1) Project 1 Instructions (this document file)-requirements of the project. 2) Cycles processes and other information...

  
 
 
 
 
 
 
 
 
 
 
 

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1) Project 1 Instructions (this document file)-requirements of the project. 2) Cycles processes and other information (document file) - description of what needs to be done for each process, list of internal people involved, freight information, list of inventory items with sell price and costs (our purchase price), vendor list, and customer list. 3) Journals (excel file) - Special Journals and General Journal. (Turn this in) NOTE: this excel file contains 3 worksheets A. Special Journals Revenue - Sales and Cash Receipts B. Special Journals Expenditure-Purchases and Cash Disbursements C. General Journal. 4) Ledgers (excel file)-(Turn this in) NOTE: this excel file contains 5 worksheets A. General Ledger (on 3 worksheets) B. Accounts Receivable Subsidiary Ledger C. Accounts Payable Subsidiary Ledger. 5) Revenue Cycle blank forms (excel file)- this file contains blank forms for the Revenue Cycle. (Note: Some of these forms will have duplicate copies to facilitate the sharing of information.) NOTE: this excel file contains 4 worksheets A. Sales Order, B. Packing Slip and Shipping Notice C. Bill of Ladings, D. Invoices 6) Expenditure cycle blank forms (excel file)- this file contains blank forms for the Expenditure Cycle. (Note: Some of these forms will have duplicate copies to facilitate the sharing of information.) NOTE: this excel file contains 3 worksheets A. Purchase Orders, B. Receiving Reports, C. Checks 7) Documents in process (pdf file) - this file contains some of the documents already processed by the company in events that took place prior to December 12 or will come from outsiders later. You will need these to complete the steps for some of the events. The events below will tell you which ones will be used. It is best to file them where they would be in the business and get them A when needed. Create the folders on the next page and then file them as below (Note they will move to other folders as you go through the events. Pages 1, 2 and 3 should be in the Cashier Folder. They have been matched (3-way match) together as a package and waiting to be paid. Page 4 should be in the Receiving Department - Temporary folder. Pages, 5, 6, and 7 should be in the AP Unmatched folder. 8) Report Formats (Turn this in) - Make sure you complete the Unadjusted Trial Balance and AR Aging Report after part A, and the Adjusted Trial Balance, Income Statement (with the Statement of Retained Earnings) and the Balance Sheet. 9) Check figures. 10) Documents Work Sheet (Turn this in) Before getting started As part of this project, you will be processing and storing documents/information for many departments. These departments have multiple files that they keep for filing documents. Before you get started you will need to make the following files: If you do not want to buy files, it is OK to fold a piece of paper in half and write the file name on the paper. Or you can get a three-ring binder and separate it with the required sections. You will need the 12 files listed below (Note: at the end of the project one of the files will be empty). Reporting Control Department Reports-reports (financial statements and AR aging) Control Department Journals and Ledgers-journals, ledgers Common Sent to outsiders (bank, customer, carrier) and Other stuff (for anything else if needed) Revenue/Sales Cycle Billing Department -Open Sales Order (NOTE: when complete this one will be empty) Billing Department-Invoices (with Sales Order and Bill of Lading) Accounts Receivables Department - unpaid invoices Accounts Receivables Department - customer files of paid invoices Expenditure Cycle Accounts Payable unmatched receiving, purchase order, and invoice file. Accounts Payables vendor files (for paid matched invoices) Receiving department - temporary file Receiving department - permanent file Cashier- unpaid file (3-way match) PART A-Recording Transactions One Time Hits Electronic Company buys and sells DVD players, VHS players, and Phonographs. They use the periodic inventory method to record cost of goods sold. This means that all purchases of inventory will be recorded to purchases, not inventory, and that cost of goods sold will be recorded with the adjusting entries, not for each shipment. Following are a list of events for 2003. You are responsible for completing the documents related to these events (from the revenue and expenditure cycles), recording the transactions, if required, in the special journals, posting these to the ledgers (general ledger and subsidiary ledger when applicable), and prepare some reports. As part of this assignment, you will take on the many roles of the individuals from the different departments that are responsible for the transactions. Events: (See Events 1 and 2 video for help with the first two transactions) Dec. 12: Received Customer order 2011 from Shawn Patrick. It was for a total of $1,950. They ordered 10 DVD40s ($80 each), 20 DVD30s ($50 each), and 5 VHS30 ($30 each). They would like these goods on December 19. Please Process Sales Order #1200. (but do not ship the goods). This is Revenue Cycle Step 1. Dec. 13: Received approved requisition form from Operations requesting the purchase of 20 DVD Players-Basic and 25 DVD Players-Premium. These items will be purchased from 