Performance Task 1 BERRIGAN ENTERPRISES What Learning You Will Demonstrate You will: demonstrate an understanding of the recording and decision-making aspects of accounting for a service company, demonstrate an understanding of the basic accounting cycle procedures and principles for a service business, without adjusting and closing entries; demonstrate an understanding of the debit/credit theory in recording transactions in the journals and the ledgers of a service business; and demonstrate the skills necessary to prepare a trial balance, a six-column work sheet, and the financial statements of a service business (without adjustments). . . . The Business Linda Berrigan operates a real estate agency that earns money from three sources: . commissions on sales of property; D property management fees; and investment income. The agency earns management fees from renting and maintaining homes and condominiums for owners who lease their properties to tenants. Berrigan has invested past net income (profits) in stocks and bonds. Interest and dividends received on these investments are recorded in the Investment Income account. The Task You have been hired as the accountant for Berrigan Enterprises. The company has not had an accountant for a month. You are given the transactions for May and asked to bring the records up to date. Suggested Procedure 1. Set up a general ledger with the appropriate accounts and balances. 2. Journalize and post the May entries. 3. Prepare a trial balance and a work sheet. 4. Prepare an income statement, a statement of owner's equity, and a classified balance sheet. Materials Required May financial information . Forms for the journal, the ledger, the work sheet, and the financial statements Assessment Criteria 1. Examine the assessment rubric. Note the descriptions of the performance criteria and the levels of achievement. 2. Based on a self-assessment of your completion of the task, would the company offer you a permanent job? Justify your opinion. Berrigan Enterprises Chart of Accounts 100 Cash 131 Office Supplies 141 Furniture and Equipment 142 Automobile 170 Investments 200 Accounts Payable/Tom's Service 201 Accounts Payable/Wilson's Stationery 210 Bank Loan 300 Linda Berrigan, Capital 301 Linda Berrigan. Drawings 400 Commissions Income 401 Management Fees Earned 402 Investment Income 500 Advertising Expense 501 Automobile Expense 502 Commissions Expense 503 Rent Expense 504 Salaries Expense 505 Telephone Expense 506 Utilities Expense 507 Donations Expense Opening Account Balances Cash Office Supplies Furniture and Equipment Automobile Investments Bank Loan Linda Berrigan, Capital $6.500 700 10 000 27 100 40 000 20 000 64 300 May Transactions May 2 2 Received $4000 commission for the sale of property, Contract 79. Paid $1700 for the month's rent for the office, Cheque 631. 3 Received a bill for Tom's Service Centre for $295 for gas, oil, and repairs to the company automobile. Invoice 241 is to be paid on May 15. 4 5 contact forms Received $5000 commission for the sale of property, Contract 80. Received a bill for $450 for printing letterhead, envelopes, and sales from Wilson's Stationery. Invoice 1469 is to be paid on May 15. Paid $350 for a new filing cabinet for the office, Cheque 632. Received $8000 commission for the sale of property, Contract 81. Paid office salaries, $900, Cheque 633. Paid $690 to the Spectator for newspaper advertising, Cheque 634. Received a $300 fee for renting a home, client's Cheque 102. L. Berrigan, the owner, withdrew $1000 for personal use, Cheque 635. 14 Received commissions totaling $ 15,500 from the sale of properties, Contracts 82, 83, and 84. 14 Paid Bell Canada $175 for the telephone bill, Cheque 636. 15 Paid Tom's Service Centre for the invoice of May 3, Cheque 637. 15 Paid Wilson's Stationery for the invoice of May 5, Cheque 638. Paid $350 for the hydro bill, Cheque 639. Donated $100 to charity, Cheque 640. Received $400 in dividends from investments owned. 642. 8 8 11 12 13 5555 15 15 15 15 Purchased $5000 worth of Government of Canada bonds, Cheque 641. Paid $5000 to Dell Computers for a new computer system, Cheque 15 Paid office salaries, $900, Cheque 643. 15 Paid $5000 in commissions to Berrigan Enterprises sales people, Cheques 643 to 647. Assessment Criteria KNOWLEDGE AND UNDERSTANDING undentanding of the recording and decision making aspects of accounting undentanding of the debit/credit theory in recording transactions in joumals and ledgers of a service business THINKING AND INQUIRY analysis of transactions interpretation of balance sheets COMMUNICATION completion of appropriate forms and statements APPLICATION application of skills to prepare trial balances and financial statements BERRIGAN ENTERPRISES: Performance Task Rubric Levels of Achievement Level 1 Demonstrates limited understanding of terminology concepts procedures, and prociples Uses critical and interpretative skills with limited effectivenes Applies few of the skills in an inquiry, or problem solving process Communicates with minimal precision and darity. Uses skills with limited accuracy Level 2 Demonstrates some understanding of terminology, concepti procedures and principles Uses critical and interpretative skills with moderate effectiveness Applies some of the skolls in an inquiry, or problem solving process Level 3 Ubes skills with some accuracy Demonstrates contiderable understanding of terminology, concepts procedures and principles Uses critical and interpretative skills with considerable effectiveness Applies most of the skills in an inquiry, or problem solving process. Communicates with some Communicates with precision and clarity. considerable precision and clarity thes skills with considerable accuracy Level 4 Demonstrates a thorough understanding of terminology, concepts procedures, and principles Uses critical and interpretative skills with complete effectiveness Applies all or almost all skolls in an inquiry, or problem-solving process Communicates with complete and thorough precision and clarity. Uses skills with a high degree of accuracy