Fill out the Ledgers

Fall 2020 - Practice Set Instructions: 1. Prepare journal entries to record external transactions. 2. Post journal entries to general ledger T accounts. 3. Prepare journal entries to record adjusting entries. 4. Post the adjusting entries to the general ledger T accounts (include a balance on each account) 5. Prepare an adjusted trial balance. 6. Prepare, using good form, an income statement, a statement of stockholders' equity, and a classified balance sheet. 7. Prepare closing journal entries. 8. Post the closing entries to the general ledger T accounts (include a balance on each account). 9. Prepare a post-closing trial balance. Company Information: Smith Inc. provides printing services to customers. They began operations on January 1, 2019. In January 2020, they realized the current VP had not created the records in an accounting system, and due to a time issue, the financial information must be recorded by hand to produce GAAP based financials for the year ending 2019. As such, they have hired you as the Accountant to get the manual system completed before implementing software for 2020. The research begins: First, you find the company uses straight-line depreciation for all long-term depreciable assets. They also must use the Allowance method to account for uncollectible accounts to be in line with GAAP. The company has decided to use the calendar year, so December 31 is the company's year-end. The company hired two employees on November 1, 2019, you will use the following for the November 27 and December 27 entries. The employees will receive a salary of $2,000 each (4,000 in total). Payroll is processed on the 27th of the month creating the employee and the employer taxes and then net pay is paid on the last day of each month. Upon further investigation, you find the following information related to the company's transactions during 2019. Process the information and produce GAAP based financials for Smith, Inc for the year ending December 31, 2019. Smith Inc. engaged in the following transactions in 2019. Jan 1 Jan 1 Jan 14 Feb 25 Mar 31 April 1 May 14 June 1 July 31 Aug 10 Sept 1 Oct 1 Nov 15 Nov 27 Nov 30 Dec 15 Dec 30 Dec 27 Dec 30 The owner invested $100,000 into the company in exchange for 5,000 shares of no-par common stock. Purchased a computer system for $40,000. Purchased $1,200 of supplies on account. Invoiced clients for services provided on account, $36,000. Paid rent for two years, $19,200. The company borrowed $50,000 from Bank of America. Collected $11,500 on account. Purchase a delivery van to delivery copies to customers, the van had a purchase price of $53,000, taxes on the van were $5,000 and document charges of $1,500 were paid. Paid $800 on account for supplies purchased on January 14. Received cash for services provided, $10,200. Paid utilities of $4,000. Received $30,000 in advance for services to be provided in the future. Paid for an ad in the local newspaper, $1,500. Processed employee payroll and employer taxes, gross earnings were $4,000. Paid the employee salaries, taxes are not due until January. The company declared and paid $6,000 in dividends. Invoiced clients for services performed totaling $8,500. Processed employee payroll and employer taxes, gross earnings were $4,000. Paid the employee salaries, taxes are not due until January. Smith Inc. Chart of Accounts Account Names Cash Common Stock Accounts Receivable Retained Earnings Allowance for Uncollectible Accounts Dividends Supplies Service Revenue Prepaid Rent Advertising Expense Equipment-Computer Utilities Expense Accumulated Depreciation - Computer Salaries Expense Delivery Van Depreciation Expense Accumulated Depreciation - Delivery Van Rent Expense Interest Expense Accounts Payable Supplies Expense Interest Payable Bad Debt Expense Deferred Revenue Salaries Payable Notes Payable Smith Inc. Journal General - External Transactions Account Name Credit Date Jan. 1 Debit $100,000 Cash Owner's Equity Capital Account $100,000 Jan. 1 $40,000 Computer System Account Cash $40,000 Jan. 14 $1,200 Supplies Account Accounts Payable $1,200 Feb. 25 $36,000 Accounts Receivable Revenue $36,000 Mar. 31 $19,200 Prepaid Rent Cash $19,200 Apr. 1 Bank Account $50,000 Bank of America Loan $50,000 May. 14 Cash $11,500 Accounts Receivable $11,500 Jun. 1 $59,500 Delivery Van Cash $59,500 Jul. 31 $800 Accounts Payable Cash $800 Aug. 10 Cash $10,200 Revenue $10,200 Sep. 1 Utilities $4,000 Cash $4,000 Oct. 1 Cash $30,000 Service Revenue $30,000 Nov. 15 $1,500 Advertisement Expense Cash $1,500 Nov. 27 $4,000 Salaries Salaries Payable $4,000 Nov. 30 $4,000 Salaries Payable Cash $4,000 Dec. 15 Dividends $6,000 Cash $6,000 Dec. 30 Accounts Receivable $8,500 Service Revenue $8,500 Dec. 27 $4,000 Salaries Salaries Payable $4,000 Dec. 30 $4,000 Salaries Payable Cash $4,000 Smith Inc. Journal General Date Debit Credit Account Name Common Stock Jan. 1 $100,000 To Capital Account $100,000 Jan. 1 $40,000 Computer System Account Cash $40,000 Jan. 14 Goods $1,200 Creditors $1,200 Feb. 25 Debtors $36,000 Services $36,000 Mar. 31 Rent $9,600 Fall 2020 - Practice Set $9,600 Prepaid Rent Cash $19,200 Apr. 1 Cash $50,000 To Loan from Bank of America $50,000 May. 14 Cash $11,400 To Debtors $ 11,400 Jun. 1 $59,500 Delivery Van Cash $59,500 Jul. 31 Creditors $800 Cash $800 Aug. 10 Cash $10,200 To Debtors $10,200 Sep. 1 Utilities $4,000 Cash $4,000 Oct. 1 Cash $30,000 To Advance for Services $30,000 Nov. 15 Advertisement $1,500 Cash $1,500 Nov. 27 No Entry Nov. 30 No Entry Dec. 15 $6,000 Capital/Earnings Cash $6,000 Dec. 30 Smith Inc. T accounts - Post External Transactions' Journal Entries, Adjusting Journal Entries, and Closing Journal Entries Smith Inc. T accounts - Post External Transactions' Journal Entries, Adjusting Journal Entries, and Closing Journal Entries Cash Accounts Receivable Supplies Allowance for Uncollectible Accounts Prepaid Rent Accumulated Depreciation- Computer Equipment - Computer Delivery Van Accumulated Depreciation - Delivery Van Accounts Payable Interest Payable Deferred Revenue Salaries Payable Notes Payable hampion Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Interest Expense Advertising Expense Depreciation Expense Supplies Expense Utilities Expense Rent Expense Bad Debt Expense