REQUIRED: You will need to set up an accounting system for your business. Therefore, you will have to create/use a general journal, a general ledger, and subsidiary ledgers. You will be responsible for journalizing all transactions and posting them to the appropriate ledger accounts. At the end of each month, you will be required to prepare a trial balance. Additionally, you will be required to prepare year-end adjusting entries and an adjusted trial balance. You will also have to prepare a set of financial statements for Your Accounting Corporation. This will include, in proper format, an Income Statement, Statement of Retained Earnings, Balance Sheet, and a Statement of Cash Flows. After preparing your financial statements, you will also be required to record and post the closing entries and prepare a post-closing trial balance. You have selected a fiscal year that matches the calendar year. The following events occurred in August and September: 8/1 YOU filed a charter with the State of Louisiana to form the YOUR Accounting Corporation. The charter authorizes you to issue 5000 shares of $2 par common stock. The state charged you a $75 fee to file the charter. Since your business is not yet approved, you had to pay this fee using personal funds. 9/1 You received your charter from the State of Louisiana and officially opened your business. Your first order of business was to become a shareholder of YOUR Accounting Corp. To do this, you purchased 500 shares of common stock by issuing a check to YOUR Accounting Corp for $10,000. You used this money to open a checking account at First Funds Bank. 9/1 You rented an office for YOUR Accounting Corp. The monthly rent is $500, with the first months rent due immediately. You issue check #100 to Office Builders for the first months rent. 9/2 You then went to the Apple store and purchased a new computer system for your business. Your Mac Pro cost $2700 and your new printer cost $450. You set up a 30-day account with Apple to make this purchase. 9/3 You ordered business cards and stationary from Marketing Media. The order totaled $250 and will be shipped FOB Destination. (Record all purchases of supplies in the Supplies on Hand account). 9/4 You decided to purchase a new vehicle for your business. Upon visiting Pro-Auto, you decide on a new SUV at a cost of $55,000. This vehicle will be used 100% for business purposes. You finance the vehicle with Pig E Bank at a rate of 5% for 6 years. Your first monthly payment is due on October 4. NOTE: You will need to create a loan amortization schedule to determine the amount of the monthly note and the interest expense for each month. You can use a website such as www.bankrate.com to create the schedule. When recording your journal entries, round all amounts to the nearest dollar. 9/5 You went to the KEM Supply to purchase supplies for your business at a cost of $600. KEM opened a customer charge account for you. The payment terms on your account will be 2/10, net 30. The time period for determining the payment amount begins on the purchase date. 9/6 You purchased a one-year auto insurance policy from InsureMart for $1200. InsureMart will send you a bill for the policy. YOUR Accounting Corporation capitalizes all insurance policies on the date of purchase and records the necessary expense at year-end as an adjusting entry. 9/10 Your first client, Red Fische, came in today needing assistance with filing the appropriate paperwork to start his new seafood restaurant. You issued invoice #1 to Red Fische and he paid you an initial $2,000 Engagement Fee. Red Fische also agreed to contract with you to provide accounting services for $2,500 per month. 9/12 You issue check #101 to YOUR Accounting Corp to establish a $500 Petty Cash Fund. You will use this account to make small cash purchases. 9/12 You reimburse yourself for the filing fees associated with forming your corporation. 9/14 You paid KEM Supply by issuing check #102 9/15 You hire an administrative assistant, Mandi Handi, she will be paid a monthly salary of $1500. You have decided that all pay periods will end on the last day of the month and that checks will be issued on the 5th of each month. NOTE: Assume the following rates when preparing the payroll: federal income tax 15%, state income tax 5%, and FICA 7.65%. YOUR Accounting Corp. has state and federal unemployment insurance rates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages per employee. The employer FICA rate is 7.65%. 9/16 Marketing Media delivered your business cards and stationary. Check #103 was issued to pay for the supplies. 