Problem #1 Instructions

OBJECTIVE: This problem is designed to take you through the entire accounting cycle from analyzing transactions to the post-closing trial balance.

BACKGROUND: Cougar Hotel opened on January 1, 20x2. The hotel operates on a calendar year and is in the current month ending December 31, 20x8. The accounting department will be closing the books on Dec 31. Observing GAAP, accrual basis of accounting is used. Below is the chart of accounts for Cougar Hotel and the balances can also be found in the Ledger.

CHART OF ACCOUNTS
100	CASH				400	ROOM REVENUE
110	ACCOUNTS RECEIVABLE				410	FOOD REVENUE
120	PREPAID INSURANCE				500	COST OF SALES--FOOD
130	INVENTORY--FOOD				600	PAYROLL EXPENSE
140	EQUIPMENT--KITCHEN				700	MENU EXPENSE
145	ACCUM.DEPRECIATIONEQUIP.				710	INSURANCE EXPENSE
200	ACCOUNTS PAYABLE				720	UTILITY EXPENSE
205	UTILITIES PAYABLE				725	DEPRECIATION EXPENSE
208	PAYROLL PAYABLE
210	UNEARNED REVENUE
300	COMMON STOCK
310	DIVIDENDS
390	RETAINED EARNINGS

391 INCOME SUMMARY

A CREDIT BALANCE IN THE ACCOUNTS IS NOTED BY A SET OF PARENTHESES, e.g., Accounts Payable has a credit balance of $21,900 and thus it appears as (21,900.00) in the ledger.

STEPS TO ACCOMPLISH:

Step 1. Analyze the given transactions and journalize them onto page 1 of the General Journal

Step 2. Post the transactions into the General Ledger. Use GJ1 to denote general journal page 1.

Step 3. Fill out the Trial Balance in the work sheet

Step 4. Journalize the given adjustments onto page 2 of the General Journal and post them to the General Ledger. Use GJ2 to denote general journal page 2.

Step 5. Fill out the entire Worksheet

Step 6. Complete the Financial Statements: Income Statement, Statement of Retained Earnings, and Balance Sheet

Step 7. Journalize the Closing Entries onto page 3 of the General Journal and post them to the General Ledger. Use GJ3 to denote general journal page 3.

Step 8. Complete the Post-closing Trial Balance

TRANSACTIONS:

Dec 1 The controller purchased a twelve-month insurance policy on Dec 1 which will cover the hotel until November 30 of the following year. The cost was $5,700.

Dec 2 The hotels bought some new kitchen equipment to replace some old equipment. The total cost was $80,000 and they are supposed to have a useful life of 10 years with a salvage value of $2,000. This was charged with Ace Kitchen Supply.

Dec 5 The restaurant manager bought some menus worth $900 from Houston Graphics. She picked up the menus on her way into work and gave the controller the invoice. The invoice is not due until January. These are going to be used right away, as they are for the Christmas Eve special event.

Dec 8 Cougar Hotel bought food inventory of $7,500 on a charge account with U.S. Foods.

Dec 20 Science Academy held its Christmas party at Cougar Hotel. The total for food was $12,000 and the controller billed Science Academy.

Dec 21 Science Academy was very pleased with the event yesterday and sent in a check of $5,000 as deposit for next years party.

Dec 21 Mansfield Accounting Corp. held its annual meeting and retreat at Cougar Hotel and the group checked out this morning. The total rooms revenue was $48,000 and food revenue was $12,000, the group paid it in full with cash.

Dec 27 Paid payroll of $12,750 to employees.

Dec 28 Paid 25% of what is owed to Houston Supplies, and 75% owed to U.S. Foods.

ADJUSTMENTS: At the end of the month, the following adjustments need to be recorded

1. A physical food inventory was taken and $1,500 of food remains in the storerooms.
2. Depreciation of the equipment needs to be recognized.
3. The insurance used needs to be adjusted.
4. The hotel used $2,750 in utilities but have not paid Center Point Energy.
5. A New Year Eves Party for Lancer Ltd. was held on Dec 31. The total invoice of $11,100 for food needs to be billed.
6. The last pay day was the 28^th and Cougar Hotel pays its employees every two weeks. Ten employees with wages totaling $250 per person per day needs to be accrued.

I NEED HELP JOURNALIZING THESE TRANSACTIONS THAT IS ALL ONE STEP...