For your sixth assignment, continue using the computer-based accounting system to account for JP Racing Incorporated. In this assignment you will account for the company's adjusting activities at the end of September. You must examine data, prepare five adjusting journal entries, and use the computer to put the journal entries into the computer-based accounting system and generate a few accounting reports. You will use the results of your work to answer a few audit test questions. To account for JP Racing Incorporated's adjusting activities at the end of September, you should take the following steps.Using the chart of accounts option, add the following accounts to the chart of accounts.

• 513 Rent Expense
• 517 Racing Supplies Expense
• 519 Depreciation Expense, Race Car
• 521 Depreciation Expense, Racing Equip.

Prepare the adjusting journal entries required to record the following items. Be careful. Remember you are accounting only for the month of September. If you prefer to first prepare your journal entries manually on paper, a journal entry form is available as part of assignment 6.A review of the company's prepaid rent showed that in September JP Racing had used the Vernon Speedway for three hours per day for eight days. At the end of September, JP Racing still has available the use of the speedway for three hours per day for four days.A review of JP Racing's racing supplies showed that $200 of racing supplies are still on hand at the end of September. The rest of the racing supplies had been used up during September.JP Racing uses the double-declining-balance method to depreciate its race car. The car has a useful life of five years and an estimated residual value of $750. Depreciation is calculated as if the race car had been purchased at the beginning of September. JP Racing rounds all depreciation calculations to the nearest whole dollar. Hint: Remember, you are accounting for only the month of September, not the full year!JP Racing uses the straight-line method to depreciate its racing equipment. The equipment has a useful life of four years and an estimated residual value of $1,100. Depreciation is calculated as if the racing equipment had all been purchased at the beginning of the September. JP Racing rounds all depreciation calculations to the nearest whole dollar. Hint: Remember, you are accounting for only the month of September, not the full year!Based on its revenues and expenses, JP Racing estimates that its September income taxes will be $225. The company's taxes will be paid next month in October.Using the JP Racing Corporation computer-based accounting system, enter your journal entries.Post your adjusting journal entries to the general ledger.Verify your account balances. If any of your account balances are incorrect, correct them by editing your journal entries or preparing additional journal entries. Post the correct entries to the general ledger and verify your balances. Repeat this process until all your general ledger balances are correct.Display JP Racing Incorporated's financial statements: income statement, statement of retained earnings, and balance sheet. Carefully review each financial statement and complete the audit test. To work on the audit test, first click on the [Assignments] button on the top menu. This will display your progress through the various JP Racing Corporation assignments. Click on "Begin" in the Audit Test column of the Assignment 6 row to open a window at the bottom of the screen. Remember, you can use the computer-based accounting system to view all journal entries, trial balance, and general ledger accounts.You can check your grade on any assignment by clicking on the [My Grades] button on the top menu. In the table displayed on the screen, you can see the points you earned for each assignment. If you do not earn the maximum points on an audit test, you should review the test so that you do not make similar errors in future assignments. Once an assignment's due date has passed, you can view the audit test by clicking on the score in the box of the audit test you want to review. When you click on the score, your answers and the correct answers will be displayed in a new window at the bottom of the screen. The answer you selected for a question will appear as a filled-in circle and the correct answer will appear in blue.Copyright 2007 Clairmont Carter