exclude part E

INTRODUCTION This project includes all of the steps in the accounting cycle covered to this point in Principles of Accounting. It is a comprehensive review of Chapters 1 to 6. There are four parts to the project-Parts A, B, C, and D. . Part A: The first task is to complete the work sheet and financial state ments for the month of January, to prepare and post adjusting and closing entries, and to prepare a post-closing trial balance. You are given the January 31 trial balance from which to work. - Part B: In this part, you will journalize the February transactions, post to the ledger accounts, and prepare a trial balance. - Part C: Your next job is to complete the work sheet, financial statements, adjusting and closing entries, and post-closing trial balance for February, - Part D: The next task is to examine the financial results for the theatre for two months and to make recommendations to the owners. Part E: If you have access to a computer accounting system, your teacher may have you complete this project using the computer. Your teacher may assign this project as a group project. If so, review page 309 before starting PART A The Westbrooke Cinema rents its premises from the Westbrooke Shopping Centre. The business has been open for a month and the management wants to find out if the business has made a profit or a loss. Using the additional information and the trial balance provided, do the following: 1. Complete an eight-column worksheet. 2. Prepare the monthly financial statements 3. Set up a General Ledger with the appropriate accounts and balances - 4. Journalize and post the adjusting and dosing entries. -5. Prepare a post-closing trial balance. Additional Information: Straight-line depreciation method is used by Westbrooke Cinema The equipment depreciates 20 per cent per year. (Note: Calculate the depreciation to the nearest dollar value.) Rent was prepaid for three months on January 1. Insurance was prepaid for three months on January 1. Supplies on hand January 31 were valued at $260. Westbrooke Cinema Trial Balance January 31, 19- . CREDIT DESIT $ 5653 6 000 1 800 520 89 563 $ 890 10 387 94 212 1 600 15 493 2 407 ACCOUNT No. Cash 100 Prepaid Rent 115 Prepaid Insurance 116 Supplies 117 Equipment 120 Accounts Payable 200 Bank Loan 201 V. Schultz, Capital 300 V. Schultz. Drawings 301 Ticket Sales 400 401 Confectionery Income 500 Salaries Expense 501 Advertising Expense Film Rental Expense 502 503 Cleaning Expense 504 Telephone Expense Equip. Repairs & Maintenance Expense 505 506 Film Transportation Expense 507 Heating Expense Electricity and Water Expense 509 General Expense 6 801 2 563 3563 850 95 2293 248 858 632 350 $123 389 508 $123 389 The following source documents came across the desk of the accountant dur- PART B Aditional Account Accumulated Depreciation Equipment Income Summary Depreciation Expense-Equipment Rent Expense Insurance Expense Supplies Expense 121 302 510 511 512 513 ing the month of February. Do the following: 1. Journalize the source documents and post to the General Ledger 2. Prepare a trial balance. Feb. 7 Cash register tapes from the box office for the week showing transactions No. 5345 to No. 6253 for total sales of S2 858 The money was deposited in the bank account. Weekly sales report for the confectionery showing a net income of $225. The money was deposited in the bank account Purchase invoices numbered 3817 and 5112 received from: Electronics Canada Ltd., S256 for final adjustments to the projector: The Daily Sentinel. $750 for newspaper advertisements. Cheques issued to: City Hydro, No. 375, S350 for electricity and water Bell Canada, No. 376. $45. 14 Cash register tapes from the box office for the week showing transactions No. 6254 to No. 8871 for total sales of $7 534. Weekly sales report for the confectionery showing a net income of $612. Purchases invoices numbered 5528 and T581 received from: International Film Distributors, 51 289 for rental of the film shown from Feb. 1 to 7: Commercial Cleaners Ltd., 5420 for cleaning the premises in the first half of the month. Cheques issued to: Craig Stationers, No. 377,535 for supplies International Film Distributors. No. 378. $890 on account V. Schultz, the owner. No. 379.5350 for personal drawings PROJECT 1/THE ACCOUNTING CYCLE..315 Employees, No. 380 to 390, for a total of $2 890 for salaries from Feb. 1. 21 Cash register tapes from the box office for the week showing transactions No. 8872 to No. 11 608 for total sales of 58 132 Weekly sales report for the confectionery showing a net income of $657 Purchases invoices numbered 571985, DC475 and 3297F received from: Air Canada, $178 for transportation of film CCHH Radio and TV. 5371 for spot advertising Stinson Fuels. $356 for oil. Cheques issued to: Electronics Canada Ltd. No. 391, 8256 on account The Daily Sentinel. No. 392. $750 on account: Triangle Office Supply, No. 393, S445 for supplies. 28 Cash register tapes from the box office for the week showing transactions No. 11 609 to 14 142 for total sales of $7 483 Weekly sales report for the confectionery showing a net income of $589. Purchases invoices numbered 6315 and T699 received from: International Film Distributors, S2 658 for rental of film from Feb, B to 28: Commercial Cleaners Ltd., 5435 for cleaning of premises. Cheques issued to: Commercial Cleaners Ltd., No. 394. $420 on account: V. Schultz, the owner, No. 395, 5350 for personal drawings: Employees, No. 396 to No. 406, for a total of $2 635 for salaries from Feb. 15. PART C Using the additional information given, complete the following procedures for the end of February: 1. Prepare an eight-column work sheet. 2. Prepare the financial statements. 3. Journalize and post the adjusting and closing entries. 4. Prepare a post-closing trial balance. Additional Information: Supplies on hand, February 28, were valued at $300. 1. On behalf of the owner, V. Schultz. prepare a short written report for (c) If the business were to apply for a $20 000 bank loan to purchase further equipment would it be approved? Concentrate your response on the ability to repay the loan and the bank's chance of recovering its money if the firm cannot meet its loan payments. PART D use in answering the following questions: (a) is the business profitable at this time? (b) is the profitability increasing or decreasing? (d) Has the value of the business increased or decreased over the fire two months of operation? (e) Should the present method of operating the confectionery be changed? G. Jones has submitted a proposal to V. Schultz to take over operation of the confectionery in the theatre and to pay Westbrooke Cinema 25 per cent of sales. At present, the salary for the booth operator is $500 per week and the cost of the mer chandise sold represents approximately 50 per cent of the sales revenue (Example: Sales 300 x 0.50 = 150 cost of merchandise sold.) Based on this information and the confectionery income for the first two months. Schultz would like an opinion on whether it would be more profitable to run the booth or to lease it to Jones. PART E 1. Use a computer to record the February transactions. 2. Print the journal, ledger, and trial balance. 3. Record the adjusting entries. 4. Print the adjusting entries and the financial statements. 5. Record the dosing entries. 6. Print the ledger and the post-closing trial balance