Question
During its first month of operation, the Bethany's Bicycle Corporation, which specializes in bicycle repairs, completed the following transactions. March Transactions Date Transaction Description March
During its first month of operation, the Bethany's Bicycle Corporation, which specializes in bicycle repairs, completed the following transactions. | |
March Transactions | |
Date | Transaction Description |
March 1 | Began business by making a deposit in a company bank account of $20,000, in exchange for 2,000 shares of $10 par value common stock. |
March 1 | Paid the premium on a 1-year insurance policy, $2,400. |
March 1 | Paid the current month's store rent expense, $1,900. |
March 3 | Purchased repair equipment from Andrew Company, $5,800. Paid $1,000 down and the balance was placed on account. Payments will be $400.00 per month for 12 months. The first payment is due 4/1. Note: Use Accounts Payable for the Balance Due. |
March 8 | Purchased repair supplies from Jackson Company on credit, $650. |
March 10 | Paid telephone bill for March, $340. |
March 11 | Cash bicycle repair revenue for the first third of March, $1,650. |
March 18 | Made payment to Jackson Company, $400. |
March 20 | Cash bicycle repair revenue for the second third of March, $2,450. |
March 31 | Cash bicycle repair revenue for the last third of March, $1,250. |
March 31 | Paid the current month's electice bill, $250. |
March 31 | Declared and paid cash dividend of $1,000. |
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Use the following account descriptions for journal entries. | |||
Chart of Accounts | |||
Account Type | Account Number | Account Title | Normal Balance |
Assets | |||
111 | Cash | Debit | |
117 | Prepaid Insurance | Debit | |
119 | Repair Supplies | Debit | |
144 | Repair Equipment | Debit | |
145 | Accum Dep -Repair Equipment | Credit | |
Liabilities | |||
212 | Accounts Payable | Credit | |
213 | Income Tax Payable | Credit | |
Stockholders Equity | |||
311 | Common Stock | Credit | |
312 | Retained Earnings | Credit | |
313 | Dividends | Debit | |
Revenue | |||
411 | Bicycle Repair Revenue | Credit | |
Expenses | |||
511 | Store Rent Expense | Debit | |
512 | Telephone Expense | Debit | |
513 | Insurance Expense | Debit | |
514 | Repair Supplies Expense | Debit | |
515 | Dep Expense - Repair Equipment | Debit | |
516 | Income Tax Expense | Debit | |
517 | Electric Expense | Debit |
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REQUIREMENT #1: Prepare journal entries to record the March transactions in the General Journal below. Remember that Debits must equal CreditsAll of your Journal Entries should balance. | ||||
General Journal | ||||
Date | Account Number from Chart of Accounts tab | Account Title from Chart of Accounts tab | Debit | Credit |
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REQUIREMENT #2: Post the March journal entries to the following T-Accounts and compute ending balances. | ||||||
Date | Cash (111) | Date | Bicycle Repair Revenue (411) | |||
Prepaid Insurance (117) | Store Rent Expense (511) | |||||
Repair Supplies (119) | Telephone Expense (512) | |||||
Repair Equipment (144) | Insurance Expense (513) | |||||
Accum. Depr.-Repair Equipment (145) | Repair Supplies Expense (514) | |||||
Accounts Payable (212) | Depr. Exp.-Repair Equipment (515) | |||||
Income Taxes Payable (213) | Income Taxes Expense (516) | |||||
Common Stock (311) | Electric Expense (517) | |||||
Retained Earnings (312) | ||||||
Dividends (313) | ||||||
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REQUIREMENT #3: Prepare a trial balance for March in the space below. | |||
Bethany's Bicycle Corporation Trial Balance March 31 | |||
Account | Account | Balance | |
Number | Title | Debit | Credit |
|
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Requirement #4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations! a) One month's insurance has expired. b) The remaining inventory of repair supplies is $200. c) The estimated depreciation on repair equipment is $120. d) The estimated income taxes are $65. | |||||
Requirement #5: Post the adjusting entries on March 31 below to the General Ledger T-accounts and compute adjusted balances. Just add to the balances that are already listed. | |||||
General Journal | |||||
Date | Account Number from Chart of Accounts tab | Account Title from Chart of Accounts tab | Debit | Credit | |
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REQUIREMENT #6: Prepare an Adjusted Trial Balance in the space below. | |||
Bethany's BicycleCorporation Adjusted Trial Balance March 31 | |||
Account | Account | Balance | |
Number | Title | Debit | Credit |
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Requirement #7: Prepare the financial statements for Bethany's Bicycle Corporation as of March 31 in the space below. You will only be preparing the Income Statement, Statement of Retained Earning, and the Balance Sheet. The Statement of Cash Flows is a required Financial Statement, but is not required for this project. | |||||||||
Bethany's Bicycle Corporation | Bethany's Bicycle Corporation | Bethany's Bicycle Corporation | |||||||
Income Statement | Statement of Retained Earnings | Balance Sheet | |||||||
For the Month Ending March 31 | For the Month Ending March 31 | March 31 | |||||||
Revenues: | Retained Earnings, March 1 | $0 | Assets: | ||||||
Bicycle Repair Revenue | Add: Net Income | Cash | |||||||
Total Revenue | 0 | Subtotal | 0 | Prepaid Insurance | |||||
Less: Dividends | Repair Supplies | ||||||||
Expenses: | Retained Earnings, March 31 | $0 | Repair Equipment | ||||||
Store Rent Expense | Less: Accum. Depr. | ||||||||
Telephone Expense | Total Assets | $0 | |||||||
Insurance Expense | |||||||||
Repair Supplies Exp. | Liabilities and Stockholders' Equity | ||||||||
Depreciation Exp. | Liabilities: | ||||||||
Income Taxes Expense | Accounts Payable | ||||||||
Electric Expense | Income Taxes Payable | ||||||||
Total Expenses | 0 | Total Liabilities | 0 | ||||||
Net Income | 0 | Stockholders' Equity: | |||||||
Common Stock | |||||||||
Retained Earnings | |||||||||
Total Stockholders' Equity | 0 | ||||||||
Total Liabilities & Stockholders' Equity | $0 |
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Requirement #8: Prepare the closing entries at March 31 in the General Journal below. Hint:Use the balances for each account which appear on the Adjusted Trial Balance for your closing entries. | ||||
Requirement #9: Post the closing entries to the T-Accounts on the General Ledger worksheet and compute ending balances. Just add to the adjusted balances already listed. | ||||
General Journal | ||||
Date | Account Number from Chart of Accounts tab | Account Title from Chart of Accounts tab | Debit | Credit |
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Requirement #10: Prepare a post-closing trial balance as of March 31 in the space below. | |||
Bethany's Bicycle Corporation Post-Closing Trial Balance March 31 | |||
Account | Account | Balance | |
Number | Title | Debit | Credit |
Requirement #10: Prepare a post-closing trial balance as of March 31 in the space below. | |||
Bethany's Bicycle Corporation Post-Closing Trial Balance March 31 | |||
Account | Account | Balance | |
Number | Title | Debit | Credit |
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