3DN Inc with an expected delivery date of Dec 30. Issue P.O. Number 358. Expenditure Cycle Step 1. Dec 16: Paid amount due ($750) to Abbey Roads Inc. for Purchase Order Number 320. Issue check number 154. (Note: the supporting documents were included in the Documents in Process file, which you should have put in the cashier folder. You will need: a) invoice from Abbey Roads Inc, b) PO 320 (accounts payable copy) and c) receiving report. You will process the check. This is Expenditure Cycle Step 4. Dec. 17: Received all of the product promotion pamphlets purchased for the marketing department. The purchase order (P.O.) was 356. The receiving department verified that all 1,000 pamphlets were there and in good condition. The pamphlets were sent to the marketing department. Use receiving number 121. (Note: from Documents in process, you will need: PO 356 receiving department copy which you should have put in the Receiving Department- temporary folder) This is Expenditure Cycle Step 2. Dec 18: Accounts Payable received invoice from Beach Bum Inc. for the promotion pamphlets ordered on P.O. 356. Record these as Promotion and advertising expense (account = 50300). (Note: from Documents in process, you will need: Invoice#488 from Beach Bum and PO 356 which are in accounts payable unmatched folder). (Note: this is not inventory. This is for account 50300-Promotion and Advertising Expense and will go in the other column) Dec. 20: Received approved requisition form from the Accounting Department requesting the purchase of 10 Pads of Columnar Paper (cost $5 each), 2 Printer Toners ($70 each), and 2 boxes of copy paper ($20 each). These items will be purchased from Highway Suppliers with an expected delivery date of January 3, 2004. Issue P.O. Number 359. Dec 19: Shipped the goods for Sales Order number 1200. Please process the required documents Dec 19: Shipped the goods for Sales Order number 1200. Please process the required documents and prepare packing slip/Shipping Notice # 1305, bill of lading#1305 and invoice # 1649. DO NOT include freight on the invoice. Dec. 21: Received Customer order 15666 from Tiny Tim's. It was for a total of $850. They ordered 5 DVD40s ($80 each) and 15 PHN10s ($30 each). They would like these goods shipped on December 31. Please Process Sales Order #1201. (but do not ship the goods). Dec. 27. Pay amount due to Beach Bum Inc for PO number 356. Use check 155. Dec 29: Received notification from the bank they received payment (check 899) from Shawn Patrick for invoice#1649. (Use the customer copy for the Remittance Advice sent by the bank). Dec 30: Received inventory from 3DN Inc. for Purchase Order Number 358. All items ordered were received in good condition (20 DVD Players Basic and 25 DVD Players-Premium). These items were delivered to the warehouse. Use receiving number 122. Dec 31: Received invoice from 3DN for PO number 358. (from Documents in process you will Customer Invoice from 3DN which you should find in the Accounts Payable -Unmatched folder.) Dec 31: Shipped the goods for Sales Order number 1201. Please process the required documents and prepare packing slip/Shipping Notice # 1306, bill of lading#1306 and issue invoice # 1650. DO NOT include freight on the invoice. Required: 1) For each of the above events, complete the documents, file them in the appropriate file and record the transactions, if required, in the correct special journals. You need to file the documents as you go through each event because some of them move around. (Hint: Do not use the general ioural for these entries For this proiect the general innrnal will only be used for adisting Required: 1) For each of the above events, complete the documents, file them in the appropriate file and record the transactions, if required, in the correct special journals. You need to file the documents as you go through each event because some of them move around. (Hint: Do not use the general journal for these entries. For this project, the general joumal will only be used for adjusting entries in Part B). Post the information to the subsidiary ledgers (where applicable-see note 4)) but not to the general ledger. The posting to the general ledger of the daily events will be done in the next requirement. NOTE 1: Not all of the events require entries in the journals. For example, the processing of a sales order (Dec. 12) is not an economic event (it will lead to one in the future) and thus no accounting entry is required for this event. To determine what need to be done, for each event identify the event as one of the events on the Cycle Processes and follow the steps. You need to prepare the documents and process them as you do an event. You can not do them at the end. For the first 4, the Cycle Processes step has been identified for you. NOTE 2: Do not use the general journal for the entries in this part. For this project, the general journal will only be used for adjusting entries in part B. NOTE 3: Blank Forms needed for processing are included on the excel spread sheets (Revenue Cycle Forms and Expenditure Cycle Forms). The revenue forms include sales orders, bill of ladings, and invoices. They need to be single-sided (Please DO NOT PRINT THEM DOUBLE-SIDED.) The expenditure forms include purchase orders, receiving reports, and checks. Some of these forms are multi-copies. Some of the copies (marked N/A) will not be required. Please complete all required copies of the forms. (To help you, the