Performance Task 1 BERRIGAN ENTERPRISES What Learning You Will Demonstrate You will: demonstrate an understanding of the recording and decision-making aspects of accounting for a service company, demonstrate an understanding of the basic accounting cycle procedures and principles for a service business, without adjusting and closing entries; demonstrate an understanding of the debit/credit theory in recording transactions in the journals and the ledgers of a service business; and demonstrate the skills necessary to prepare a trial balance, a six-column work sheet, and the financial statements of a service business (without adjustments). . . . The Business Linda Berrigan operates a real estate agency that earns money from three sources: . commissions on sales of property; D property management fees; and investment income. The agency earns management fees from renting and maintaining homes and condominiums for owners who lease their properties to tenants. Berrigan has invested past net income (profits) in stocks and bonds. Interest and dividends received on these investments are recorded in the Investment Income account. The Task You have been hired as the accountant for Berrigan Enterprises. The company has not had an accountant for a month. You are given the transactions for May and asked to bring the records up to date. Suggested Procedure 1. Set up a general ledger with the appropriate accounts and balances. 2. Journalize and post the May entries. 3. Prepare a trial balance and a work sheet. 4. Prepare an income statement, a statement of owner's equity, and a classified balance sheet. Materials Required May financial information . Forms for the journal, the ledger, the work sheet, and the financial statements Assessment Criteria 1. Examine the assessment rubric. Note the descriptions of the performance criteria and the levels of achievement. 2. Based on a self-assessment of your completion of the task, would the company offer you a permanent job? Justify your opinion. Berrigan Enterprises Chart of Accounts 100 Cash 131 Office Supplies 141 Furniture and Equipment 142 Automobile 170 Investments 200 Accounts Payable/Tom's Service 201 Accounts Payable/Wilson's Stationery 210 Bank Loan 300 Linda Berrigan, Capital 301 Linda Berrigan. Drawings 400 Commissions Income 401 Management Fees Earned 402 Investment Income 500 Advertising Expense 501 Automobile Expense 502 Commissions Expense 503 Rent Expense 504 Salaries Expense 505 Telephone Expense 506 Utilities Expense 507 Donations Expense Opening Account Balances Cash Office Supplies Furniture and Equipment Automobile Investments Bank Loan Linda Berrigan, Capital $6.500 700 10 000 27 100 40 000 20 000 64 300 May Transactions May 2 2 Received $4000 commission for the sale of property, Contract 79. Paid $1700 for the month's rent for the office, Cheque 631. 3 Received a bill for Tom's Service Centre for $295 for gas, oil, and repairs to the company automobile. Invoice 241 is to be paid on May 15. 4 5 contact forms Received $5000 commission for the sale of property, Contract 80. Received a bill for $450 for printing letterhead, envelopes, and sales from Wilson's Stationery. Invoice 1469 is to be paid on May 15. Paid $350 for a new filing cabinet for the office, Cheque 632. Received $8000 commission for the sale of property, Contract 81. Paid office salaries, $900, Cheque 633. Paid $690 to the Spectator for newspaper advertising, Cheque 634. Received a $300 fee for renting a home, client's Cheque 102. L. Berrigan, the owner, withdrew $1000 for personal use, Cheque 635. 14 Received commissions totaling $ 15,500 from the sale of properties, Contracts 82, 83, and 84. 14 Paid Bell Canada $175 for the telephone bill, Cheque 636. 15 Paid Tom's Service Centre for the invoice of May 3, Cheque 637. 15 Paid Wilson's Stationery for the invoice of May 5, Cheque 638. Paid $350 for the hydro bill, Cheque 639. Donated $100 to charity, Cheque 640. Received $400 in dividends from investments owned. 642. 8 8 11 12 13 5555 15 15 15 15 Purchased $5000 worth of Government of Canada bonds, Cheque 641. Paid $5000 to Dell Computers for a new computer system, Cheque 15 Paid office salaries, $900, Cheque 643. 15 Paid $5000 in commissions to Berrigan Enterprises sales people, Cheques 643 to 647. Assessment Criteria KNOWLEDGE AND UNDERSTANDING undentanding of the recording and decision making aspects of accounting undentanding of the debit/credit theory in recording transactions in joumals and ledgers of a service business THINKING AND INQUIRY analysis of transactions interpretation of balance sheets COMMUNICATION completion of appropriate forms and statements APPLICATION application of skills to prepare trial balances and financial statements BERRIGAN ENTERPRISES: Performance Task Rubric Levels of Achievement Level 1 Demonstrates limited understanding of terminology concepts procedures, and prociples Uses critical and interpretative skills with limited effectivenes Applies few of the skills in an inquiry, or problem solving process Communicates with minimal precision and darity. Uses skills with limited accuracy Level 2 Demonstrates some understanding of terminology, concepti procedures and principles Uses critical and interpretative skills with moderate effectiveness Applies some of the skolls in an inquiry, or problem solving process Level 3 Ubes skills with some accuracy Demonstrates contiderable understanding of terminology, concepts procedures and principles Uses critical and interpretative skills with considerable effectiveness Applies most of the skills in an inquiry, or problem solving process. Communicates with some Communicates with precision and clarity. considerable precision and clarity thes skills with considerable accuracy Level 4 Demonstrates a thorough understanding of terminology, concepts procedures, and principles Uses critical and interpretative skills with complete effectiveness Applies all or almost all skolls in an inquiry, or problem-solving process Communicates with complete and thorough precision and clarity. Uses skills with a high degree of accuracy