9/20 You visited a new client, Anita Cooke, to set up a Quickbooks accounting system for her new business, Cooking For You. You gave Anita and invoice #2 for the Engagement Fee and she paid you by issuing a check in the amount of $2,000. Anita also agreed to a monthly fee of $1,500 for you to handle her ongoing accounting needs. 9/22 You purchased $50 of fuel for your new SUV from Get n Go. You charged this to your Get n Go account. 9/30 Mandi sent pro-rated invoices, #3 & #4 , to Red Fische and Cooking For You for Monthly Accounting Services. The payment terms are 1/10, net 30. 9/30 You accrued interest on the Pig E. Bank note. Accrue interest based on the number of days in the month. 9/30 You computed and accrued the payroll for September. 9/30 You received monthly bills for the following: Max Power Company - $100, terms n/30 WaterWorks #1 - $20, terms n/30. The following events occurred in October: 10/1 You paid the monthly office rent of $500 by issuing check # 104. 10/2 You received and paid the bill from the Apple Store by issuing check #105. 10/4 You make the first monthly payment to Pig E Banks by issuing check #106. 10/5 Igotta Troubles came to your office looking for assistance with cleaning up her accounting problems. You agree to assist her and agree upon an Engagement Fee of $2,000 plus an hourly charge of $250 for Hourly Accounting Services to be billed on the 15th and 30th of each month with payment due in 15 days. Igotta writes you a check for the engagement fee in the amount of $2,000 in payment of invoice #5. 10/5 You issued check #107 to Mandi Handi for the September payroll. 10/7 You received a check from Red Fische in full payment of invoice #3. 10/9 You decide that it is time to purchase a business cell phone. You visit the Apple store and purchase an Iphone 7 for a total purchase price of $849. You pay for the phone by issuing check #108. 10/12 You issued check #109 to Max Power and check #110 to WaterWorks #1 in payment of September utility bills. 10/14 You sent invoice to #6 to Igotta Troubles for 25 hours of Hourly Accounting Services, terms 1/10, n30. 10/16 You paid the fuel bill from Get n Go for the fuel purchased on 9/22 by issuing check #111. 10/18 Ima Payne comes to you needing assistance with depositing the monthly payroll taxes for her business. You perform this service and hand her invoice #7 in the amount of $500 for Tax Services. Ima pays you in cash. 10/20 You received a check from Cooking For You in full payment of Invoice #4. 10/25 You Accounting Corp. declared and paid dividends of $4 per share to its shareholders of record. The dividends are paid by issuing check #112. 10/30 You sent the following invoices, terms 1/10, net 30: #8 to Igotta Troubles for 10 hours of Hourly Accounting Services #9 to Red Fische for Monthly Accounting Services, and #10 to Cooking For You for Monthly Accounting Services. 10/30 You accrued interest on the Pig E. Bank note. Accrue interest based on the number of days in the month. 10/30 You computed and accrued the payroll for October. 10/30 You received monthly bills for the following: Max Power Company - $200, terms n/30 WaterWorks #1 - $20, terms n/30 Great Coverage Cellular - $50, terms n/3 The following events occurred in November: 11/1 You purchase a 6-month liability insurance policy for YOUR Accounting Corp. by issuing check #113 in the amount of $300. YOUR Accounting Corporation capitalizes all insurance policies on the date of purchase and records the necessary expense at year-end as an adjusting entry. 11/1 You paid the monthly office rent of $500 by issuing check # 114. 11/2 You make the second monthly payment to Pig E Banks by issuing check #115. 11/04 You purchase breakfast for the office from Cooking For You. You pay for breakfast by taking $20 out of the petty cash fund. 11/05 You issue check #116 to Mandi Handi for the October payroll. 11/06 You receive a $4,000 check from Igotta Troubles. 11/07 You received full payment of invoice #10 from Cooking For You. 11/08 You issued check #117 to Max Power and check #118 to WaterWorks #1and check #119 to Great Cellular Coverage in payment of October utility bills and Telephone bill. 11/10 You contracted Signs R Us to design and fabricate a sign to place on your office to help advertise your business. Signs R Us gave you a bill totaling $600, payment is due upon delivery and installation of the sign. 11/12 You received full payment of invoice #9 from Red Fische. 11/15 You sent invoice #11 to Igotta Trouble for 15 hours of Hourly Accounting Services. 11/18 Ima Payne walks into your office needing assistance with Quickbooks Online. You pull up her business and fix her problems. You issue invoice #12 to Ima for 4 hours of Hourly Accounting Services. Ima pays you $1,000 in cash. 11/25 You remitted payment to the U.S Treasury for the federal income taxes, FICA taxes and FUTA taxes related to the September payroll (check #120). In addition, you remitted payment to the Louisiana Department of Revenue (check #121) for the state income taxes and SUTA taxes related to the September payroll. 