Financial Accounting Project 1: Accounting Cycle & Analysis Overview: The objective of the individual projects is...

    

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Financial Accounting Project 1: Accounting Cycle & Analysis Overview: The objective of the individual projects is to grant students the opportunity to apply concepts learned in class to normal business situations. In this project you will process the accounting cycle for a small business and analyze your findings. Grading: This project is worth a total of 100 points with the breakdown as follows: Financial Statements 20 points Cinder Blackburn has long been successful at repairing electronic devices, big or small, and decided to finally make a business out of it. In November 2020, she started her own business called Cinder's Repair Shop. The shop is located in an industrial warehouse complex in San Jose where Cinder rents a small workspace within one of the bigger warehouses. Cinder has had success so far completing many projects for clients (enough to work 30 hours a week), receiving inquiries from potential new customers, and even generating a profit in the first month. Below are the financial statements for the company's first month of operations. Cinder Repair Shop Income Statement For the Month Ended November 30, 2020 Revenues Repair fees earned $ 1,250 Interest earned 800 Total revenue Expenses Rent expense Salaries expense Utilities expense Total expenses Net income 850 400 50 $ 2,050 $ 1,300 750 Cinder Repair Shop Statement of Retained Earnings For the Month Ended November 30, 2020 Beginning retained earnings Add: Net income Less: Dividends Ending retained earnings Assets Cash Accounts receivable Supplies Equipment Total assets Cinder Repair Shop Balance Sheet November 30, 2020 Liabilities Accounts payable Total liabilities Stockholder's Equity Common stock Retained earnings Total stockholder's equity Total liabilities and stockholder's equity $ $ 750 75 675 $ 1,440 400 900 6,000 $8,740 5 225 225 7,840 675 8,515 $8,740 Page For the first month, Cinder had a friend assist her with her accounting. That friend has since found a full-time job and is no longer able to assist her, so she has turned to you. She knows that you are greatly enjoying your accounting class and thinks you will be able to assist her. You feel confident that you are up to the task and agree to go through the financial information, prepare the necessary journal entries, prepare the financial statements, and ready the books for the upcoming new year. Here is Cinder's chart of accounts as (prepared by the previous accountant). After some research you determine this to be sufficient for the company at this point. Acct. No. Account Name 101 Cash 104 Accounts receivable 110 Prepaid insurance 115 Supplies 140 Equipment 141 Accumulated depreciation -equipment 201 Accounts payable 203 Salaries payable 205 Unearned revenue 240 Interest payable 250 Loan payable 301 Common stock 302 Retained earnings 305 Dividends 350 Income summary Acct. No. Account Name 401 Repair fees earned 405 Interest earned 601 Salares expense 610 Rent expense 611 Utilities expense 615 Insurance expense 620 Delivery expense 640 Supplies expense 650 Advertising expense 660 Depreciation expense 690 Interest expense Thanks so much again for helping me out, I don't have any idea how to "keep the books" and prepare those confusing financial statements. All I know is that my bank wants them! I wrote down everything I did since I wasn't sure what you would need, so here it is: Dec. 1: I invested $500 cash and $1,580 of supplies into the business. 1: Purchased a 12-month business insurance policy valued at $1,625 but I received a new customer discount and only had to pay $1,200! Coverage begins immediately. 2: Took out small business loan of $5,000 from Commonwealth Bank. 3: Paid landlord $875 for December rent on business space for repair shop. 4: Customer Kai Kingsman brought in an old droid for repair. I started work immediately and it took me two weeks to complete the repair. I provided Kai an invoice for $10,900 on December 18th when he came into pick up the repaired droid. 5: Paid my roommate $375 for the December rent on my rented room in the Phoenix apartment building. 6: Purchased $380 of supplies with cash from Circuits 'R' Us. W 8: I paid my outstanding November Accounts Payable balance. 14: Customer Sasha Chang dropped off her portscreen for repair along with a cash prepayment of $50. 15: Paid assistant's salary of $1,200. I have one worker, Iko, and she is amazing! I pay her every two weeks on Friday. 16: Purchased $440 of supplies on account from Not Your Mother's Technology Warehouse. 18: Complete Sasha Chang's repair. Total repair charge was $75. Sasha paid the remaining balance when she came to pickup the portscreen on December 18. 21: I was interviewed by the local paper for a piece regarding new businesses in the area. Usually, the paper charges $85 to an ad but this article will run free of charge and be a great source of advertising! 22: Customer Dr. Erland prepaid $4,000 for a Med-Droid he plans to deliver on January 3rd for repair. 23: Met with Government Advisor Torin Korr to discuss future potential work regarding installing a recording/reporting system for the local government. The potential worth of this contract could be as much as $45,000. The government will decide in the new year whether or not to move forward with the project. 26: Received Kai Kingsman's complete cash payment for December 18th billed work. 27: I took money out of $1,000 for myself. 