Overview

Case Study Journal Ledger Worksheet Adjustments Statements Closing Entries Post-Closing Trial Balance

Sheet 1: Case Study

Case	Accounting Cycle
BW Travel and Tours is a travel agency that offers international and local travel packages. The company is owned and operated by Bryson Woods. The closing balances at the end of August 2021 and the chart of accounts are shown below.
BW Travel and Tours	Bryson	Woods	2021
BW Travel and Tours
Balance Sheet
As at August 31, 2021
Assets		Liabilities
Cash	$14,230	Accounts Payable	$11,700
Accounts Receivable	$8,520	Unearned Revenue	$16,200
Prepaid Insurance	$0	Bank Loan	$25,000
Equipment	$65,800
Accumulated Depreciation	-$9,600	Total Liabilities	$52,900
				Woods Capital			$26,050
Total Assets	$78,950	Total Liabilities & Owners' Equity	$78,950
Account Description	Account #		Account Description	Account #
ASSETS			REVENUE
Cash	101		Service Revenue	400
Accounts Receivable	105		EXPENSES
Prepaid Insurance	110		Advertising Expense	500
Equipment	120		Depreciation Expense	510
Accumulated Depreciation	125		Insurance Expense	515
LIABILITIES			Interest Expense	520
Accounts Payable	200		Salaries Expense	545
Interest Payable	205		Telephone Expense	550
Salary Payable	210		Travel Expense	555
Unearned Revenue	215		Rent Expense	560
Bank Loan	220
OWNER'S EQUITY
Woods Capital	300
Woods Withdrawals	310
Income Summary	315
For the month of September 2021, BW Travel and Tours had the following transactions:
Sept 1	Bryson invested $15,000 cash and equipment valued at $12,500 into the business.	$15,000	12500
Sept 1	Prepaid $4,500 for insurance for one year.	$4,500
Sept 1	Paid $1,950 cash for September's rent.	$1,950
Sept 2	Provided travel package to group of travellers; they paid $22,500 now and will pay $4,500 later.	$22,500	4500
Sept 5	Recorded travel expenses for $9,100 to be paid next month.	$9,100
Sept 11	Purchased equipment with $13,000 cash.	$13,000
Sept 15	Paid $5,850 cash to reduce the balance of accounts payable.	$5,850
Sept 18	Received $4,260 cash from customers for the travel services provided last month.	$4,260
Sept 20	Received a telephone bill for $880 which will be paid next month.	$880
Sept 23	Paid $4,150 cash for employee's salaries.	$4,150
Sept 26	Received $26,700 cash in advance from travellers for travel services to be provided next month.	$26,700
Sept 28	Paid $2,530 advertising expense for the promotion of the travel and tours in the month of September.	$2,530
Sept 29	The owner withdrew $6,550 cash for personal use.	$6,550
Sept 30	Paid $833 cash for the bank loan which included $625 principle and $208 interest.	$625	$208
Sept 30	Received a loan from the bank for $20,000	$20,000
	Note: This amount is due in 2 years plus accrued interest at 10%
At the end of September, the following adjustment had to be journalized to properly report the balances of the company's accounts:
Sept 30	$31,560 of the balance of unearned revenue, still remains unearned.	$4,860
Sept 30	BW Travel and Tours billed a group of travellers for additonal travel services. This package is amounting to $8,200. They agreed to pay next month.
8200
Sept 30	One month of prepaid insurance worth $375 has been used.	$375
Sept 30	Monthly depreciation on the equipment was $1,270.	$1,270
Sept 30	Accrued salary expense of $2,075 for an employee.	$2,075
The bank loan is payable over 6 years and $625 monthly payment.
		6	$45,000	625
Required:
a) Enter the opening balances from the August 2021 balance sheet into the general ledger accounts.
b) Prepare the journal entries for the month of September and post them to the appropriate general ledger accounts.
c) Create the trial balance in the worksheet, and then complete the remaining section of the worksheet.
d) Prepare the journal entries for the adjustments and post them to the appropriate general ledger accounts.
e) Create the income statement, statement of owner's equity and the classified balance sheet.
f) Prepare the journal entries to close the books for the month of September 2021 (use the income summary account), and post the journal entries to the appropriate general ledger accounts.
g) Create the post-closing trial balance.

Sheet 2: Journal

								Page 1
Date	Account Title and Explanation	PR	DR	CR
				Page 2
Date	Account Title and Explanation	PR	DR	CR

Sheet 3: Ledger

Account:	Cash						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Accounts Receivable						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Prepaid Insurance						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Equipment						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Accumulated Depreciation						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Accounts Payable						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Interest Payable						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Salary Payable						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Unearned Revenue						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Bank Loan						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Woods Capital						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
	Opening Balance
Account:	Woods Withdrawals						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Income Summary						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Service Revenue						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Advertising Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Depreciation Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Insurance Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Interest Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Salaries Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Telephone Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Travel Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)
Account:	Rent Expense						GL No:
Date	Description	PR	DR	CR	Balance (DR or CR)

Sheet 4: Worksheet

BW Travel and Tours
Worksheet
September 30, 2021
	Unadjusted Trial Balance	Adjustments	Adjusted Trial Balance	Income Statement	Balance Sheet
Account Titles	DR	CR	DR	CR	DR	CR	DR	CR	DR	CR

Sheet 5: Adjustments

								Page 3
Date	Account Title and Explanation	PR	DR	CR

Sheet 6: Statements

BW Travel and Tours
Income Statement
For the Month Ended September 30, 2021
BW Travel and Tours
Statement of Owner's Equity
For the Month Ended September 30, 2021
BW Travel and Tours
Balance Sheet
As at September 30, 2021

Sheet 7: Closing Entries

								Page 4
Date	Account Title and Explanation	PR	DR	CR

Sheet 8: Post-Closing Trial Balance

BW Travel and Tours
Post-Closing Trial Balance
September 30, 2021
Account Titles	DR	CR