Double Entry Project

Business Events and Transactions for July 2019: The Investors set up Sunhurst Country Club, LLC to construct and operate the golf course. The investment company hired a professional staff to manage the golf course. The company will operate on a calendar year basis. The golf course is scheduled to open on July 1. Record the following transactions to set up the business July 1, 2019: Sunhurst Country Club received cash and issued Common Stock for $1,375,000 July 1, 2019: Sunhurst Country Club issued a 5 year Note Payable to Stearns Bank and Trust for $675,000 at a 6% annual rate. Interest is payable monthly on the 1st of each following month July 1, 2019: Sunhurst Country Club used the cash raised from the stock sale and the issue of the note payable to purchase the Sunhurst Country Club for $1,850,000. The purchase price was land $725,000, the Pro Shop building on the golf course $800.000 (building). maintenance equipment for $190,000, and 30 golf carts for $4,500 per cart or $135,000. July 1, 2019: Purchased one year's worth of Prepaid Insurance on July 1st for $36,000 cash. The golf course was officially opened the first Friday in July. Record the following transactions that occurred during the month on July 31th or as otherwise listed. Total Rental Fees for golf clubs, carts, etc collected in cash for the month were $17,400. Total Green Fee revenues collected in cash for the month were $214,000 Golf lessons beginning the first week of August have been paid for. The cost is $650 for 6 weeks of lessons. Thirty people have signed up. Golf course maintenance expenses for the month paid in cash at the date of service were $ 148,000. Total Salary Expense for the month was $60,000; of that amount $53,000 was paid during the month of July and the remaining $7,000 will be paid next month (August). Month End (July 31th) Adjusting Entries: Adjust Prepaid Insurance for the amount used in July Add an entry to accrue one month of interest on the Note Payable. Purchase of Inventory Items: The company intends to open the Pro Shop on August 1st. In preparation it purchased the following inventory items for the Pro Shop during July. The items were purchased from the Nike Corporation on account with the payment due at the beginning of August. 20 golf bags for $160/bag 20 sets of golf clubs for $1,075 / set 25 pairs of golf shoes for $140 / pair 120 boxes of golf balls for $32 / box (Hint: The weekly Purchase and Payment tab in the Excel file has already calculated the total purchase for each inventory item. The worksheet has calculated the total purchase and summarized the accounting entry needed for entry into the Double Entry software.) July 31th, 2019: Preparation of July Bank Reconciliation: The golf course received the bank statement for July 2019 from its bank during the first week of August 2019. You need to prepare the bank reconciliation for July by reconciling the cash balance shown on the bank statement with the unadjusted cash balance in the general ledger cash account The bank statement showed the cash balance was $205,305. The general ledger showed the unadjusted cash balance in the general ledger cash account at July $213,900. (Use the Bank Reconciliation tab of the Excel workbook). An examination of the bank statement disclosed the following: Outstanding checks totaled $4,900. The bank had issued a $1.800 debit memo for five insufficient funds (NSF) checks. The bank statement enclosures included a debit memo for $45 that had been deducted from the Sunhurst Country Club bank account as a monthly service charge. Deposits in transit were $10,750. The bank showed a check cleared the bank for $1000. When the transaction was reviewed it was determined that the check was recorded in the general ledger as $100. It should have been recorded on the books for $1000. The check was written for maintenance expenses. SUNHURST COUNTRY CLUB SUPPORTING CALCULATIONS Calculation of July Insurance expense: Prepaid Insuance 7/01/19 Financial Statement date 7/31/19 Number of months = 1 Prepaid Rent/12 - Monthly Rent Calculation of Interest Expense Principal X Interest Rate X Time Interest Expense Remember you are calculating the interest for only one month July. So your time is 1/12 Weekly Sales and Purchases for the Month of July 2019 All Purchases are made at the first of the week before the week's sales have been made Total Total Sales for Purchases For July Weekly Sales Week 1 Sales Quantity Sales Price Purchase Price Weekly Purchases End of Week 1 Purchases Quantity Bags Clubs Shoes Balls Clubs Shoes Balls Quantity Purchase Price Quantity Sales Price End of Week 2 Purchases Bags Clubs Shoes Balls Week 2 Sales Bags Clubs Shoes Quantity Quantity Sales Price End of Week 3 Purchases Bags Clubs Shoes Purchase Price $160.00 $1.075.00 $140.00 $32.00 3.200.00 21.500.00 3,500.00 3.840.00 Week 3 Sales Bags Clubs Shoes Balls Balls End of Week 4 Purchases Quantity Purchase Price Week 4 Sales Quantity Sales Price Clubs Clubs Shoes Shoes Balls Total Inventory Purchases for July 2019 Total Sales Revenue for July 2019 Journal Entry Journal Entry 12.040 Accounts Receivable Inventory Accounts Payable 32.040 Sales unhurst Country Club Group Member Names: July 31, 2019 art A Bank Reconciliation nadjusted Bank Balance: $205,305 Unadjusted Book Balance: $213,900 Add Bubtract Subtract rue Cash Balance $205,305 True Cash Balance $213.900 Part B. Adjusting Entries General Journal Account Titles Date Debit Credit 7/31/2019 SUNHURST COUNTRY CLUB Statement of Cash Flows For the Month Ended July 31st 2019 Cash Rows from Operating Activities Rental Collections Green Fee Cash Collected Golf Lesson Cash Collected - Unearned Prepaid Insurance Maintenance Paid Salaries Paid Bank Service Charges NFS Check charges Net Cash Row from Operating Activities Cash Flows from Investing Activities Purchase of Land Purchase of Buildings Purchase of Maintenance Equipment Purchase of Golf Carts Net Cash Flows from Investing Activities Cash Flows from Financing Activities Issuance of Stock Issuance of Note Payable to bank Net Cash Flows from Financing Activities Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance y Support Calculations July Weekly Sales & Purchases July Bank Reconciliation July Statement of Cash Flows