Review accounting documentation and make sure everything is correct, then fill in empty areas of the sheet.

REMEMBER: Requirement 7 & 9 give the answer that you need to get to, all you must do is fillout the data to get to the answer properly.

Requirement #1:

During its first month of operation, the Quick Tax Corporation, which specializes in tax preparation,

completed the following transactions.

July 1

Began business by making a deposit in a company bank account of $40,000, in exchange

for 4,000 shares of $10 par value common stock.

July 3

Paid the current month's rent, $2,500

July 5

Paid the premium on a 1-year insurance policy, $3,600

July 7

Purchased supplies on account from Little Company, $700.

July 10

Paid employee salaries, $2,800

July 14

Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was

placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.

Note: Use accounts payable for the balance due.

July 15

Received cash for preparing tax returns for the first half of July, $6,500

July 19

Made payment on account to Lake Company, $500.

July 31

Received cash for preparing tax returns for the last half of July, $8,250

July 31

Declared and paid cash dividends of $450.

Prepare journal entries to record the July transactions in the General Journal below.

Use the following account names for journal entries.

General Journal

Chart of Accounts: Account Title (Normal Balance)

Date

Description(Account Name)

Debit

Credit

1-Jul

Cash

40,000

Assets

Common Stock

40,000

Cash (Debit)

Prepaid Insurance (Debit)

3-Jul

Rent

2,500

Supplies (Debit)

Cash

2,500

Equipment (Debit)

Accumulated Depreciation - Equipment (Credit)

5-Jul

Insurance Expense

3,600

Cash

3,600

Liabilities

Accounts Payable (Credit)

Income Tax Payable (Credit)

Stockholders' Equity

7-Jul

Supplies

700

Common Stock (Credit)

Accounts Payable

700

Retained Earnings (Credit)

Dividends (Debit)

10-Jul

Salary

2,800

Cash

2,800

Revenue

Tax Preparation Revenue (Credit)

14-Jul

Equipment

9,500

Cash

1,500

Expenses

Accounts Payable

8,000

Rent Expense (Debit)

Salaries Expense (Debit)

15-Jul

Cash

6,500

Insurance Expense (Debit)

Tax Preparation Revenue

6,500

Supplies Expense (Debit)

Depreciation Expense (Debit)

19-Jul

Accounts Payable

500

Income Tax Expense (Debit)

Cash

500

31-Jul

Cash

8,250

Tax Preparation Revenue

8,250

31-Jul

Dividend

450

Cash

450

74,800

74,800

Note: Remember that debits must equal creditsAll of your journal entries should balance.

This Sheet will be used for Requirements 2, 5, and 9.

Requirement #2:

Post the July journal entries to the following T-accounts and compute ending balances.

Cash (111)

Tax Preparation Revenue

40,000

6,500

2,500

8,250

3,600

2,800

1,500

6,500

500

8,250

450

Prepaid Insurance (117)

Rent Expense (511)

3600

2,500

Supplies (119)

Salaries Expense (512)

700

2800

Equipment (144)

Insurance Expense (513)

9,500

3,600

Accumulated Depreciation-Equipment (145)

Supplies Expense (514)

Accounts Payable (212)

Depreciation Expense (515)

700

500

Income Tax Payable (213)

Income Tax Expense (516)

Common Stock (311)

40,000

Retained Earnings (312)

Dividends (313

450

Requirement #3:
Prepare a trial balance for July in the space below.
Quick Tax Corporation
Trial Balance
July 31
	Debit	Credit
Cash	$ 43,400.00
Prepaid Insurance	$ 3,600.00
Supplies	$ 700.00
Equipment	$ 9,500.00
Account Payable		$ 8,200.00
Common Stock		$ 40,000.00
Dividend	$ 450.00
Tax Preparation Revenue		$ 14,750.00
Store Rent Expense	$ 2,500.00
Salaries Expense	$ 2,800.00
Total	$ 62,950.00	$ 62,950.00

Requirement #4:
Prepare adjusting entries using the following information in the General Journal
below. Show your calculations!
a) One month's insurance has expired.
b) The remaining inventory of supplies is $300.
c) The estimated depreciation on equipment is $125.
d) The estimated income taxes are $2700.
		General Journal
Date	Description (Account Name)			Debit	Credit
July 31st	Insurance Expense			$ 300.00
	Prepaid Insurance				$ 300.00
	($3,600/12 mo.)
July 31st	Supplies Expense			$ 400.00
	Supplies				$ 400.00
	($700-$300)
July 31st	Depreciation Expenses Equipment			$ 125.00
	Accumulated Deprec. Equipment				$ 125.00
July 31st	Income Tax Expense			$ 2,700.00
	Income Tax Payable				$ 2,700.00
Requirement #5:
Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.
Just add to the balances that are already listed.
Insurance Expense			Prepaid Insurance
300				300
Supplies Expense			Supplies
	400		400
Depreciation Expenses Equipment			Accumulated Deprec. Equipment
125				125
Income Tax Expense			Income Tax Payable
2,700				2,700

Requirement #6:

Prepare an adjusted trial balance in the space below.

Quick Tax Corporation

Adjusted Trial Balance

July 31

Debit

Credit

Cash

$ 43,400.00

Prepaid Insurance

$ 3,600.00

Supplies

$ 700.00

Equipment

$ 9,500.00

Account Payable

$ 8,200.00

Common Stock

$ 40,000.00

Dividend

$ 450.00

Tax Preparation Revenue

$ 14,750.00

Store Rent Expense

$ 2,500.00

Salaries Expense

$ 2,800.00

Depreciation Expenses Equipment

$ 125.00

Accumulated Deprec. Equipment

$ 125.00

Income Tax Expense

$ 2,700.00

Income Tax Payable

$ 2,700.00

$ 65,775.00

$ 65,775.00

Requirement #7:

Prepare the financial statements for the Quick Tax Corporation as of July 31 in the space below.

You will only be preparing the income statement, statement of retained earnings, and the balance sheet.

The statement of cash flows is a required financial statement, but is not required for this case study.

Quick Tax Corporation

Quick Tax Corporation

Quick Tax Corporation

Income Statement

Statement of Retained Earnings

Balance Sheet

For the Month Ending July 31

For the Month Ending July 31

July 31

Revenues:

Retained Earnings, July 1

Assets:

Revenue

Add: Net Income

Cash

Subtotal

Supplies

Expenses:

Less: Dividends

Prepaid Insurance

Rent Expense

Retained Earnings, July 31

$ 5,475

Equipment

Salaries Expense

Less: Accum. Depr.

Insurance Expense

Total Assets

56,375

Supplies Expense

Depreciation Expense

Liabilities:

Income Tax Expense

Accounts Payable

Total Expenses

Income Tax Payable

Total Liabilities

Net Income

$ 5,925

Stockholders' Equity:

Common Stock

Retained Earnings

Total Stockholders' Equity

Total Liabilities and

Stockholders' Equity

$ 56,375

Requirement #8:
Prepare the closing entries at July 31 in the General Journal below.
		General Journal
Date	Description (Account Name)			Debit	Credit
Requirement #9:
Post the closing entries to the General Ledger T-accounts and compute ending balances.
Just add to the adjusted balances already listed.

Requirement #10:
Prepare a post-closing trial balance as of July 31 in the space below.
Quick Tax Corporation
Post-Closing Trial Balance
July 31
	$ 56,500.00	$ 56,500.00