Chapter 6 The Accounting Cycle: Statements and Closing Entries At the end of July, the following...
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Chapter 6 The Accounting Cycle: Statements and Closing Entries At the end of July, the following adjustments had to be journalized to properly report the balances of the company's accounts. Jul 31 Jul 31 Jul 31 Jul 31 Jul 31 One month of prepaid insurance worth $100 has been used Monthly depreciation on the equipment was $450 Unearned revenue worth $620 has now been earned Interest of $75 has accrued on the of the note payable Accrued salary expense of $500 for an employee Note: Of the remaining balance of the note payable, $5,000 will be paid within the next year. Required a) Enter the opening balances from the June 2018 balance sheet into the general ledger accounts (the ledger accounts are presented at the end of this question). b) Prepare the journal entries for the month of July and post them to the appropriate general ledger accounts. Date Account Title and Explanation PR Debit Credit The Accounting Cycle: Statements and Closing Entries c) Create the trial balance in the spreadsheet and then complete the remaining section of the spreadsheet. Account Title d) Prepare the income statement. e) Prepare the statement of owner's equity. Unadjusted Trial Balance DR CR Adjustments DR CR Chapter 6 Adjusted Trial Balance DR CR GENERAL LEDGER Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Description Description Description Description Description Description PR PR PR PR PR PR DR DR DR DR DR DR CR CR CR CR CR CR GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Description Description Description Description Description Description Description PR PR PR PR PR PR PR DR DR DR DR DR DR DR CR CR CR CR CR CR CR GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance Chapter 6 f) Prepare the classified balance sheet. The Accounting Cycle: Statements and Closing Entries g) Prepare the journal entries for the adjustments and post them to the appropriate general ledger accounts. Date Account Title and Explanation Debit Credit PR The Accounting Cycle: Statements and Closing Entries h) Prepare the journal entries to close the books for the month of July 2018 (use the income summary account), and post the journal entries to the appropriate general ledger accounts, which start on the next page. JOURNAL Date Account Title and Explanation i) Create the post-closing trial balance. PR Debit Page 3 Credit Chapter 6 The Accounting Cycle: Statements and Closing Entries CS-1 LO 1234 Grindstone Paving provides residential and commercial paving services. Its balance sheet at the end of June 2018 is shown below, along with its chart of accounts. Jul 1 Jul 2 Jul 5 Jul 8 Jul 10 Jul 14 Jul 20 Assets Cash Accounts Receivable Prepaid Insurance Equipment Jul 22 Jul 24 Jul 28 Jul 30 Total Assets ASSETS Cash Account Description Accounts Receivable Prepaid Insurance Case Study LIABILITIES Accounts Payable Interest Payable Salary Payable Unearned Revenue Notes Payable Equipment Accumulated Depreciation-Equipment OWNER'S EQUITY Stone, Capital Stone, Withdrawals Income Summary Grindstone Paving Balance Sheet As at June 30, 2018 Liabilities $7,580 Accounts Payable 6,000 Unearned Revenue 1,800 Notes Payable 55,000 Total Liabilities Owner's Equity Stone, Capital $70,380 Total Liabilities and Owner's Equity Account # 101 105 110 120 125 200 205 210 215 220 300 310 315 Account Description For the month of July 2018, Grindstone Paving had the following transactions. The owner invested $8,000 cash into the business Received $2,530 cash for work that will be provided in August Received an advertising bill for $600, which will be paid next month Paid the $350 telephone bill with cash Provided $4,680 worth of services to customers who will pay later Purchased equipment with $8,200 cash REVENUE Service Revenue EXPENSES Advertising Expense Depreciation Expense Insurance Expense Interest Expense Salaries Expense Telephone Expense Received $2,350 in payment from customers paying their accounts Paid $1,970 toward accounts payable Paid $1,300 toward principal of the note payable Paid salary of $2,400 to an employee The owner withdrew $2,200 cash for personal use $15,800 6,200 22,000 44,000 26,380 $70,380 Account # 400 500 510 515 520 Chapter 6 545 550 Chapter 6 The Accounting Cycle: Statements and Closing