Scenario

You have just been hired to the Senior Accountant position for Fitchtown, Inc. During your first month in your new role, you will be completing a full accounting cycle for the month. You are the supervision Pat Simons (bookkeeper), and you request to review the work since you are new to the position and not familiar with Pat's abilities.

Directions

For this project, you will be using the Excel workbook provided in week 1's tab.

Deliverable items for the Portfolio Project will be required at different points during the course as indicated in the table above.

Fitchtown Inc.
Post Closing Trial Balance
April 30, 20XX
					Debit	Credit
Cash					$78,791
Accounts receivable				18,495
Merchandise inventory				85,221
Store Supplies				2050
Office Supplies				1885
Prepaid Insurance				1659
Office equipment				2500
Accumulated depreciation-Office Equipment			$658
Store equipment				16580
Accumulated depreciation-Store Equipment			2,268
Accounts Payable						50,921
Common Stock, 20,000 shares $1 par					20,000
Paid-in-Capital, Excess of Par						35,000
Retained Earnings						98,334
Totals					$207,181	$207,181

Journal Entries and T Accounts

To get you started in your new role, Pat Simons has asked you to review necessary journal entries (JEs) and T account postings for the following transactions, which occurred in the month just ended. Use a perpetual inventory system. The debits and credits should equal and the entries should have proper impact on the accounts that are being used. The journal entries should be written in proper format. The accounts should not be abbreviated. Ensure that the entries are properly formatted with the names of the credited accounts indented and the proper description shown. Review the associated T accounts and ensure that the journal entries are properly posted to the T accounts. During this week, you are correcting any errors in the journal entries and T account postings.Please use the provided Excel spreadsheet to review the journal entries, T account postings, correct any errors and submit the corrected spreadsheet to BlackBoard. You are not creating correcting entries, you are changing (correcting) the entries that Pat created.

All the accounts that should be used during this project have a T account, if there is no T account, do not create one.

Fitchtown, Inc. operates with monthly accounting periods. All of the company's accounting work is completed through the end of April, and its ledgers show April 30 balances. Terms for all credit sales are 2/10, n/30, unless otherwise stated.

May	1	Issued Check No. 3410 to Q&R Management Co. in payment of the May rent, $3,710. (Use two lines to record the transaction. Charge 80% of the rent to Rent ExpenseSelling Space and the balance to Rent ExpenseOffice Space.)
	2	Sold merchandise on credit to Cole Company, Invoice No. 8785, for $6,100 (cost is $4,100).
	2	Issued a $175 credit memorandum to Mercer Co. for defective (worthless) merchandise sold on April 28 and returned for credit. The total selling price (gross) was $4,725. NOTE: The $175 is the amount to credit and is the 100% amount of the item returned.
	3	Received a $798 credit memorandum from Preston Products for the return of merchandise purchased on April 29.
	4	Purchased the following on credit from Davis Supply Co.: merchandise, $37,072; store supplies, $574; and office supplies, $83. Invoice dated May 4, terms n/10 EOM.
	5	Received payment from Mercer Co. for the balance from the April 28 sale less the May 2 return and the discount.
	8	Issued Check No. 3411 to Preston Products to pay for the $7,098 of merchandise purchased on April 29 less the May 3 return and a 2% discount.
	9	Sold store supplies to the merchant next door at their cost of $350 cash.
	10	Purchased $4,074 of office equipment on credit from Davis Supply Co., invoice dated May 10, terms n/10 EOM.
	11	Received payment from Cole Company for the May 2 sale less the discount.
	11	Purchased $8,800 of merchandise from Henley, Inc., invoice dated May 10, terms 2/10, n/30.
	12	Received an $854 credit memorandum from Davis Supply Co. for the return of defective office equipment received on May 10.
	15	Issued Check No. 3412, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. Cashed the check and paid the employees.
	15	Cash sales for the first half of the month are $70,220 (cost is $38,200). (Cash sales are recorded daily but are recorded only twice here to reduce repetitive entries.)
	16	Sold merchandise on credit to Cole Company, Invoice No. 8786, for $3,990 (cost is $1,890).
	17	Purchased $13,650 of merchandise from Summit Corp., invoice dated May 14, terms 2/10, n/60.
	19	Issued Check No. 3413 to Henley, Inc., in payment of its May 10 invoice less the discount.
	22	Sold merchandise to Crane Services, Invoice No. 8787, for $6,850 (cost is $4,990), terms 2/10, n/60.
	23	Issued Check No. 3414 to Summit Corp. in payment of its May 14 invoice less the discount.
	24	Purchased the following on credit from Davis Supply Co.: merchandise, $8,120; store supplies, $630; and office supplies, $280. Invoice dated May 24, terms n/10 EOM.
	25	Purchased $3,080 of merchandise from Preston Products, invoice dated May 23, terms 2/10, n/30.
	26	Sold merchandise on credit to Crank Corp., Invoice No. 8788, for $14,210 (cost is $8,230).
	26	Issued Check No. 3415 to Perennial Power in payment of the May electric bill, $1,283.
	29	The company voted to issue and pay dividends today, in the amount of $7.000.
	30	Received payment from Crane Services for the May 22 sale less the discount.
	30	Issued Check No. 3417, payable to Payroll, in payment of sales salaries, $5,320, and office salaries, $3,150. Cashed the check and paid the employees.
	31	Cash sales for the last half of the month are $66,052 (cost is $42,500).

Trial Balance and Adjustments

Using the information from the Excel workbook from Week 2's graded submission, Pat completed a worksheet using the following information for accounting adjustments.

Review the completed the columns for the below adjusting entries, income statement, and balance sheet.

1. Expired insurance, $800.
2. Ending store supplies inventory, $2,526.
3. Ending office supplies inventory, $669.
4. Depreciation of store equipment, $532.
5. Depreciation of office equipment, $380.

Financial Statements and Closing Entries Complete this assignment using the same Excel workbook provided (add any necessary additional lines), and submit your work.

Now that you have reviewed and corrected most of the steps in the accounting cycle, it is time to complete the cycle with the last steps. This week, you are toprepare the multiple-step income statement, statement of changes in shareholders' equity, and classified balance sheet. Prepare the closing entries and the post-closing trial balance. You should use the corrected information completed in prior weeks.

Prepare the income statement, where net income will be carried through to the statement of changes in shareholders' equity as one of the adjustments to the final balance in the equity account. You will then need to prepare the balance sheet, where you will show the updated shareholders' equity balances.

• Prepare a May (xxxx) multiple-step income statement, a May (xxxx) statement of changes to shareholders' equity, and a May 31, (xxxx), classified balance sheet. Note the corporation has authorized 100,000 shares at $1.00 par value.
• Prepare the closing entries and prepare a post-closing trial balance