Goal 1
Comprehensive Problem The Accounting Cycle using journals and T-accounts
Goal 1 Comprehensive Problem The Accounting Cycle using journals and T-accounts The trial balance of Pioneer Advertising Agency as of January 1, 2022 had the following normal balances: $ 14,000 3,000 850 4,800 1,150 3,000 1,000 Cash Accounts Receivable Supplies Prepaid Rent Office Equipment Accumulated Depreciation Accounts Payable Salaries Payable Interest Payable Unearned Revenue Note payable Common Stock Retained Earnings Dividends Advertising Revenue Bad Debt Expense Depreciation Expense Insurance Expense Interest Expense Rent Expense Salary Expense Supplies Expense Rectangular Ship 10,000 7,500 Pioneer Advertising Agency completed the following transactions during 2022. 1. Issued stock $30,000. 2. Paid the salaries payable from the prior year. 3. Paid $600 cash for supplies. 4. Collected $4,000 in advance for advertising to be completed in the future. 5. Paid the amount due on account. 6. Prepaid rent of $3,600 for a six month period. 7. Collected $3,800 from a customer for advertising sales. 8. Paid insurance for the current period, $2,000. 9. Completed a large advertising project and billed the customer $12,500. 10. The company purchased office equipment for $20,000 making a down payment of $2,000 and taking a loan on the remainder of $18,000 at a 3% annual interest rate. 11. Collected $3,500 cash from customer on account. 12. Purchased office supplies, paying $400 on account. 13. Received $3,000 cash for advertising sales. 14. Paid employees, $1,800. 15. Paid $200 in dividends to the stockholders. Rectangular Adjustments: 16. Prepaid rent used during the year was $600 per month. 17. Unearned services earned during the year $5,000. 18. Accrue interest on the note payable for one full year. 19. Accrue salaries for year end, $300. 20. Depreciation for the year was $5,000. 21. There was $500 supplies on hand at year end. 22. There were no bad debts for the period. Required: a. Record the above transactions (#1-15) and the adjustments (#16-21) in the general journal. (You are to create a general journal page in Excel and number each transaction you record; ie 1,2,3 etc.) b. Post the entries to T-Accounts. i. Use a new TAB in EXCEL to create the T-Accounts. (Hint: the CASH will have the most postings) ii. Line up the T-Accounts in organized columns, under each of the following categories; (Assets, Liabilities, Equity, Revenues, Expenses) iii. After posting, subtotal each T-Account to show the balance in the account. C. Prepare a Trial balance. Please use a separate tab in Excel for this step. d. Prepare the financial statements for 2022 and include complete and proper headings on each. (Income Statement, Statement of Changes in Stockholders Equity, Balance Sheet and the Statement of Cash Flows)