copies have been linked to the first copy. If you input information on the first copy it will be duplicated on the other copies). You need to print these out and process them according. Please see the Cycles processes document for narratives on the process. For this project you will complete each type of form twice (that means you will have to print out 2 sets of each form). Note 4: Posting to the subsidiary ledger: For every transaction recorded in the special journals that involves accounts receivables or accounts payables, when you record the transaction in the special journal don't forget to update the accounts payable or accounts receivable subsidiary ledger. Don't post to the general ledger until the end of the period which will be done in step 2. You should look at the transaction processing notes for information to help with posting to ledgers. 2) Post the information to the general ledger (where applicable). (Hint: Don't forget to include the transactions from Dec. 1-15 that are already included on the special journals. See our Transaction Processing Lecture Notes for more detail. Note 5: Posting to the general ledger. At month end, for each special journal, draw a single line in each column (for totaling) at the bottom of the line for the last transaction. Then skip one row on the special journal and write December Totals in the description column. Total each column (including the 'Other' column) and write the total for each column. Note that the transactions from December 1-15 need to be included in the totals. Cross-foot the special journal (add the totals for the debits and credits and make sure they equal) and then draw double lines under each column total. For each special column (except for the other column), post the total to the correct account in the general ledger. Write the total of the special journal column in proper account and complete the balance. Don't forget to put a checkmark under the column total of the special journal when you have finished posting For the other column you can not post the total. Instead post each item in this column to the general ledger. When complete put a check in the column next to the amount. 3) Prepare a pre-adjusting entry trial balance. 4) Prepare an A/R aging report showing the customer balances and the ages of those balances (customers down the side, current-30, 30-60, 60-90, >90 days across). Part B (Adjusting Entries and Reporting) The end of the year (2003) has come, and all of the routine transactions have been processed. One Time Hit's new accountant hired from Worldcom is in the process of trying to complete the year-end process. He needs to complete the adjusting entries, as well as the financial statements. At his previous company, they would just make up entries that would make the company look better, so the accountant is not sure what to do. He has hired you to help him with his work. Adjusting Entries: Prepare the correct adjusting entries using the following information. 1) The warehouse employees counted the ending inventory on hand at December 31, 2003. Their ending inventory balance is $40,000. (Remember we are using the periodic inventory method.) 2) The supplies department counted the supplies on hand. The balance of supplies at December 31 is $500. 3) The note payable is due in 5 years and was initiated on April 1, 2003. The note payable requires annual interest payments of 11% payable on March 31 of each year. Round to the nearest dollar. (Note: I used 275 days out of 365 to prorate the interest expense on the note payable) 4) The company has estimated that bad debt expense is equal to one half of a percent (.005) of net sales (sales less sales discounts and returns). 5) December salaries and wages will be paid on January 5, 2004. December salaries and wages are $6,000. 6) Two of the fixed assets have not been completely depreciated. These two items are a mainframe computer purchased for $20,000 in 2002 and a personal computer purchased in the current year on October 1, 2003 for $3,000. Computers are depreciated using the straight-line method over 3 years. The salvage value is 0. 7) The company's income tax rate is 15%. Round to the nearest dollar. (For taxes most companies complete the other adjusting entries and then post them to the GL. Then prepare a preliminary income statement and calculate the taxes. Then they can make the adjusting entry for taxes and post to the general ledger). Instructions: 1) Prepare the adjusting entries for December 31, 2003. These entries should be recorded in the Instructions: 1) Prepare the adjusting entries for December 31, 2003. These entries should be recorded in the general journal. Provide any necessary calculations to support your entries. Note: Don't forget to put the income tax adjusting journal entry in the general journal and post it to the general ledger. 2) Post these entries to the General Ledger and prepare a trial balance. 3) Prepare the classified balance sheet and the multi-step format income statement, and statement of retained earnings (or the statement of retained earnings can be included at the end of the income statement). The statement of cash flows is not required. You do not need to do Closing Entries When completed The project should be organized in a notebook or in folders (hard copy or electronic). 