11/30 You sent the following invoices, terms 1/10, net 30: #13 to Igotta Troubles for 12 hours of Hourly Accounting Services #14 to Red Fische for Monthly Accounting Services, and #15 to Cooking For You for Monthly Accounting Services. 11/30 You accrued interest on the Pig E. Bank note. Accrue interest based on the number of days in the month. 11/30 You computed and accrued the payroll for November. 11/30 You received monthly bills for the following: Max Power Company - $150, terms n/30 WaterWorks #1 - $20, terms n/30 Great Coverage Cellular - $50, terms n/30. The following events occurred in December: 12/1 You paid the monthly office rent of $500 by issuing check # 122. 12/2 You make the third monthly payment to Pig E Banks by issuing check #123. 12/04 You purchase $100 of postage stamps and make payment from the petty cash account. 12/05 You issue check #124 to Mandi Handi for the November payroll. 12/09 You received the following checks in the mail: Check #1212 from Igotta Troubles in the amount of $4,000 Check #809 from Red Fische in the amount of $2,475 Check #2569 from Cooking For You in the amount of $1485. 12/12 You remitted payment to the U.S Treasury for the federal income taxes, FICA taxes and FUTA taxes related to the September payroll (check #125). In addition, you remitted payment to the Louisiana Department of Revenue (check #126) for the state income taxes and SUTA taxes related to the October payroll. 12/15 You send invoice #16 to Igotta Troubles for 10 hours of Hourly Accounting Services. 12/20 Ima Payne is back and needs assistance filing Federal Tax Form 990 for her business. You perform this service and hand her invoice #17 in the amount of $500 for Tax Services. Ima pays you in cash. 12/22 You receive a check in the amount of $5,000 from Igotta Troubles. 12/24 You purchased gift cards from Eatin Moore Grocers, to give as Christmas gifts to your clients. Eatin Moore charged your account in the amount of $1000 and gave you the bill. 12/30 You sent the following invoices, terms 1/10, net 30: #18 to Igotta Troubles for 10 hours of Hourly Accounting Services #19 to Red Fische for Monthly Accounting Services, and #20 to Cooking For You for Monthly Accounting Services. 12/30 You accrued interest on the Pig E. Bank note. Accrue interest based on the number of days in the month. 12/30 You computed and accrued the payroll for December. In addition to paying the regular monthly salary to Mandi Handi, you also authorize a Chrsitmas bonus of $500 for Mandi and $10,000 for yourself. 12/30 You received monthly bills for the following: Max Power Company - $170, terms n/30 WaterWorks #1 - $20, terms n/30 Great Coverage Cellular - $50, terms n/30 Journalize the following year-end adjusting entries: 12/31 Journalize the depreciation expense for all Property, Plant and Equipment. Information related to all assets is shown in the table below: Equipment Life Method Salvage Value Computer & Printer 5-year Straight-line $100 Cell Phone 3-year Straight-line $50 SUV 5-year Straight-line $1,500 YOUR Accounting Corporation computes depreciation using a month convention and rounds all depreciation amounts to the nearest dollar. 12/31 Calculate the amount of the Long-Term Note Payable to Pig E. Bank that will come due in the next fiscal year. Prepare a journal entry to reclassify this amount as Current Maturities of Long-Term Debt. 12/31 Calculate the amount of the prepaid insurance that has expired during the year. Prepare the appropriate adjusting entry. 12/31 A physical count of the supplies on hand indicates that you have $150 of supplies remaining. YOUR Accounting Corporation PRACTICE SET (For the Months of September, October, November, & December) You are required to: Assignment #1: For the Month of September (4 points) In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts. Post the journal entries for the month to the general ledger accounts, use appropriate posting references. Prepare a trial balance for the period ending September 30. Using proper format, create your trial balance in Microsoft Excel. Do not use any trial balance templates. Include all accounts from the chart of accounts. Even those with zero balances. Your accounts in the trial balance should be in the exact order shown in the chart of accounts. Submit the trial balance in Moodle. Retain your general journals and ledgers until you have completed assignment #7. Assignment #2: For the Month of October (4 