Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 1 Work4Me Algorithmic Version 1 st Web-Based Edition Problem Four Daily and Adjusting Entries Classic Accounting Services, Incorporated Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 2 CHART OF ACCOUNTS Classic Accounting Services, Incorporated Problem Four ASSETS REVENUE 101 Cash 401 Accounting Fees Earned 105 Accounts Receivable 405 Consulting Fees Earned 109 Notes Receivable 121 Prepaid Rent 122 Prepaid Insurance EXPENSES 125 Prepaid Advertising 127 Office Supplies 601 Salaries and Wages Expense 131 Office Equipment 602 Office Supplies Expense 132 Accum. Depreciation, Office Equip. 604 Vehicle Operating Expense 139 Automobiles 605 Advertising Expense 140 Accum. Depreciation, Automobiles 606 Delivery Expense 150 Building 610 Depreciation Exp., Office Equip. 151 Accum. Depreciation, Building 612 Depreciation Exp., Automobiles 160 Land 615 Depreciation Exp., Building 621 Rent Expense 622 Insurance Expense LIABILITIES 624 Property Tax Expense 625 Electric and Gas Expense 201 Accounts Payable 626 Telephone Expense 203 Short-term Notes Payable 628 License Expense 209 Salaries and Wages Payable 630 Professional Fees Expense 211 Property Taxes Payable 635 Miscellaneous Expense 215 Interest Payable 651 Interest Expense 220 Unearned Consulting Fees 231 Long-term Notes Payable 241 Mortgage Payable STOCKHOLDERS' EQUITY 301 Common Stock 305 Retained Earnings 310 Cash Dividends Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 3 Problem 4 Journalizing Daily and Adjusting Entries Classic Accounting Services, Incorporated Problem Four, has been completed for you through the June 16 daily entries, and the balances of the accounts to this date are shown in the Trial Balance on page 2. Using the Chart of Accounts found on Page 3, your first job is to complete the daily entries for the final two weeks of the month. After proving the accuracy of your June 30 Trial Balance, your second job is to complete the required adjusting entries and prepare an Adjusted Trial Balance. When the Adjusted Trial Balance totals match the Check Figures balances, your final responsibility will be to print the selected documents and use them to answer the analysis questions. 1. Go to www.pklsoftware.com, select Work4Me, and log in. 2. From the Menu Bar of the Data Entry page, select Problem 4, Daily and Adjusting Entries, and click. 2. Move the pointer to Journal/Ledgers/Statements and select General Ledger. 3. Print a copy of the June 16 Trial Balance. 2. Move the pointer to Data Entry and click. 3. Click on OK, at the message directing you to select Daily or Adjusting entries. 4. Move the pointer to Daily JE and click. You will be recording daily entries for last two weeks of June. When your June 30 trial balance matches the check figures, you will proceed to the adjusting entries for the period. You must record and correct all daily entries using the Daily JE data entry format. You must also remember to record and correct all adjusting entries only in the Adjusting JE data entry format. ****************************************************************************** Documentation You will be required to enter check numbers and/or invoice numbers for each daily transaction. After you have verified the journal entry, the document boxes for checks and invoices will be enabled, to allow to enter the document number. Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 4 TRANSACTIONS FOR JUNE 17-30 Student Analysis June 17 Purchased office equipment costing $3,550.00 and office supplies listed at $90.00 on account (30-day credit) from Acme Supply. After you click on "Verify Journal," at the Invoice Number document prompt, enter Invoice Number B4444. ****************************************************** June 17 Received a check for $865.00 for accounting services completed today. Invoice Number: C4666. ****************************************************** June 19 Issued check number 00456 for $725.00 for June advertising. Invoice Number: W5555. ****************************************************** June 19 Nine hundred dollars ($900.00) worth of additional accounting services was performed for a client. The client paid $300.00 in cash and asked to be billed for the remaining balance owed. The client is allowed 30-day credit terms. Invoice Number: C4667 ****************************************************** June 21 Two thousand dollars ($2,000.0) cash was received as a retainer fee for consulting work to be performed for a client (Unearned Consulting Fees). Invoice Number: RTFEE (for retainer fee). ****************************************************** June 22 Ali's Shell Service was paid $90.50 for gas and automobile repairs. Check