1) Control Department Reports. For this folder, put the reports in the following order: Income Statement, Statement of Retained Earnings, Balance Sheet, Pre-adjusting entry trial balance, Post adjusting entry trial balance and Accounts Receivable Aging 2) Control Department Journals and Ledgers. For this folder, put the journals and ledgers in the following order: Special Journals, General Journal, Accounts Receivable Subsidiary Ledger. Accounts Payable Subsidiary Ledger and General Ledgers (assets, habilities and equity, and revenue and expenses) 3) The other folders in the order listed above. Note that the Billing Department -Open Sales Order folder is empty When completed The project should be organized in a notebook or in folders (hard copy or electronic). 1) Control Department Reports. For this folder, put the reports in the following order: Income Statement, Statement of Retained Earnings, Balance Sheet, Pre-adjusting entry trial balance, Post adjusting entry trial balance and Accounts Receivable Aging. 2) Control Department Journals and Ledgers. For this folder, put the journals and ledgers in the following order: Special Journals, General Journal, Accounts Receivable Subsidiary Ledger, Accounts Payable Subsidiary Ledger and General Ledgers (assets, liabilities and equity, and revenue and expenses). 3) The other folders in the order listed above. Note that the Billing Department -Open Sales Order folder is empty. To Turn In. You will turn in 3 excel files and one word document on Canvas (upload to Project 1 in Assignments: 1. Upload the excel spreadsheets with your Reports Unadjusted Trial Balance, and Accounts Receivable Aging Report, Adjusted Trial Balance and Financial Statements (a. Income Statement and Retained Earnings, b. Balance Sheet). 2. Upload the excel spreadsheets with your Special Journals (Sales Journal, Cash Receipts Journal, Purchase Journal, Cash Disbursements Journal) and the General Journal. 3. Upload your excel spreadsheets with the General Ledger, Accounts Receivable Ledger, and Accounts Payable Ledger. 4. Upload the Documents Work Sheet (word document). A B C 1 Special Journals - Revenue Cycle 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SABERN22222 17 18 19 20 21 23 24 25 26 DATE 2-Dec 5-Dec DESCRIPTION Tiny Tim-check 788 Smarts-Check 567 DATE DESCRIPTION Who Cares 6-Dec Ready CTRL Special Journals Revenue INV # D SALES JOURNAL 1648 DEBIT CASH G/L 10100 17,619 7,450 CASH RECEIPTS JOURNAL SUB. # E 888 SALE DISC. GL 30300 F Special Journals Expenditure SUB, # DEBIT ACCT. REC. G/L 10200 SUB POST 10,000 X 444 999 G A/R-G/L. 10200 AMOUNT CREDIT SALES GAL 30100 SUB POST 17,619 X 7,450 X 10,000 H General Journals Sheet1 CREDIT J OTHER G/L ACCOUNTS A/CH K AMOUNT POST REF CAKHST8888 15 16 17 18 19 20 21 22 88588 36 37 A 38 DESCRIPTION 39 40 DATE 6-Dec Who Cares C 33 34 Note 2: Posting to the general Ledger is done at Month end 35 SALES JOURNAL D INV # 1648 Special Journals Revenue SUB. # 888 E 23 24 25 26 27 28 29 30 31 32 Note 1: Posting to the subsidary ledger (AR Subsidiary Ledger for Rev. Cycle) is done on an ongoing basis. After posting to the subsidary ledger put a check in the SUB POST column to show posting was completed Ti F DEBIT ACCT. REC. G/L 10200 SUB POST 10,000 X Special Journals Expenditure G CREDIT SALES GAL 30100 10,000 Total the columns Post the totals to the General Ledger (except the Other G/L Column) The Other G/L Column stems are posted individually to the GL account (A/C#) After posting to the GL put a check below the amount posted to show posting was done. For other items put check in Post column. H General Journals Sheet1 J 1 Special Journals - Expenditure Cycle 2 3 4 5 6 DATE DESCRIPTION 7 3-Dec Inventory from NAS Electronic B 9 10 11 12 13 B 302 5-Dec Office supplies - Higway Suppli 316 Beads DESCRIPTION Highway Suppliers Special Journals Revenue D PO PURCHASES # CHECK # E 14 15 16 17 Note 1: the $300 of Office Supplies on Dec 5 are posted to Supplies (asset) NOT Supplies Expense 10 19 CASH DISBURSEMENTS JOURNAL 20 21 22 DATE 23 7-Dec Jones 24 7-Dec PURCHASE JOURNAL DEBITS OTHER G/L ACCOUNTS AMOUNT POST REF G/L 40000 A/C# 4,000 10500 108 101 F ACCOUNTS PAY. G/L 20100 SUB. # 152 153 Special Journals Expenditure 300 DEBITS AMOUNT SUB POST G 1,651 X 750 X General Journals A/CH H Sheet1 CREDIT Acet. Pay. G/L. 20100 SUB. M 118 101 AMOUNT SUB. POST OTHER G/L ACCOUNTS AMOUNT POST 4,000 300 X X CREDITS CASH G/L. 10100 1,651 750 B D E 17 Note 1: the $300 of Office Supplies on Dec 5 are posted to Supplies (asset) NOT Supplies Expense CASH DISBURSEMENTS JOURNAL 19 20 21 22 DATE 23 7-Dec Jones 24 25 26 27 28 29 30 31 32 33 Note 2: Posting to the subsidary ledger (AP Subsidiary Ledger for Exp. Cycle) is done on an ongoing basis. 34 After posting to the subsidary ledger put a check in the SUB POST column to show posting was completed DESCRIPTION 37 38 39 40 41 42 7-Dec Highway Suppliers CHECK # Special Journals Revenue 152 153 ACCOUNTS PAY. G/L 20100 SUB. # 108 101 AMOUNT SUB POST 1,651 750 DEBITS X X Special Journals Expenditure G OTHER G/L ACCOUNTS A/CH 35 Note 3: Posting to the general Ledger is done at Month end 36 Total the columns. Post the totals to the General Ledger (except the Other G/L Column) The Other G/L Column items are posted individually to the GL account (A/C) After posting to the GL put a check below the amount posted to show posting was done. For other items put check in Post column. General Journals AMOUNT POST CREDITS CASH G/L 10100 Sheet! 