1. The Accounting Cycle - During the period (8pts): Following is a complete list of accounts and account balances that appear in the general ledger as of December 31, 2019 for the Blue Box Travel Co. Assume all accounts have their normal debit or credit balance.

Account:	Amount:		Account:	Amount:
Cash	$ 108,540		Common Stock	$ 4,000
Accounts Receivable (A/R)	$ 83,120		Additional Paid-In Capital	$ 38,000
Prepaid Rent	$ 4,300		Retained Earnings	$ 326,770
Equipment	$ 525,000		Service Revenue	$0
Accumulated Depreciation-Equipment	$ 50,000		Wages Expense	$0
Accounts Payable (A/P)	$ 77,120		Interest Expense	$0
Deferred Revenue	$ 17,070		Depreciation Expense	$0
Interest Payable	$ 8,000		Rent Expense	$0
Notes Payable	$ 200,000		Utilities Expense	$0

The following transactions were identified during January 2020:

Date:	Transaction:
1/9	Received $18,400 in cash from customers on their accounts receivable.
1/13	Paid $22,950 in cash to creditors on accounts payable.
1/16	Provided $30,000 worth of services to customers. $5,000 was paid for in cash by customers, the remaining $25,000 was purchased by customers on account.
1/17	Received $18,000 cash in advance from customers for travel services to be provided in February.
1/25	Paid $1,425 in cash for utilities used in January.
1/28	Prepaid rent in advance for February 2020 in the amount of $4,300 in cash.

PART A (5pts): Record all of the above transactions that occurred during the period using journal entries. Make sure to use proper formatting for all entries, and to include the date of each entry and a brief description of each entry. Do not make any end of the period adjusting or closing entries.

PART B (3pts): After recording the above transactions, calculate the ending balance that would appear on the January 31, 2020 unadjusted trial balance for the following accounts. You must show your work, such as a formula or T-account used to arrive at your answer.

1. Cash

2. A/R

3. A/P

2. The Accounting Cycle – End of the period (7pts): The Rosebud Motel, Inc has prepared its unadjusted trial balance as of 12/31/2020 and is now ready to make its adjusting entries at the end of its annual accounting period. Assume all accounts have their normal debit or credit balance.

The following additional information was gathered at December 31, 2020, the end of the firm’s annual accounting period. Assume Rosebud Motel uses an annual accounting period and all adjustments and adjusting entries are made only at the end of each annual accounting period (i.e. AJEs are only made on December 31^st). No adjusting entries have been made yet for the year ending December 31, 2020 related to the below items:

1. On 1/1/2020, the beginning balance of the Supplies account was $3,940. During 2020, Rosebud Motel purchased $18,945 worth of additional supplies. A physical count of supplies indicates that there are only $5,180 worth of supplies remaining on hand as of 12/31/2020.

2. On September 29^th, 2020, a customer paid $3,200 in advance for four months (i.e. $800 per month) of extended stay at the motel to begin October 1, 2020 through January 31, 2021. Rosebud Motel records this as Deferred Revenue on 9/29 at the time the customer paid cash.

3. Rosebud Motel purchased a building for $250,000 on October 1, 2013, which was recorded as Building. The building has $0 salvage value and has an estimated useful life of 25 years. Rosebud Motel uses the straight-line depreciation method to allocate the cost of the building evenly over its 25-year useful life.

4. On May 1^st, 2020, Rosebud Motel borrowed $48,000 from the local bank, signing a note payable. This note is due in 8 years and has an annual interest rate of 6.5%. Rosebud pays interest every April 30^th and the first interest payment is due on April 30^th, 2021.

5. On January 1^st, 2020, Rosebud Motel prepaid $72,000 in cash for a three-year insurance policy, covering the period of January 1^st, 2020 – December 31, 2023. The firm recorded this as Prepaid Insurance on 1/1/2020.

PART A: Record Adjusting Journal Entries (AJEs) – 5pts: Record the AJEs related to the information above that Rosebud would make on 12/31/2020. Make sure to use proper formatting for all entries, and to include the date of each entry and a brief description of each entry. You must show all of your work on calculations to receive full credit.

PART B: Calculate adjusted Net Income for 2020 – 1pts: In its unadjusted trial balance, as of 12/31/2020, the total of all revenue account balances for the 2020 annual accounting period was $591,422 and the total of all expense account balances for the 2020 annual accounting period was $486,420. Calculate the amount of Net Income that Rosebud Motel would report on its Income Statement for the year ended December 31^st, 2020. You must show all of your work on calculations to receive full credit.

PART C: Calculating Net Book Value – 1pt: Calculate the net book value of the building that would be reported on the classified Balance Sheet as of 12/31/2020. You must show all of your work on calculations to receive full credit.

3. The End of the Accounting Cycle – prepare the financial statements (7pts): The adjusted trial balance for Dunder-Miflin, Inc. as of March 31^st, 2020 is given below:

Dunder-Miflin
Adjusted Trial Balance
As of 3/31/2020
Account:	DEBIT:	CREDIT:
Cash	$ 19,041
Accounts Receivable	$ 16,911
Prepaid Rent	$ 1,582
Short Term Investments	$ 4,044
Equipment	$ 35,500
Accumulated Depreciation - Equipment		$ 14,200
Land	$ 49,200
Goodwill	$ 60,840
Accounts Payable		$ 8,427
Wages Payable		$ 1,290
Interest Payable		$ 60
Notes Payable		$ 24,000
Common Stock		$ 2,400
Additional Paid In Capital		$ 29,444
Retained Earnings		$ 91,117
Service Revenue		$ 67,422
Investment Revenue		$ 53
Wages Expense	$ 41,375
Utilities Expense	$ 1,638
Interest Expense	$ 180
Depreciation Expense	$ 7,100
Rent Expense	$ 932
Dividends	$ 70
	$ 238,413	$ 238,413

Using the adjusted trial balance provided above for Dunder-Miflin, prepare the following financial statements:

PART A (3pts): Income statement for the period ended March 31^st, 2020.

PART B (4pts): Classified balance sheet as of March 31^st, 2020. Assume no additional stock was issued during the period and $70 in dividends were declared and paid in cash during the period.

Answer rating: 100% (QA)

Journal of Blue Box Travel Co Accounts Titles and Explanation Cash Date Debit Credit 0109 18400 1840... View the full answer