COMPREHENSIVE PROBLEM 1 PART A (CHAPTERS 1, 3, 4) Page 136 The purpose of comprehensive Problem is to review and reinforce your understanding of the accounting cycle The number of transactions included in this comprehensive problem has been kept to a minimum that you consulate what might happen in actual practice without unnecessary redundancy or excessive time requirements BACKGROUND Segway Adventure Tours, Inc. opened for business in Sedona, AZ in July 2019. Its owner and founder. Laren McKay, envisioned an eco-friendly way for customers to experience the beautiful red rock vistas Sedona has to offer, while having fun riding a Segway. Lauren hos hired you to perform the accounting and record-keeping for the business and expects your work of an accounting professional to be neat and properly formatted. You have established the following chart of accounts for Segway Adventure Tours, Inc. ACCT # ACCOUNT TITLE ACCOUNT TITLE 311 312 112 114 141 313 314 411 511 512 142 143 513 Cash Accounts Receivable Prepaid Insurance Office Supplies Segway Accumulated Depreciation --Segway Computer Accumulated Depreciation-Computer Accounts Payable Notes Payable Unearned Service Revenue Salaries & Wages Payable Interest Payable Income Tax Payable Common Stock Retained Earnings Dividends Income Summary Service Revenue Salaries & Wages Expense Utilities Expense Advertising Expense Rent Expense Office Supplies Expense Insurance Expense Depreciation Expense Interest Expense Income Tax Expense 514 515 211 212 213 520 530 214 215 540 550 216 USE THESE ACCOUNT TITLES FOR YOUR JOURNAL ENTRIES DISCOVERY OF ERRORS: Refer to the page following the transactions for suggestions in case you make an error Page 137 COMPREHENSIVE PROBLEM 1 PART A (CHAPTERS 1. 3. 4) COMPREHENSIVE PROBLEM 1 REQUIREMENTS PART AL Prepare journal entries to record the July 2019 transactions listed on the following page refer to the chart of accounts for the appropriate account titles to use). Prepare a separate journal entry for each Fag e t every check figure Total debits 51200 , OPTIONAL: Post the journal entries to the Taccounts and calculate the account balances. Prepare on unadjusted trial balance. Check floures: Cash balonce 520.810: Trial balance total debits = $94.760 (2) Prepare adjusting journal entries in the oneral journal based on the following information (all AJEsore dated July 31) (a) Record insurance expired for one month. (5) Employees earn salaries & wages of $350 per day. Accrue wages and salaries for July 27-31. (c) There were $75 of supplies on hand at the end of the month (d) The segways have a useful life of 5 years. Record one month of depreciation. (e) The computers have a useful life of 3 years. Record one month of depreciation. (f) Annual interest on the note payable is 8%. Record accrued interest for July. (9) On July 31, Segway Adventure Tours provided a tour to customers. The customers will be billed in August, $800. (h) By the end of July, 80% of the tours have been provided for customers for which payment had been received in advance. (1) Accrue estimated income taxes for July of $1,430. Check figure: Total debits = $6,995. OPTIONAL: Post the adjusting entries to the T-accounts and calculate the account balances. Prepare on adjusted trial balance. Check figure: Total debits = $99,880. COMPREHENSIVE PROBLEM 1 PART A (CHAPTERS 1, 3, 4) Page 138 Tannection Segway Adventure Tours, Inc. began business by selling 35,000 shares of $1 por value common stock for $35,000 Pard $2,300 to rent a building and office space in Sedona for the month of July. Purchased 10 Segways for $45,000. Paid $6,000 cash down and signed a promissory note for the remainder Purchased two computers and paid $4,680 cash. Purchased a one-year liability insurance policy for $3,600. Provided tour services to customers and received $5,000 cash. Purchased $370 of office supplies on account. Paid $300 to advertise the new business on Facebook. All ads ran in July. Received $1,600 cash in advance from 10 customers to reserve spots for future tours. Paid employee salaries and wages for July 1 - 12 of $4,200. Provided a tour to new employees of the Marriott Hotel. The service was provided on account, $4,000. Paid for the office supplies purchased on July 5. Received $3,500 cash for tours provided to customers. 23 Received $3,000 from Marriott Hotel for payment on their account. Received utility bills (water, electric, telephone) for the month totaling $560. 26 Paid employee salaries and wages for July 13 - 26 of $4,900. 30 Provided tours for $6,100 to customers on account. 31 Declared and paid cash dividends to the stockholders, $940. MARTA (CHAPTERS 1. 3.) CREDIT DERIT PREHENSIVE PROBLEM A UNT TITLES AUSTIN ENTRIES