1,651 750 123456 7 8 9 10 11 12 13 14 15 16 17 18 12222 19 20 23 Date Description B GENERAL Journal C Post Ref Special Journals Revenue Special Journals Expenditure Debits E Credits General Journals Sheet1 F G 1) Project 1 Instructions (this document file)-requirements of the project. 2) Cycles processes and other information (document file) - description of what needs to be done for each process, list of internal people involved, freight information, list of inventory items with sell price and costs (our purchase price), vendor list, and customer list. 3) Journals (excel file) - Special Journals and General Journal. (Turn this in) NOTE: this excel file contains 3 worksheets A. Special Journals Revenue - Sales and Cash Receipts B. Special Journals Expenditure-Purchases and Cash Disbursements C. General Journal. 4) Ledgers (excel file)-(Turn this in) NOTE: this excel file contains 5 worksheets A. General Ledger (on 3 worksheets) B. Accounts Receivable Subsidiary Ledger C. Accounts Payable Subsidiary Ledger. 5) Revenue Cycle blank forms (excel file)- this file contains blank forms for the Revenue Cycle. (Note: Some of these forms will have duplicate copies to facilitate the sharing of information.) NOTE: this excel file contains 4 worksheets A. Sales Order, B. Packing Slip and Shipping Notice C. Bill of Ladings, D. Invoices 6) Expenditure cycle blank forms (excel file)- this file contains blank forms for the Expenditure Cycle. (Note: Some of these forms will have duplicate copies to facilitate the sharing of information.) NOTE: this excel file contains 3 worksheets A. Purchase Orders, B. Receiving Reports, C. Checks 7) Documents in process (pdf file) - this file contains some of the documents already processed by the company in events that took place prior to December 12 or will come from outsiders later. You will need these to complete the steps for some of the events. The events below will tell you which ones will be used. It is best to file them where they would be in the business and get them A when needed. Create the folders on the next page and then file them as below (Note they will move to other folders as you go through the events. Pages 1, 2 and 3 should be in the Cashier Folder. They have been matched (3-way match) together as a package and waiting to be paid. Page 4 should be in the Receiving Department - Temporary folder. Pages, 5, 6, and 7 should be in the AP Unmatched folder. 8) Report Formats (Turn this in) - Make sure you complete the Unadjusted Trial Balance and AR Aging Report after part A, and the Adjusted Trial Balance, Income Statement (with the Statement of Retained Earnings) and the Balance Sheet. 9) Check figures. 10) Documents Work Sheet (Turn this in) Before getting started As part of this project, you will be processing and storing documents/information for many departments. These departments have multiple files that they keep for filing documents. Before you get started you will need to make the following files: If you do not want to buy files, it is OK to fold a piece of paper in half and write the file name on the paper. Or you can get a three-ring binder and separate it with the required sections. You will need the 12 files listed below (Note: at the end of the project one of the files will be empty). Reporting Control Department Reports-reports (financial statements and AR aging) Control Department Journals and Ledgers-journals, ledgers Common Sent to outsiders (bank, customer, carrier) and Other stuff (for anything else if needed) Revenue/Sales Cycle Billing Department -Open Sales Order (NOTE: when complete this one will be empty) Billing Department-Invoices (with Sales Order and Bill of Lading) Accounts Receivables Department - unpaid invoices Accounts Receivables Department - customer files of paid invoices Expenditure Cycle Accounts Payable unmatched receiving, purchase order, and invoice file. Accounts Payables vendor files (for paid matched invoices) Receiving department - temporary file Receiving department - permanent file Cashier- unpaid file (3-way match) PART A-Recording Transactions One Time Hits Electronic Company buys and sells DVD players, VHS players, and Phonographs. They use the periodic inventory method to record cost of goods sold. This means that all purchases of inventory will be recorded to purchases, not inventory, and that cost of goods sold will be recorded with the adjusting entries, not for each shipment. Following are a list of events for 2003. You are responsible for completing the documents related to these events (from the revenue and expenditure cycles), recording the transactions, if required, in the special journals, posting these to the ledgers (general ledger and subsidiary ledger when applicable), and prepare some reports. As part of this assignment, you will take on the many roles of the individuals from the different departments that are responsible for the transactions. Events: (See Events 1 and 2 video for help with the first two transactions) Dec. 12: Received Customer order 2011 from Shawn Patrick. It was for a total of $1,950. They ordered 10 DVD40s ($80 each), 20 DVD30s ($50 each), and 5 VHS30 ($30 each). They would like these goods on December 19. Please Process Sales Order #1200. (but do not ship the goods). This is Revenue Cycle Step 1. Dec. 13: Received approved requisition form from Operations requesting the purchase of 20 DVD Players-Basic and 25 DVD Players-Premium. These items will be purchased from 3DN Inc with an expected delivery date of Dec 30. Issue P.O. Number 358. Expenditure Cycle Step 1. Dec 