Entries At the end of July, the following adjustments had to be journalized to properly report the balances of the company's accounts. Jul 31 Jul 31 Jul 31 Jul 31 Jul 31 One month of prepaid insurance worth $100 has been used Monthly depreciation on the equipment was $450 Unearned revenue worth $620 has now been earned Interest of $75 has accrued on the of the note payable Accrued salary expense of $500 for an employee Note: Of the remaining balance of the note payable, $5,000 will be paid within the next year. Required a) Enter the opening balances from the June 2018 balance sheet into the general ledger accounts (the ledger accounts are presented at the end of this question). b) Prepare the journal entries for the month of July and post them to the appropriate general ledger accounts. Date Account Title and Explanation PR Debit Credit The Accounting Cycle: Statements and Closing Entries c) Create the trial balance in the spreadsheet and then complete the remaining section of the spreadsheet. Account Title d) Prepare the income statement. e) Prepare the statement of owner's equity. Unadjusted Trial Balance DR CR Adjustments DR CR Chapter 6 Adjusted Trial Balance DR CR GENERAL LEDGER Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Description Description Description Description Description Description PR PR PR PR PR PR DR DR DR DR DR DR CR CR CR CR CR CR GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Account: Date Description Description Description Description Description Description Description PR PR PR PR PR PR PR DR DR DR DR DR DR DR CR CR CR CR CR CR CR GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance GL No: Balance Chapter 6 f) Prepare the classified balance sheet. The Accounting Cycle: Statements and Closing Entries g) Prepare the journal entries for the adjustments and post them to the appropriate general ledger accounts. Date Account Title and Explanation Debit Credit PR The Accounting Cycle: Statements and Closing Entries h) Prepare the journal entries to close the books for the month of July 2018 (use the income summary account), and post the journal entries to the appropriate general ledger accounts, which start on the next page. JOURNAL Date Account Title and Explanation i) Create the post-closing trial balance. PR Debit Page 3 Credit Chapter 6 The Accounting Cycle: Statements and Closing Entries CS-1 LO 1234 Grindstone Paving provides residential and commercial paving services. Its balance sheet at the end of June 2018 is shown below, along with its chart of accounts. Jul 1 Jul 2 Jul 5 Jul 8 Jul 10 Jul 14 Jul 20 Assets Cash Accounts Receivable Prepaid Insurance Equipment Jul 22 Jul 24 Jul 28 Jul 30 Total Assets ASSETS Cash Account Description Accounts Receivable Prepaid Insurance Case Study LIABILITIES Accounts Payable Interest Payable Salary Payable Unearned Revenue Notes Payable Equipment Accumulated Depreciation-Equipment OWNER'S EQUITY Stone, Capital Stone, Withdrawals Income Summary Grindstone Paving Balance Sheet As at June 30, 2018 Liabilities $7,580 Accounts Payable 6,000 Unearned Revenue 1,800 Notes Payable 55,000 Total Liabilities Owner's Equity Stone, Capital $70,380 Total Liabilities and Owner's Equity Account # 101 105 110 120 125 200 205 210 215 220 300 310 315 Account Description For the month of July 2018, Grindstone Paving had the following transactions. The owner invested $8,000 cash into the business Received $2,530 cash for work that will be provided in August Received an advertising bill for $600, which will be paid next month Paid the $350 telephone bill with cash Provided $4,680 worth of services to customers who will pay later Purchased equipment with $8,200 cash REVENUE Service Revenue EXPENSES Advertising Expense Depreciation Expense Insurance Expense Interest Expense Salaries Expense Telephone Expense Received $2,350 in payment from customers paying their accounts Paid $1,970 toward accounts payable Paid $1,300 toward principal of the note payable Paid salary of $2,400 to an employee The owner withdrew $2,200 cash for personal use $15,800 6,200 22,000 44,000 26,380 $70,380 Account # 400 500 510 515 520 Chapter 6 545 550
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College Accounting A Practical Approach
ISBN: 978-0132564441
11th Canadian Edition
Authors: Jeffrey Slater, Brian Zwicker
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