Company Information

Macks Accounting Service Inc. is a public corporation that has been in business for 1 year. The IPO for

the company authorized 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 and uses the straight line method for depreciation. The estimated useful life of the furnishings

is 5 years with a residual value of $2,500 and uses the double declining balance method. 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 monthly credit revenue will be uncollectible. 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.

Requirements

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

2. Record the following transactions in the general journal and post to the appropriate Taccount.

Journal descriptions are not necessary. Make sure description of credits are indented 3 spaces.

12/02/13Purchased

10 Units of Software on Account for $1,300

12/02/13Paid

employees Salaries owed

12/02/13Provided

Accounting Service on Account, $3,200

12/05/13Purchased

Office 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.

12/08/13Purchased

Supplies for $800 cash

12/10/13Received

$3,000 payment on account

12/11/13Sold

15 units of Inventory on Account, $4,500

12/22/13Received

$2,500 payment on Account

12/23/13Made

payment on Account, $2,500

12/24/13Received

monthly Utility bills, $850

12/27/13Received

$2,000 cash in advance for Accounting Services

12/29/13Provided

Accounting Service for Cash, $5,000

12/30/13Issued

1,000 shares of Common Stock at $15 per share

12/31/13Declared

dividends of $1.50 to outstanding shareholders as of 12/31/13.

BUSA

311 Intermediate Accounting Fall 2014

Excel Problem Set #1 Accounting

Cycle

Due Monday, October 20, 2014 by 11:59pm

Page 3 of 3

3. Prepare a Trial Balance to verify that total debits equal total credits.

4. Journalize the following yearend

adjustments Do not record them in the Taccounts.

Add them

to the appropriate place in the Trial Balance.

12/31/13Employees

salary for Dec. 1631

12/31/13Depreciation

on Building, use SL method

12/31/13Depreciation

on Furnishings, use DDB method

12/31/13Depreciation

on Office Equipment, use DDB method

12/31/13Supplies

on hand equal $1,625

12/31/13Physical

inventory count shows 23 units left in stock.

12/31/13$

500 of advance Service Revenue payment was earned in December

12/31/13Uncollectible

Accounts Expense for December

5. Prepare an Adjusted Trial Balance to verify debits equal credits at the end of the month

6. Prepare a multistep

Income Statement, a classified Balance Sheet, and a Statement of Retained

Earnings for the year ending December 31, 2013.

7. Prepare the closing entries for the year in the appropriate worksheet.

Here is what I have for the General Journal so far but I believe something is wrong because the credits and debits aren't even in the trial balance:

Company Information Mack½s Accounting Service Inc. is a public corporation that has been in business for 1 year. The IPO for the company authorized 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 and uses the straight line method for depreciation. The estimated useful life of the furnishings is 5 years with a residual value of $2,500 and uses the double declining balance method. 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 monthly credit revenue will be uncollectible. 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. Requirements 1. Opening balances. The opening balances for select accounts are provided in the appropriate Taccounts. 2. Record the following transactions in the general journal and post to the appropriate Taccount. Journal descriptions are not necessary. Make sure description of credits are indented 3 spaces. 12/02/13Purchased 10 Units of Software on Account for $1,300 12/02/13Paid employees Salaries owed 12/02/13Provided Accounting Service on Account, $3,200 12/05/13Purchased Office 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. 12/08/13Purchased Supplies for $800 cash 12/10/13Received $3,000 payment on account 12/11/13Sold 15 units of Inventory on Account, $4,500 12/22/13Received $2,500 payment on Account 12/23/13Made payment on Account, $2,500 12/24/13Received monthly Utility bills, $850 12/27/13Received $2,000 cash in advance for Accounting Services 12/29/13Provided Accounting Service for Cash, $5,000 12/30/13Issued 1,000 shares of Common Stock at $15 per share 12/31/13Declared dividends of $1.50 to outstanding shareholders as of 12/31/13. BUSA 311 Intermediate Accounting ½ Fall 2014 Excel Problem Set #1 Accounting Cycle Due Monday, October 20, 2014 by 11:59pm Page 3 of 3 3. Prepare a Trial Balance to verify that total debits equal total credits. 4. Journalize the following yearend adjustments Do not record them in the Taccounts. Add them to the appropriate place in the Trial Balance. 12/31/13Employees salary for Dec. 1631 12/31/13Depreciation on Building, use SL method 12/31/13Depreciation on Furnishings, use DDB method 12/31/13Depreciation on Office Equipment, use DDB method 12/31/13Supplies on hand equal $1,625 12/31/13Physical inventory count shows 23 units left in stock. 12/31/13$ 500 of advance Service Revenue payment was earned in December 12/31/13Uncollectible Accounts Expense for December 5. Prepare an Adjusted Trial Balance to verify debits equal credits at the end of the month 6. Prepare a multistep Income Statement, a classified Balance Sheet, and a Statement of Retained Earnings for the year ending December 31, 2013. 7. Prepare the closing entries for the year in the appropriate worksheet. Here is what I have for the General Journal so far but I believe something is wrong because the credits and debits aren't even in the trial balance