16: Paid amount due ($750) to Abbey Roads Inc. for Purchase Order Number 320. Issue check number 154. (Note: the supporting documents were included in the Documents in Process file, which you should have put in the cashier folder. You will need: a) invoice from Abbey Roads Inc, b) PO 320 (accounts payable copy) and c) receiving report. You will process the check. This is Expenditure Cycle Step 4. Dec. 17: Received all of the product promotion pamphlets purchased for the marketing department. The purchase order (P.O.) was 356. The receiving department verified that all 1,000 pamphlets were there and in good condition. The pamphlets were sent to the marketing department. Use receiving number 121. (Note: from Documents in process, you will need: PO 356 receiving department copy which you should have put in the Receiving Department- temporary folder) This is Expenditure Cycle Step 2. Dec 18: Accounts Payable received invoice from Beach Bum Inc. for the promotion pamphlets ordered on P.O. 356. Record these as Promotion and advertising expense (account = 50300). (Note: from Documents in process, you will need: Invoice#488 from Beach Bum and PO 356 which are in accounts payable unmatched folder). (Note: this is not inventory. This is for account 50300-Promotion and Advertising Expense and will go in the other column) Dec. 20: Received approved requisition form from the Accounting Department requesting the purchase of 10 Pads of Columnar Paper (cost $5 each), 2 Printer Toners ($70 each), and 2 boxes of copy paper ($20 each). These items will be purchased from Highway Suppliers with an expected delivery date of January 3, 2004. Issue P.O. Number 359. Dec 19: Shipped the goods for Sales Order number 1200. Please process the required documents Dec 19: Shipped the goods for Sales Order number 1200. Please process the required documents and prepare packing slip/Shipping Notice # 1305, bill of lading#1305 and invoice # 1649. DO NOT include freight on the invoice. Dec. 21: Received Customer order 15666 from Tiny Tim's. It was for a total of $850. They ordered 5 DVD40s ($80 each) and 15 PHN10s ($30 each). They would like these goods shipped on December 31. Please Process Sales Order #1201. (but do not ship the goods). Dec. 27. Pay amount due to Beach Bum Inc for PO number 356. Use check 155. Dec 29: Received notification from the bank they received payment (check 899) from Shawn Patrick for invoice#1649. (Use the customer copy for the Remittance Advice sent by the bank). Dec 30: Received inventory from 3DN Inc. for Purchase Order Number 358. All items ordered were received in good condition (20 DVD Players Basic and 25 DVD Players-Premium). These items were delivered to the warehouse. Use receiving number 122. Dec 31: Received invoice from 3DN for PO number 358. (from Documents in process you will Customer Invoice from 3DN which you should find in the Accounts Payable -Unmatched folder.) Dec 31: Shipped the goods for Sales Order number 1201. Please process the required documents and prepare packing slip/Shipping Notice # 1306, bill of lading#1306 and issue invoice # 1650. DO NOT include freight on the invoice. Required: 1) For each of the above events, complete the documents, file them in the appropriate file and record the transactions, if required, in the correct special journals. You need to file the documents as you go through each event because some of them move around. (Hint: Do not use the general ioural for these entries For this proiect the general innrnal will only be used for adisting Required: 1) For each of the above events, complete the documents, file them in the appropriate file and record the transactions, if required, in the correct special journals. You need to file the documents as you go through each event because some of them move around. (Hint: Do not use the general journal for these entries. For this project, the general joumal will only be used for adjusting entries in Part B). Post the information to the subsidiary ledgers (where applicable-see note 4)) but not to the general ledger. The posting to the general ledger of the daily events will be done in the next requirement. NOTE 1: Not all of the events require entries in the journals. For example, the processing of a sales order (Dec. 12) is not an economic event (it will lead to one in the future) and thus no accounting entry is required for this event. To determine what need to be done, for each event identify the event as one of the events on the Cycle Processes and follow the steps. You need to prepare the documents and process them as you do an event. You can not do them at the end. For the first 4, the Cycle Processes step has been identified for you. NOTE 2: Do not use the general journal for the entries in this part. For this project, the general journal will only be used for adjusting entries in part B. NOTE 3: Blank Forms needed for processing are included on the excel spread sheets (Revenue Cycle Forms and Expenditure Cycle Forms). The revenue forms include sales orders, bill of ladings, and invoices. They need to be single-sided (Please DO NOT PRINT THEM DOUBLE-SIDED.) The expenditure forms include purchase orders, receiving reports, and checks. Some of these forms are multi-copies. Some of the copies (marked N/A) will not be required. Please complete all required copies of the forms. (To help you, the copies have been linked to the first copy. If you input information on the first copy it will be duplicated on the other copies). You need to print these out and process them according. Please see the Cycles processes document for narratives on the process. For this project you will complete each type of form twice (that means you will have to print out 2 sets of each form). Note 4: Posting to the subsidiary ledger: For every transaction recorded in the special journals that involves accounts receivables or accounts payables, when you record the transaction in the special journal don't forget to update the accounts payable or accounts receivable subsidiary ledger. Don't post to the general ledger until the end of the period which will be done in step 2. You should look at the transaction processing notes for information to help with posting to ledgers. 