Economic Events

September 1. DunnRite Training sold one-half of the training equipment purchased on August 1 for $4,200.

September 7. DunnRite Training purchased $5,200 in office supplies on account.

September 10. DunnRite hired a part-time trainer, Buff Bratola, who is paid a commission for all training performed. Payment is made to the trainer on the 10th and 25th of each

month.

September 15. DunnRite Training received $5,000 cash for training services performed from September 1 to September 15.

September 15. DunnRite Training performed $12,000 of training services on account from

September 1 to September 15. Payment is due in 30 days.

September 10. DunnRite Training purchased 200 logoed tank tops for $10 per tank and 150 logoed t-shirts for $12 per t-shirt. This inventory was purchased on account with payment due in 30 days.

September 20. DunnRite Training received $1,000 as a partial payment from DunnRite Scholastic Programs. DunnRite Scholastic Programs issued a 90 note at 7% interest for the remaining balance.

September 25. DunnRite Training paid $5,000 in dividends.

September 25. DunnRite Training paid the part-time trainer $2,300 for the training services provided between September 10 and September 25.

September 28. DunnRite received $2,800 from customers who previously received services on account.

September 29. DunnRite received notification that one of their clients, Jim Walker, has filed for bankruptcy. DunnRite does not expect to collect the balance of $500 on Mr. Walker's account.

September 30. DunnRite Training received $7,000 cash for training services from September 16 to September 30.

September 30. DunnRite Training performed $16,000 of training services on account from

September 16 to September 30. Payment is due in 30 days.

September 30 DunnRite sold 78 tanks during the month of September for $25 per tank and 97 t-shirts at $30 per t-shirt. All customers paid cash at the time of purchase.

September 30. DunnRite has extra cash on hand and decides to repay (principal and interest) the loan from Aqua Bank. There is no penalty for early payment.

September 30. The part-time trainer earned $700 in commissions between September 26 and September 30. Payment will be made on October 10.

September 30. Nicole completed an inventory of supplies and determined that $2,300 in

supplies was on hand.

Assignment

1. ReviewthetransactionsanddevelopachartofaccountsforDunnRiteTraining, Inc. The chart of accounts should list the name of the account, the type of account (e.g., asset, liability, revenue, etc.) and where the account will appear (e.g., balance sheet, income statement, etc.)

2. Recordthetransactions

Set up an Excel spreadsheet with all the accounts identified in part 1 of this assignment listed in the spreadsheet's columns. Accounts should appear in the following order:

Assets Liabilities Equity Revenue Expense

Record each transaction in the rows under the account name.

The last two columns should be for the statement of cash flows. Indicate the

amount of the change in cash (+,-) and the type of cash flow (e.g., Investing,

Financing, Operating)

Record any necessary adjusting entries in the spreadsheet.

Determine the ending balance in each account by summing each column.

3. Preparecomparative(AugustpresentedalongsideSeptember)financialstatements (income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows) for DunnRite Training, Inc.

Note: Create tabs in the Excel worksheet to help with each of these tasks.

4. Prepareapresentationtoexplainthefinancialstatementsyouprepared.Assume that Nicole is your audience, and remember that she is an astute business professional with limited accounting knowledge. Be sure to explain (not just define) the following.

Financial Statement Elements: assets, liabilities, equity, common stock, retained earnings, revenues, and expenses

Why there is a difference between cash flows for the month and net income

for the month

The relationship between the financial statements (e.g., net income calculated in the income statement becomes part of the statement of retained earnings, etc.)

Significant differences between the financial results for August and September.

\begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow[t]{2}{*}{4} & & \multicolumn{7}{|c|}{ Assets } & \multicolumn{4}{|c|}{ Liabilities } & \multicolumn{2}{|c|}{ Equity } & \multicolumn{7}{|c|}{ Income Statement } & \multicolumn{2}{|c|}{\begin{tabular}{|c} Statement of Cash \\ Flows \end{tabular}} \\ \hline & Date & Cash & AccountsReceivable & Supplies & Merchandise & TrainingEquipment & PrepaidRent & PrepaidInsurance & InterestPayable & \begin{tabular}{|c} Accounts \\ Payable \end{tabular} & UnearnedRevenue & \begin{tabular}{|c|} Notes \\ Payable \end{tabular} & \begin{tabular}{|l} Capital \\ Stock \end{tabular} & RetainedEarnings & RevenueEarned & RentExpense & \begin{tabular}{|c|} Depre \\ ciatio \\ n \end{tabular} & COGS & InsuranceExpense & SupliesExpense & InterestExpense & Amount & Type \\ \hline INVESTED 25K IN STOCK & 8/1/23 & 25,000 & & & & & & & & & & & 25,000 & & & & & & & & & 25,000 & Financing \\ \hline BORROWED FROM AOUA & 8/1/23 & 5.000 & & & & & & & & & & 5.000 & & & & & & & & & & 5,000 & Financing \\ \hline 6 MONTH INSURANCE & 8/1/23 & (1,200) & & & & & & 1,200 & & & & & & & & & & & & & & (1,200) & Operating \\ \hline RENT & 8/1/23 & (3,000) & & & & & 3,000 & & & & & & & & & & & & & & & (3,000) & Operating \\ \hline 0 TRAINING EQUIP & \begin{tabular}{|l|} 8/1/23 \\ \end{tabular} & (8,000) & & & & 8,000 & & & & & & & & & & & & & & & & (8,000) & Operating \\ \hline 1 OFFICE SUPPLIES & \begin{tabular}{|l|} 8/7/23 \\ \end{tabular} & & & 2,500 & & & & & & 2,500 & & & & & & & & & & & & & \\ \hline 2 MERCH PURCHASE & 8/10/23 & & & & 2,200 & & & & & 2,200 & & & & & & & & & & & & & \\ \hline 3 RECEIVED CASH FROM PERFORM & 8/15/23 & 5,000 & (5,000) & & & & & & & & & & & & & & & & & & & 5,000 & \begin{tabular}{|l} Operating \\ \end{tabular} \\ \hline 4 UNEARNED REV & 8/17/23 & & 1,000 & & & & & & & & & & & 1,000 & 1,000 & & & & & & & & \\ \hline 5 COMPLETED TRAINING ON ACC & 8/20/23 & & 3,000 & & & & & & & & & & & 3,000 & 3,000 & & & & & & & & \\ \hline 6 DIVIDENDS & 8/25/23 & (2,500) & & & & & & & & & & & & (2,500) & & & & & & & & (2,500) & Financing \\ \hline 7 SVCS 2B PERFORMED & 8/28/23 & 6,000 & & & & & & & & & 6,000 & & & & & & & & & & & 6,000 & \begin{tabular}{|l} Operating \\ \end{tabular} \\ \hline 8RCVDCASHFORTRAINING & 8/31/23 & 7,000 & (7,000) & & & & & & & & & & & & & & & & & & & 7,000 & Operating \\ \hline SOLD TANKS & 8/31/23 & 2,160 & & & & & & & & & & & & 2,160 & 2,160 & & & & & & & 2,160 & \begin{tabular}{|l} Operating \\ \end{tabular} \\ \hline COMPLETED INVENTORY & 8/31/23 & & & (400) & & & & & & & & & & (400) & & & & & & 400 & & & \\ \hline 1 & 8/31/23 & & & & & & & & & & & & & & & & & & & & & & \\ \hline 2 RENT PAID AUGUST & 8/31/23 & & & & & & (500) & & & & & & & (500) & & 500 & & & & & & & \\ \hline 3 MONTHLY DEPRECIATION & 8/31/23 & & & & & (200) & & & & & & & & (200) & & & 200 & & & & & & \\ \hline 4 MERCH SOLD & 8/31/23 & & & & (864) & & & & & & & & & (864) & & & & 864 & & & & & \\ \hline 5 PREPAID INSURANCE & 8/31/23 & & & & & & & (200) & & & & & & (200) & & & & & 200 & & & & \\ \hline 6 INTEREST PAY & 8/31/23 & & & & & & & & 42 & & & & & (42) & & & & & & & 42 & & \\ \hline & 8/31/23 & & & & & & & & & & & & & & & & & & & & & & \\ \hline & 8/31/23 & & & & & & & & & & & & & & & & & & & & & & \\ \hline & & & & & & & & & & & & & & & & & & & & & & & \\ \hline 0 & & 35,460 & (8,000) & 2,100 & 1,336 & 7,800 & 2,500 & 1,000 & 42 & 4,700 & 6,000 & 5,000 & 25,000 & 1,454 & 6,160 & 500 & 200 & 864 & 200 & 400 & 42 & 35,460 & \\ \hline & & & & & & & & 42,196 & & & & 15,742 & & 26,454 & & & & & & & 2,206 & & \\ \hline \end{tabular}