Number: 00457. Invoice Number: 47777. ****************************************************** Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 5 Transactions for June 17-30 Continued... Student Analysis June 23 Postage stamps, envelopes, and business folders (office supplies) for the office were purchased for $66.00. Check Number: 00458. Invoice Number: 00777. ****************************************************** June 23 Ortega Courier Service was paid $24.00 for delivery of documents to a client. Check Number: 00459. Invoice Number: 22222. ****************************************************** June 25 A check for $635.00 was received from a client as payment in full on her account balance. Invoice Number: C4632. ****************************************************** June 27 A check for $124.00 was issued as payment in full of the Vandercamp Office Supply account balance that is due today. Check Number: 00460. Invoice Number: V4567. ****************************************************** June 29 A 6-month liability insurance policy was purchased for the period of July-December for $1,800.00 cash. Check Number: 00461. Invoice Number: L3355. ****************************************************** June 29 A check for $304.50 was issued to pay the Loomis-Newcastle Telephone Company bill that was received today. Check Number: 00462. Invoice Number: LN888. ****************************************************** Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 6 Transactions for June 17-30 Continued... Student Analysis June 30 Issued a check and paid a cash dividend of $1,500.00 to the stockholders of the company. Check Number: 00463. Invoice Number: CASHD (for cash dividend). ****************************************************** June 30 A check for $300 was received as partial payment on account from a client. Invoice Number: C4651. This Concludes the Daily Transactions For Problem 4 - Daily and Adjusting Entries. Now that you have completed entering the daily transaction for Classic Accounting Services, Incorporated, it is time to check the accuracy of your work before continuing to the adjusting transactions.. 1. Move the pointer to Journal/Ledgers/Statements in the Menu Bar, move down to the General Ledger selection and click. The completed Trial Balance will appear on the screen. Print the trial balance. 2. Move the pointer to Check Figures in the Menu Bar. Select Problem Check Figures. Print the Check Figures for Problem Four - Daily. If 'Your Balances" do not match the "Correct Balances" of the selected account totals in the Check Figures for Problem 4, you must correct the unmatched balances before answering the evaluation questions. If 'Your Balances" match the "Correct Balances" for the selected account totals in the Check Figures for Problem 4, complete the instructions on the next page, and answer the questions on the examination on the last page of this manual. Adjusting Entries for June 30 The adjusting entries procedure (Click on Adjusting JE) must be used to record (and correct) all adjusting entries. Remember that all adjustments are being made for June 30, the end of the SECOND QUARTER of the year. Adjusting entries must not be entered using the Daily Entries procedure. Using your correct June 30 Trial Balance, and the adjustment information that follows, record the adjusting entries for Classic Accounting Services, Incorporated. Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 7 A. A total of $545.00 worth of office supplies have been used during the second quarter. B. Rent was prepaid for six months in advance on April 1 of this year. C. The expired portion of the Prepaid Insurance account totals $1,800.00 at the end of June. D. Advertising copy was paid for and correctly charged to the Advertising Expense account during the quarter. An examination of the account shows that $100.00 worth of advertising copy has not yet been run as of June 30. E. It is determined that $345.00 worth of accounting services have been completed for a client, but not yet been billed. F. Total accrued interest on all notes payable, including the mortgage, is $325.00. G. An examination of the Unearned Consulting Fees account shows as of June 30, $1,380.00 of this account balance has been earned. H. Accrued property taxes for the quarter total $220.00. I. Depreciation of the office equipment for the year totals $1,260.00 and is calculated on the straight-line basis. J. Depreciation of the automobile has been calculated to be $180.00 per month. K. The building depreciates at a rate of $1,400.00 per quarter. L. Accrued wages total 8.5 hours worked at a rate of $12.50 per hour. Now that you have completed entering the adjusting entries for Classic Accounting Services, Incorporated, it is time to check the accuracy of your work. Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 8 1. Move the pointer to Journal/Ledgers/Statements in the Menu Bar, move down to the General Ledger selection and click. The completed Trial Balance will appear on the screen. Print the trial balance. 2. Move the pointer to Check Figures in the Menu Bar. Select Problem Check Figures. Print the Check Figures for Problem Four - Adjusted. If all of your totals match the check figures, continue with the instructions that follow. If your Trial Balance totals for the accounts shown in the Check Figures do not match, follow the instructions in 'How to Correct Journal Entries." 3. Print the Adjusted Trial Balance for Classic Accounting Services, Incorporated. 4. Click on the Ledger Card button. The Cash ledger card will appear on the screen. Print the Cash account. 5. Using the pull-down screen, select, show, and print each of the following additional ledger cards. Account number: 105 Accounts Receivable Account number: 201 Accounts Payable Account number: 220 Unearned Consulting Fees Account number: 601 Salaries Expense 6. Move the pointer to Journal/Ledgers/Statements in the Menu Bar, then down to Financial Statements and select Income Statement. Print the document. 7. Select and Print the Retained Earnings Statement. 8. Select and Print the Balance Sheet. 9. When all of the required documents have been printed, you have completed your computer work for Problem 4. To exit this problem, click on Log Out. From the PKL software Home Page you may make another selection or click on File and exit the website. 10. Using your printed documents, answer the questions to the examination on the next page. After you have filled in the answers, log in to Problem 4. Daily and Adjusting Entries, move the pointer to Evaluations and complete Exam 4: Daily and Adjusting Entries. You may print the examination to hand in to your professor or, if required, email your examination to your professor. Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 9 ALGORITHMIC WORK4ME PROBLEM FOUR NAME_______________________________________ DAILY & ADJUSTING ENTRIES CLASS DAY AND TIME__________DATE________ 1. Do the totals on your printed Adjusted Trial Balances match the figures shown in the Check Figures - Problem 4 - After Adjusting Entries? A) Yes B) No ______________ 2. If the ending inventory for office supplies had been only $50, what would have been the balance of the Office Supplies Expense account after the required adjusting entry? $_____________ 3. If there had not been any accrued salaries and wages for the period, what would have been the balance of the Salaries and Wages Expense account? $_____________ 4. What is the total of the quarterly operating expenses? $_____________ 5. What is the total Income From Operations for the quarter ended June 30? $_____________ 6. The Income From Operations of the business is what percent of the Total Revenues, rounded to the nearest hundredth? On the computer graded examination do not write the word percent or use the percent sign % in the answer to this question. _____________% 7. To the nearest hundredth, Salaries and Wages Expense is what percent of total revenues? On the computer graded examination do not write the word percent or use the percent sign [%] in the answer to this question. _____________% 8. For the same quarter one year ago, Income From Operations was 55.01% of Salaries and Wages Expense and 17.01% of Total Revenues. This current quarter has shown improvement in: A. Both Items B. Only Salaries and Wages Expense C. Only in Income From Operations to Total Revenues D. None of the areas. ______________ 9. If in error, the adjusting entry for the depreciation of the building had not been recorded as required, what would have been the reported total of the Income From Operations for the business? $_____________ Algorithmic Work4Me - Problem 4 1 st Web-Based Edition, Copyright 2015 - 20220 PKL Software, Incorporated. All rights reserved. January 1, 2020 Page 10 10. How much has the Retained Earnings account increased this accounting period? $_____________ 11. What is the net worth or total Stockholders' Equity of Classic Accounting Services, Incorporated? $_____________ 12. On the June 30 Balance Sheet, what is the book value of Automobiles? $_____________ 13. On the Cash account ledger card, what was the invoice number for the first June 19 credit entry? ______________ Invoice Number 14. What was the number of the check used to pay the cash dividend on June 30? ______________ Check Number 15. On the Accounts Payable ledger card, what was the number of the check used to pay invoice number V4567? ______________ Check Number