2) Post the information to the general ledger (where applicable). (Hint: Don't forget to include the transactions from Dec. 1-15 that are already included on the special journals. See our Transaction Processing Lecture Notes for more detail. Note 5: Posting to the general ledger. At month end, for each special journal, draw a single line in each column (for totaling) at the bottom of the line for the last transaction. Then skip one row on the special journal and write December Totals in the description column. Total each column (including the 'Other' column) and write the total for each column. Note that the transactions from December 1-15 need to be included in the totals. Cross-foot the special journal (add the totals for the debits and credits and make sure they equal) and then draw double lines under each column total. For each special column (except for the other column), post the total to the correct account in the general ledger. Write the total of the special journal column in proper account and complete the balance. Don't forget to put a checkmark under the column total of the special journal when you have finished posting For the other column you can not post the total. Instead post each item in this column to the general ledger. When complete put a check in the column next to the amount. 3) Prepare a pre-adjusting entry trial balance. 4) Prepare an A/R aging report showing the customer balances and the ages of those balances (customers down the side, current-30, 30-60, 60-90, >90 days across). Part B (Adjusting Entries and Reporting) The end of the year (2003) has come, and all of the routine transactions have been processed. One Time Hit's new accountant hired from Worldcom is in the process of trying to complete the year-end process. He needs to complete the adjusting entries, as well as the financial statements. At his previous company, they would just make up entries that would make the company look better, so the accountant is not sure what to do. He has hired you to help him with his work. Adjusting Entries: Prepare the correct adjusting entries using the following information. 1) The warehouse employees counted the ending inventory on hand at December 31, 2003. Their ending inventory balance is $40,000. (Remember we are using the periodic inventory method.) 2) The supplies department counted the supplies on hand. The balance of supplies at December 31 is $500. 3) The note payable is due in 5 years and was initiated on April 1, 2003. The note payable requires annual interest payments of 11% payable on March 31 of each year. Round to the nearest dollar. (Note: I used 275 days out of 365 to prorate the interest expense on the note payable) 4) The company has estimated that bad debt expense is equal to one half of a percent (.005) of net sales (sales less sales discounts and returns). 5) December salaries and wages will be paid on January 5, 2004. December salaries and wages are $6,000. 6) Two of the fixed assets have not been completely depreciated. These two items are a mainframe computer purchased for $20,000 in 2002 and a personal computer purchased in the current year on October 1, 2003 for $3,000. Computers are depreciated using the straight-line method over 3 years. The salvage value is 0. 7) The company's income tax rate is 15%. Round to the nearest dollar. (For taxes most companies complete the other adjusting entries and then post them to the GL. Then prepare a preliminary income statement and calculate the taxes. Then they can make the adjusting entry for taxes and post to the general ledger). Instructions: 1) Prepare the adjusting entries for December 31, 2003. These entries should be recorded in the Instructions: 1) Prepare the adjusting entries for December 31, 2003. These entries should be recorded in the general journal. Provide any necessary calculations to support your entries. Note: Don't forget to put the income tax adjusting journal entry in the general journal and post it to the general ledger. 2) Post these entries to the General Ledger and prepare a trial balance. 3) Prepare the classified balance sheet and the multi-step format income statement, and statement of retained earnings (or the statement of retained earnings can be included at the end of the income statement). The statement of cash flows is not required. You do not need to do Closing Entries When completed The project should be organized in a notebook or in folders (hard copy or electronic). 