Larry Looker is an avid hiker, and always wanted to combine his love of the outdoors with a way to earn a living. He decided that a way to do this would be to use llamas, which he raised as a hobby, to carry gear for hikers on long distance hikes in remote sections of northern Arizona that are not accessible by vehicle. This is a livery service, providing guaranteed transport and delivery of camping gear to the hikers final destination for each days hike.The fees charged will be based on a combination of the distance covered, the number of llamas required to carry the gear and the number of employees required to manage the llamas. Larry incorporated his new business on June 1, 2016 as Larrys Llama Livery Service, Inc. Larry has hired you to perform the accounting and record keeping for the business. He expects your work as an accounting professional to be neat and properly formatted.

You have established the following chart of accounts for Larrys Llama Livery, Inc.: ACCT # ACCOUNT TITLE ACCT # ACCOUNT TITLE 111 Cash 311 Common Stock 112 Accounts Receivable 312 Retained Earnings 113 Supplies 313 Dividends 114 Prepaid Insurance 314 Income Summary 141 Building 411 Service Revenue 142 Accumulated DepreciationBuilding 511 Wages Expense 143 Equipment 512 Advertising Expense 144 Accumulated DepreciationEquipment 513 Utilities Expense 211 Notes Payable 514 Supplies Expense 212 Accounts Payable 515 Insurance Expense 213 Wages Payable 521 Depreciation Expense 214 Unearned Service Revenue 531 Interest Expense 215 Interest Payable 532 Income Tax Expense 216 Income Taxes Payable

USE THESE ACCOUNT TITLES FOR YOUR JOURNAL ENTRIES!!! Accounting Cycle Assignment REQUIREMENTS (1) Prepare journal entries to record the June 2016 transactions listed on the following page (refer to the chart of accounts for the appropriate account titles to use). Leave a space after each entry! (2) Post the journal entries to the T-accounts and calculate the account balances. (3) Prepare an unadjusted trial balance. Check figure: Total Debits = $425,495. (4) Prepare adjusting journal entries in the general journal based on the following information (all AJEs are dated June 30): a) The building (barn and office space) has an estimated useful life of 25 years. Record depreciation for one month. b) The equipment has an estimated useful life of 7 years. Record depreciation for one month. c) Record insurance expired for one month. d) Supplies on hand at the end of June have a cost of $1,305. e) Accrue employee wages for 5 days from Monday June 24 through Friday June 28 (payroll is $5,500 for the two week pay period totaling 10 days for a Monday-Friday workweek). f) Accrue interest for June on the $234,000 Mountain High Bank note payable. The annual interest rate is 4%. g) As of the end of June, $1,365 of the services have been performed for customers for which payment had been received in advance on June 18. h) In June, entered into a contact with Barr & Associates, CPAs to provide gear transport services for the firms professionals. Larrys Llama Livery will bill Barr & Associates in the following month for services provided. Services totaling $1,100 were performed in June and will be billed in July 2016. i) Income taxes to accrue for June are estimated to be $1,855. (5) Post the adjusting entries to the T-accounts and calculate the account balances. (6) Prepare an adjusted trial balance. Check figure: Total Debits = $433,335. (7) Prepare the financial statements: a) Income Statement b) Statement of Retained Earnings c) Balance Sheet: (8) Prepare the closing entries in the general journal (all CJEs are dated June 30). (9) Post the closing entries to the T-accounts and calculate account balances.

Transactions: June 3 Larrys Llama Livery, Inc. sold 50,000 shares of $3 par value common stock for $150,000. 3 Found the perfect building with barn and office space in which to locate the business. Negotiated a price of $330,000; Larrys Llama Livery paid $96,000 in cash and signed a long term promissory note for the $234,000 remainder to Mountain High Bank. 4 Purchased equipment for the business for $21,420 on account (credit) from Llama Equipment Company. 4 Paid the $2,700 premium for a 1-year insurance policy. 5 Paid $850 for advertising in the Tree Tops Press Newspaper to run throughout the month. 6 Purchased $2,235 of supplies on account. 7 Paid $8,000 on account to Llama Equipment Company for the equipment purchased on June 4. 10 Employee wages are paid every two weeks on the Monday following the payroll period (Monday- Friday workweek). Paid employee wages of $5,760 for the payroll period ending June 7. 11 Gear transport services provided to customers on account totaled $7,950. 14 Gear transport services provided to customers for cash during the first half of June totaled $8,640. 18 Received $2,500 cash in advance (deposits) from customers for services to be performed in late June and early July. 21 Paid utility bills (water, electric, telephone) for the month totaling $870. 24 Received $3,680 from customers for payments on their accounts. 24 Paid employee wages of $5,890 for the payroll period ending June 21. 27 Gear transport services provided to customers for cash during the second half of June totaled $6,750. 28 Declared and paid cash dividends to the stockholders, $1,100.