points) In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts. Post the journal entries for the month to the general ledger accounts, use appropriate posting references. Prepare a trial balance at the end of the period ending October 30. Using proper format, create your trial balance in Microsoft Excel. Do not use any trial balance templates. Include all accounts from the chart of accounts. Even those with zero balances. Your accounts in the trial balance should be in the exact order shown in the chart of accounts. Submit the trial balance in Moodle. Retain your general journals and ledgers until you have completed assignment #7. Assignment #3: For the Month of November (4 points) In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts. Post the journal entries for the month to the general ledger accounts, use appropriate posting references. Prepare a trial balance at the end of the period ending November 30. Using proper format, create your trial balance in Microsoft Excel. Do not use any trial balance templates. Include all accounts from the chart of accounts. Even those with zero balances. Your accounts in the trial balance should be in the exact order shown in the chart of accounts. Submit the trial balance in Moodle Retain your general journals and ledgers until you have completed assignment #7. Assignment #4: For the Month of December (4 points) In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts. Post the journal entries for the month to the general ledger accounts, use appropriate posting references. Prepare a trial balance at the end of the period ending December 30. Using proper format, create your trial balance in Microsoft Excel. Do not use any trial balance templates. Include all accounts from the chart of accounts. Even those with zero balances. Your accounts in the trial balance should be in the exact order shown in the chart of accounts. Submit the trial balance in Moodle. Retain your general journals and ledgers until you have completed assignment #7. Assignment #5: Year-end Adjusting Entries (4 points) In proper General Journal format, record the year-end adjusting entries; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts. Post the journal entries for the month to the general ledger accounts, use appropriate posting references. Prepare an adjusted trial balance for the period ending December 31. Using proper format, create your trial balance in Microsoft Excel. Do not use any trial balance templates. Include all accounts from the chart of accounts. Even those with zero balances. Your accounts in the trial balance should be in the exact order shown in the chart of accounts. Submit the trial balance in Moodle. Retain your general journals and ledgers until you have completed assignment #7. Assignment #6: Financial Statements (10 points) Prepare Year-End Financial Statements for YOUR Accounting Corporation. This includes the Income Statement, Statement of Retained Earnings, and Balance Sheet. Using proper format, create your financial statements in Microsoft Excel. Do Not Use templates in the preparation of your financial statements. Submit the financial statements in Moodle. Assignment #7: Closing Entries (10 points) In proper General Journal format prepare the closing entries for YOUR Accounting Corporation. Post the closing entries to the General Ledger Accounts, use appropriate posting references. Prepare a post-closing trial balance. Using proper format, create your post-closing trial balance in Microsoft Excel. Submit the post-closing trial balance in Moodle. Submit your general journals and general ledgers in class. CHART OF ACCOUNTS Cash 105 Petty Cash 107 Accounts Receivable 110 Supplies on Hand 130 Prepaid Insurance 140 Computer Equipment 220 Accumulated Depreciation Computer Equipment 221 Cell Phone 230 Accumulated Depreciation Cell Phone 231 Vehicles 240 Accumulated Depreciation - Vehicles 241 Accounts Payable 310 Customer Deposits (Unearned Revenue) 320 SUTA Payable 330 FICA Payable 332 FUTA Payable 334 Federal Income Tax Payable 336 State Income Tax Payable 338 Current Maturities of Long-Term Debt 375 Notes Payable (long-term) 410 Interest Payable 420 Salaries Payable 425 Common Stock ($2 par value) 520 Additional Paid-in Capital on Common Stock 521 Retained Earnings 550 Dividends 560 Engagement fees 605 Monthly Accounting Services Revenue 610 Hourly Accounting Services Revenue 620 Tax Services Revenues 612 Sales Discounts 614 Advertising & Promotion Expense 725 Depreciation Expense 727 Rent Expense 730 Insurance Expense 735 Supplies Expense 740 Meals & Entertainment 745 Taxes and Licenses 767 Telephone Expense 770 Utilities Expense 775 Fuel Expense 780 Interest Expense 820 Payroll Tax Expense 825 Salaries Expense 830 Income Summay 900