1) Control Department Reports. For this folder, put the reports in the following order: Income Statement, Statement of Retained Earnings, Balance Sheet, Pre-adjusting entry trial balance, Post adjusting entry trial balance and Accounts Receivable Aging 2) Control Department Journals and Ledgers. For this folder, put the journals and ledgers in the following order: Special Journals, General Journal, Accounts Receivable Subsidiary Ledger. Accounts Payable Subsidiary Ledger and General Ledgers (assets, habilities and equity, and revenue and expenses) 3) The other folders in the order listed above. Note that the Billing Department -Open Sales Order folder is empty When completed The project should be organized in a notebook or in folders (hard copy or electronic). 1) Control Department Reports. For this folder, put the reports in the following order: Income Statement, Statement of Retained Earnings, Balance Sheet, Pre-adjusting entry trial balance, Post adjusting entry trial balance and Accounts Receivable Aging. 2) Control Department Journals and Ledgers. For this folder, put the journals and ledgers in the following order: Special Journals, General Journal, Accounts Receivable Subsidiary Ledger, Accounts Payable Subsidiary Ledger and General Ledgers (assets, liabilities and equity, and revenue and expenses). 3) The other folders in the order listed above. Note that the Billing Department -Open Sales Order folder is empty. To Turn In. You will turn in 3 excel files and one word document on Canvas (upload to Project 1 in Assignments: 1. Upload the excel spreadsheets with your Reports Unadjusted Trial Balance, and Accounts Receivable Aging Report, Adjusted Trial Balance and Financial Statements (a. Income Statement and Retained Earnings, b. Balance Sheet). 2. Upload the excel spreadsheets with your Special Journals (Sales Journal, Cash Receipts Journal, Purchase Journal, Cash Disbursements Journal) and the General Journal. 3. Upload your excel spreadsheets with the General Ledger, Accounts Receivable Ledger, and Accounts Payable Ledger. 4. Upload the Documents Work Sheet (word document). A B C 1 Special Journals - Revenue Cycle 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 SABERN22222 17 18 19 20 21 23 24 25 26 DATE 2-Dec 5-Dec DESCRIPTION Tiny Tim-check 788 Smarts-Check 567 DATE DESCRIPTION Who Cares 6-Dec Ready CTRL Special Journals Revenue INV # D SALES JOURNAL 1648 DEBIT CASH G/L 10100 17,619 7,450 CASH RECEIPTS JOURNAL SUB. # E 888 SALE DISC. GL 30300 F Special Journals Expenditure SUB, # DEBIT ACCT. REC. G/L 10200 SUB POST 10,000 X 444 999 G A/R-G/L. 10200 AMOUNT CREDIT SALES GAL 30100 SUB POST 17,619 X 7,450 X 10,000 H General Journals Sheet1 CREDIT J OTHER G/L ACCOUNTS A/CH K AMOUNT POST REF CAKHST8888 15 16 17 18 19 20 21 22 88588 36 37 A 38 DESCRIPTION 39 40 DATE 6-Dec Who Cares C 33 34 Note 2: Posting to the general Ledger is done at Month end 35 SALES JOURNAL D INV # 1648 Special Journals Revenue SUB. # 888 E 23 24 25 26 27 28 29 30 31 32 Note 1: Posting to the subsidary ledger (AR Subsidiary Ledger for Rev. Cycle) is done on an ongoing basis. After posting to the subsidary ledger put a check in the SUB POST column to show posting was completed Ti F DEBIT ACCT. REC. G/L 10200 SUB POST 10,000 X Special Journals Expenditure G CREDIT SALES GAL 30100 10,000 Total the columns Post the totals to the General Ledger (except the Other G/L Column) The Other G/L Column stems are posted individually to the GL account (A/C#) After posting to the GL put a check below the amount posted to show posting was done. For other items put check in Post column. H General Journals Sheet1 J 1 Special Journals - Expenditure Cycle 2 3 4 5 6 DATE DESCRIPTION 7 3-Dec Inventory from NAS Electronic B 9 10 11 12 13 B 302 5-Dec Office supplies - Higway Suppli 316 Beads DESCRIPTION Highway Suppliers Special Journals Revenue D PO PURCHASES # CHECK # E 14 15 16 17 Note 1: the $300 of Office Supplies on Dec 5 are posted to Supplies (asset) NOT Supplies Expense 10 19 CASH DISBURSEMENTS JOURNAL 20 21 22 DATE 23 7-Dec Jones 24 7-Dec PURCHASE JOURNAL DEBITS OTHER G/L ACCOUNTS AMOUNT POST REF G/L 40000 A/C# 4,000 10500 108 101 F ACCOUNTS PAY. G/L 20100 SUB. # 152 153 Special Journals Expenditure 300 DEBITS AMOUNT SUB POST G 1,651 X 750 X General Journals A/CH H Sheet1 CREDIT Acet. Pay. G/L. 20100 SUB. M 118 101 AMOUNT SUB. POST OTHER G/L ACCOUNTS AMOUNT POST 4,000 300 X X CREDITS CASH G/L. 10100 1,651 750 B D E 17 Note 1: the $300 of Office Supplies on Dec 5 are posted to Supplies (asset) NOT Supplies Expense CASH DISBURSEMENTS JOURNAL 19 20 21 22 DATE 23 7-Dec Jones 24 25 26 27 28 29 30 31 32 33 Note 2: Posting to the subsidary ledger (AP Subsidiary Ledger for Exp. Cycle) is done on an ongoing basis. 34 After posting to the subsidary ledger put a check in the SUB POST column to show posting was completed DESCRIPTION 37 38 39 40 41 42 7-Dec Highway Suppliers CHECK # Special Journals Revenue 152 153 ACCOUNTS PAY. G/L 20100 SUB. # 108 101 AMOUNT SUB POST 1,651 750 DEBITS X X Special Journals Expenditure G OTHER G/L ACCOUNTS A/CH 35 Note 3: Posting to the general Ledger is done at Month end 36 Total the columns. Post the totals to the General Ledger (except the Other G/L Column) The Other G/L Column items are posted individually to the GL account (A/C) After posting to the GL put a check below the amount posted to show posting was done. For other items put check in Post column. General Journals AMOUNT POST CREDITS CASH G/L 10100 Sheet! 1,651 750 123456 7 8 9 10 11 12 13 14 15 16 17 18 12222 19 20 23 Date Description B GENERAL Journal C Post Ref Special Journals Revenue Special Journals Expenditure Debits E Credits General Journals Sheet1 F G