes will be taken out of payroll.Employees are scheduled to begin work on November 16, 2017.

November 15, 2017

Deal's Cleaning Service agrees to rent a trailer that it will use as a temporary office.The rental cost, as determined by Ferry Company, the lessor, will be $250 per month.Ferry will prorate this month's rent using a November 15 start date.Deal pays November rent.In the future, rent will be due and paid at the first of the month.

November 15, 2017

Investor #2 sells 500 shares of Deal's Cleaning Service stock to his younger sister for $500.

November 15, 2017

Jack hires Ingram Home Improvement Store to quickly outfit the trailer with office furniture and chairs and laptop at a cost of $1800 on account.Deal's payment terms are n/eom.The laptop is less than $600 so Jack decides to expense the laptop in accordance with current Section 179 IRS rules instead of capitalizing the asset.

November 15, 2017

Jack purchases shirts for himself and company employees from Graphic Designs for $75.

November 15, 2017

Deal's Cleaning Service applies for credit to Big Sparkle Company.Since this is a brand new business and has no history of operations, Big Sparkle agrees to a $5,000 limit.

November 17, 2017

Jack purchases cleaning supplies from Big Sparkle Company totaling $6,200.After reaching the set credit limit, Deal paid cash for the balance of the purchase.Terms are n/eom.Supplies will be a prepaid expense and inventory of supplies taken at June 30 and December 31.

November 17, 2017

Jack receives the company's first large corporate cleaning job cleaning the Warhawk Gym for $2,800 after a basketball game.Vic and Emelia provide cleaning that night and Warhawk Gym is billed for the service with terms of 1/10, n/eom.Both Vic and Emelia work 4 hours overtime for this job.

November 17, 2017

Jack is contacted to clean up for a local church after a wedding party on November 18, 2017.Since the job was last-minute notice, Deal negotiates a $3000 fee and tells both Emelia and Vic to handle the job the same day.Since Vic needed to polish the floors, Vic works 3 hours and Emelia works 2 hours after the wedding.The church wires Deal's Cleaning Corporation's bank account $3000 the same day as the job.The church has a floor polishing machine.

November 20, 2017

Jack fills up the company truck with gasoline at a cost of $39.

November 20, 2017

Jack is contacted by Lane who will be hosting an Iron Bowl party at his residence on Saturday, November 25, 2017.Lane needs cleaning services on Sunday, November 26, 2017.Jack negotiates a $750 fee and Lane pays Jack on November 20, 2017.

November 23, 2017

Jack gives personnel a paid holiday.Since the company does not have a leave policy in place yet, this holiday will not affect payroll at end of month.

November 26, 2017

Vic and Emelia work 3 hours each to clean up after the Iron Bowl party.

November 27, 2017

Jack purchases gas for the truck for $46. On the way home, Jack decides he needs to pay his own personal bills so he draws $1200 for personal use from the business.Linda calls Jack to inform him that Warhawk Gym has paid their bill within the discount period.

November 29, 2017

Jack negotiates a deep cleaning of a bathtub at the home of the Smith family for that afternoon.He is paid $250 for this service.Jack purchases a special tool to complete this cleaning at Lowe's for $2000 and pays cash.Vic completes the service by 5:00 pm.Jack asks one of the store managers their opinion on the useful life of the tool and they give him an estimate of 3 years with $0 residual value.Jack determines that he will use that estimate for depreciation purposes for the tool.

November 30, 2017

The office manager completes payroll for Jack's review including the overtime pay for jobs after hours for Vic and Emelia.Jack pays the office manager and cleaning crew for their time work since November 16, 2017.

November 30, 2017

The office manager bills weekly and bi-weekly customers for service, pays accounts payable balances due, and completes adjusting and closing end of month journal entries and prepares a trial balance and financial statements for Jack's review.Check figures - Retained Earnings balance for balance sheet is equal to $4126 and Total Assets are $107,126

December 1, 2017

The office manager pays the beginning of the month expenses.

December 1, 2017

Deal signs up 6 more weekly customers at a rate of $120 per week and 6 customers who will require cleaning every 2 weeks for a rate of $160 per service.Customer terms are same as those signed up in November.

December 3, 2017

Ten of the weekly customers and 4 of the bi-weekly customers pay their balance through a bank wire deposit by the end of the day.

December 4, 2017

Jack purchases $52 in gas for the truck.

December 5, 2017

Jack is contacted by the church they cleaned up after the wedding on November 18, 2017.The church and Jack negotiate for Emelia and Vic to clean the church each Sunday night in December through December 24 for a rate of $400 per cleaning.The church pays the balance up front.

December 10, 2017

The remaining eight customers pay their balance from the November 30 billing through a bank wire.

December 10, 2017

Vic and Emelia work 3 hours each to clean up church after evening service.

December 13, 2017

Jack is contacted by the Smith family who wants a deep cleaning of all the tile in their house as well as their patio.Jack negotiates a $1420 price and Vic completes the job by end of December 15, 2017.Smith pays on 12/15/17 before Vic starts the job.

December 15, 2017

Linda prepares the payroll and bills the customers per Jack's instructions.

December 15, 2017

Warhawk Gym needs another cleaning after the Saturday graduation ceremonies.Jack negotiates a price of $2300 for 12/16/17 and Warhawk Gym is billed for the service with terms of 2/10, n/eom.The gym asks that the floors be polished so Jack goes to Home Depot and buys equipment that costs $1200 and according to the salesman will probably last 24 months with $0 residual value.Jack pays cash.

December 16, 2017

After the graduation, Vic works 5 hours and Emelia worked 3 hours on the job.Vic works longer since he has to polish the floors.

December 17, 2017

Vic and Emelia work 3 hours each to clean up church after evening service and musical.

December 18, 2017

Linda receives payments from 12 of the weekly customers and 8 of the biweekly customers by end of the day.

December 19, 2017

Jack goes to Big Sparkle to purchase supplies for $1920 on account.Jack goes by Office Depot and purchases paper, ink, and coffee for office and pays $197 in cash.

December 21, 2017

Guardian Credit Union contracts with Jack to clean their office after their annual Christmas Open House on December 22, 2017.Jack receives $1500 for the job.

December 22, 2017

Jack purchases gas for the company truck at $48 and draws out $1500 from the business account since he needs to buy Christmas gifts for his family as well as pay monthly bills.

December 23, 2017

Vic and Emelia work 3 hours each to clean the bank office after the Christmas Open House.

December 24, 2017

Vic and Emelia work 4 hours each to clean up church after evening service and candlelight service.Wax from candles was hard to remove from the carpet and choir chairs.

December 25, 2017

Jack gives the office staff and cleaning crew both Christmas and the next day a paid holiday.

December 25, 2017

The customers billed on December 15, 2017 that did not take the discount wire their payments to the Deal Cleaning Corporation business account.

December 28, 2017

The Lane family asks Jack to send Vic out on Friday to deep clean their kitchen tile after they saw the Smith family tile after cleaning at the Smith Christmas party.Jack negotiates a price of $1750 since its last minute and asks that the bill be paid by end of month.

December 29, 2017

Vic performs the job for the Lane family by 5 pm.

December 29, 2017

Since December 31 is a holiday and January 1 is a holiday, Jack instructs Linda to go ahead and prepare and pay payroll (and act as if through 31^st), bill customers, pays balances on accounts, performs adjusting and closing entries, and prepare monthly financials.Jack tells Linda that he has counted $2370 in supplies.Jack gives January 1 as a holiday.The Warhawk payment is also received on December 29.

December 31, 2017

Check Figures are Retained Earnings $10505 and Total Assets are $114255.