31: Received the December utility bill. It is for $95. I will pay it next month since it is not due until January 10th. Financial Accounting Project 1: Accounting Cycle & Analysis Overview: The objective of the individual projects is to grant students the opportunity to apply concepts learned in class to normal business situations. In this project you will process the accounting cycle for a small business and analyze your findings. Grading: This project is worth a total of 100 points with the breakdown as follows: Financial Statements 20 points Cinder Blackburn has long been successful at repairing electronic devices, big or small, and decided to finally make a business out of it. In November 2020, she started her own business called Cinder's Repair Shop. The shop is located in an industrial warehouse complex in San Jose where Cinder rents a small workspace within one of the bigger warehouses. Cinder has had success so far completing many projects for clients (enough to work 30 hours a week), receiving inquiries from potential new customers, and even generating a profit in the first month. Below are the financial statements for the company's first month of operations. Cinder Repair Shop Income Statement For the Month Ended November 30, 2020 Revenues Repair fees earned $ 1,250 Interest earned 800 Total revenue Expenses Rent expense Salaries expense Utilities expense Total expenses Net income 850 400 50 $ 2,050 $ 1,300 750 Cinder Repair Shop Statement of Retained Earnings For the Month Ended November 30, 2020 Beginning retained earnings Add: Net income Less: Dividends Ending retained earnings Assets Cash Accounts receivable Supplies Equipment Total assets Cinder Repair Shop Balance Sheet November 30, 2020 Liabilities Accounts payable Total liabilities Stockholder's Equity Common stock Retained earnings Total stockholder's equity Total liabilities and stockholder's equity $ $ 750 75 675 $ 1,440 400 900 6,000 $8,740 5 225 225 7,840 675 8,515 $8,740 Page For the first month, Cinder had a friend assist her with her accounting. That friend has since found a full-time job and is no longer able to assist her, so she has turned to you. She knows that you are greatly enjoying your accounting class and thinks you will be able to assist her. You feel confident that you are up to the task and agree to go through the financial information, prepare the necessary journal entries, prepare the financial statements, and ready the books for the upcoming new year. Here is Cinder's chart of accounts as (prepared by the previous accountant). After some research you determine this to be sufficient for the company at this point. Acct. No. Account Name 101 Cash 104 Accounts receivable 110 Prepaid insurance 115 Supplies 140 Equipment 141 Accumulated depreciation -equipment 201 Accounts payable 203 Salaries payable 205 Unearned revenue 240 Interest payable 250 Loan payable 301 Common stock 302 Retained earnings 305 Dividends 350 Income summary Acct. No. Account Name 401 Repair fees earned 405 Interest earned 601 Salares expense 610 Rent expense 611 Utilities expense 615 Insurance expense 620 Delivery expense 640 Supplies expense 650 Advertising expense 660 Depreciation expense 690 Interest expense Thanks so much again for helping me out, I don't have any idea how to "keep the books" and prepare those confusing financial statements. All I know is that my bank wants them! I wrote down everything I did since I wasn't sure what you would need, so here it is: Dec. 1: I invested $500 cash and $1,580 of supplies into the business. 1: Purchased a 12-month business insurance policy valued at $1,625 but I received a new customer discount and only had to pay $1,200! Coverage begins immediately. 2: Took out small business loan of $5,000 from Commonwealth Bank. 3: Paid landlord $875 for December rent on business space for repair shop. 4: Customer Kai Kingsman brought in an old droid for repair. I started work immediately and it took me two weeks to complete the repair. I provided Kai an invoice for $10,900 on December 18th when he came into pick up the repaired droid. 5: Paid my roommate $375 for the December rent on my rented room in the Phoenix apartment building. 6: Purchased $380 of supplies with cash from Circuits 'R' Us. W 8: I paid my outstanding November Accounts Payable balance. 14: Customer Sasha Chang dropped off her portscreen for repair along with a cash prepayment of $50. 15: Paid assistant's salary of $1,200. I have one worker, Iko, and she is amazing! I pay her every two weeks on Friday. 16: Purchased $440 of supplies on account from Not Your Mother's Technology Warehouse. 18: Complete Sasha Chang's repair. Total repair charge was $75. Sasha paid the remaining balance when she came to pickup the portscreen on December 18. 21: I was interviewed by the local paper for a piece regarding new businesses in the area. Usually, the paper charges $85 to an ad but this article will run free of charge and be a great source of advertising! 22: Customer Dr. Erland prepaid $4,000 for a Med-Droid he plans to deliver on January 3rd for repair. 23: Met with Government Advisor Torin Korr to discuss future potential work regarding installing a recording/reporting system for the local government. The potential worth of this contract could be as much as $45,000. The government will decide in the new year whether or not to move forward with the project. 26: Received Kai Kingsman's complete cash payment for December 18th billed work. 27: I took money out of $1,000 for myself. 31: Received the December utility bill. It is for $95. I will pay it next month since it is not due until January 10th.

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