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Happy Harry Pets was incorporated on January 1st. The business maintains a retail pet store, providing gourmet dog food and treats, and also provides a
Happy Harry Pets was incorporated on January 1st. The business maintains a retail pet store, providing gourmet dog food and | |||||||||
treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding. | |||||||||
The following transactions occurred during the first twelve months of operations: | |||||||||
January 1st | Common stock is issued in exchange for cash in the amount of .. | 295,000 | |||||||
February 8th | The company purchases and pays for 160 units of gourmet dog food at a price of $25 per unit .. | 4,000 | |||||||
March 1st | The company pays cash for a one-year insurance policy in the amount of ..... | 9,300 | |||||||
March 31st | Rent on a retail space for 12 months is paid in the amount of ... | 12,480 | |||||||
April 1st | Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of | 18,000 | |||||||
April 10th | Grooming supplies purchased on the account in the amount of .. | 1,450 | |||||||
May 15th | The company purchases and pays for another 370 units of gourmet dog food at a price of $29 per unit .. | 10,730 | |||||||
May 30th | Grooming services are performed on the account in the amount of .. | 13,625 | |||||||
June 1st | The company pays for advertisements to be run for the next 12 months in the amount of . | 864 | |||||||
June 30th | The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 6%. | ||||||||
Interest is due on June 30th each year. The market rate is 8% on the date of issuance . | 100,000 | ||||||||
July 25th | Dog-walking services are performed on the account in the amount of ..... | 14,225 | |||||||
July 31st | 95 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using | ||||||||
the gross method in the amount of (see note c for cost flow assumptions) . | 6,650 | ||||||||
August 2nd | Boarding services are provided on the account in the amount of . | 6,280 | |||||||
August 6th | The company receives full payment from the customer for the July 31st sale | 6,517 | |||||||
September 15th | Pet sitting services are performed on the account in the amount of ..... | 6,245 | |||||||
September 29th | Customer payments are received for services previously provided in the amount of .. | 1,250 | |||||||
October 13th | 100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using | ||||||||
the gross method in the amount of . | 7,300 | ||||||||
October 29th | The company receives payment for half of the October 13th sale | 3,650 | |||||||
November 1st | Equipment originally purchased on April 1st for $2400 is sold for $2000 cash | ||||||||
November 15th | A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation | ||||||||
December 15th | The bookkeeper is paid $3,500 for the previous month's services | 3,500 | |||||||
Additional information: | |||||||||
a. | Grooming supplies on hand at the end of the month are as follows: . | 870 | |||||||
b. | The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts | ||||||||
is estimated as 4% of outstanding receivables at the end of the year | |||||||||
c. | The Company uses a perpetual inventory system and accounts for costs using the First-In-First-Out cost | ||||||||
flow assumption. On December 31st, a count of ending inventory reveals that there are 335 bags of dog | |||||||||
food on hand. | |||||||||
d. | All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statement. | ||||||||
e. | The effective interest method is used to amortize bond premiums and discounts | ||||||||
f. | Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest expense. | ||||||||
g. | The bookkeeper is paid a salary of $3,500 on the 15th of every month. | ||||||||
h. | The company declared dividends of $650 for the year | ||||||||
i. | Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation | ||||||||
and interest expense, are considered general & administrative. | |||||||||
REQUIRED: | |||||||||
1. | Prepare journal entries for each transaction listed above (with descriptions). | ||||||||
2. | Post journal entries to the general ledger accounts. | ||||||||
3. | Prepare an unadjusted trial balance. | ||||||||
4. | Prepare all necessary adjusting journal entries (with descriptions) | ||||||||
and post to the general ledger. | |||||||||
5. | Prepare an adjusted trial balance on December 31st. | ||||||||
6. | Prepare closing entries, post to the general ledger, and carryforward balances to January 1st of the next year. | ||||||||
7. | Prepare the following financial statements on December 31st (ignore income taxes): | ||||||||
a. Income Statement (multi-step, see Example 5.2 in the textbook) | |||||||||
b. Statement of Stockholders' Equity | |||||||||
c. Balance Sheet (classified) | |||||||||
d. Statement of Cash Flows (indirect method) | |||||||||
8. | Rename the excel file Lastname_PortfolioProject_Option2.xls and submit your completed project online. Please solve all the journal entries with descriptions,and adjusting journal entries. Thanks in advance |
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