Accounting 251

Fall 2014 - ACCT 251

Practice Set

Worth 100 points

Contents:

Instructions

Chart of Accounts

Part 1 – Due Monday, September 29^th (worth 50 points)

Journal Entries for External Transactions

T Accounts

Journal Entries for Adjusting Entries

Adjusted Trial Balance

Part 2 – Due Monday, November 10^th (worth 50 points)

Multi-step Income Statement

Statement of Retained Earnings

Classified Balance Sheet

Journal Entries Closing Entries

T Accounts

Post-Closing Trial Balance

Ratios

Name:______________________________________

Instructions

Work practice set in pencil, scan, and submit as a file attachment or

Type your work in the space provided and submit as a file attachment or

Use your own format in word or excel and submit as a file attachment or

The correct Adjusted Trial Balance will be posted after the Part 1 due date so you can correct any errors in your Adjusted Trial Balance before beginning Part 2.

Part 1 (Due Monday, September 29^th)

1. Prepare journal entries to record external transactions.

2. Post journal entries to T accounts.

3. Prepare journal entries to record adjusting entries.

4. Post the adjusting entries to the T accounts from step 2 (include a balance on each account)

5. Prepare an adjusted trial balance.

Part 2 (Due Monday, November 10^th)

6. Prepare, using good form, a multi-step income statement, a statement of retained earnings, and a classified balance sheet.

7. Prepare closing journal entries.

8. Post the closing entries to the T accounts from step 2 (include a new balance on each account)

9. Prepare a post closing trial balance.

10. Calculate ratios.

Cook, Books, and Hyde Bookkeeping Services Chart of Accounts

Account Name

Cash

Accounts Receivable

Allowance for Doubtful Accounts

Prepaid Rent

Office Equipment

Accumulated Depreciation – Office Equipment

Accounts Payable

Salaries Payable

Interest Payable

Unearned Revenue

Notes Payable

Common Stock

Retained Earnings

Dividends

Bookkeeping Revenue

Operating Expenses

Salaries Expense

Depreciation Expense

Interest Expense

Rent Expense

Bad Debt Expense

Income Summary

Cook, Books, and Hyde Bookkeeping Services External Transactions

Cook, Books, and HydeBookkeeping Services is organized on January 1, 2014. The following transactions occurred in their first year of operations.

Date	Transaction
January 1, 2014	Issued 5,000 shares of common stock for $20.00 per share.
January 1, 2014	Purchased office equipment for $26,000 cash.
January 1, 2014	Paid $9,000 in advance for 18 months of rent.
July 1, 2014	Borrowed $70,000 cash from Fly By Night Bank, signing a 5 year, 6% interest bearing note. Interest is payable annually on June 30. The note matures June 30, 2019.
Jan 1- Dec 31 2014	Performed bookkeeping services on account & billed clients $280,000.
Jan 1- Dec 31 2014	Collected $210,000 of billings.
December 15, 2014	Received $75,000 cash advance for bookkeeping to be performed in December and January.
Jan 1- Dec 31 2014	Incurred $84,000 of operating expenses on account.
Jan 1- Dec 31 2014	Paid $62,000 of the expenses incurred on account.
Jan 1- Dec 31 2014	Paid $43,000 of salaries.
December 31, 2014	Declared and paid $1.25 per share dividend on the common stock

Cook, Books, and Hyde Bookkeeping Services Adjusting Entries

Date	Transaction
December 31, 2014	Depreciated the office equipment, estimated life 4 years, estimated salvage value $6,000, straight line depreciation.
December 31, 2014	Earned $35,000 of the $75,000 advance for bookkeeping.
December 31, 2014	Salaries of $2,750 earned in the last week in December will be paid January 3, 2015.
December 31, 2014	Accrue interest on the Community Bank note.
December 31, 2014	Record the expiration of a portion of prepaid rent.
December 31, 2014	3% of the ending balance in accounts receivable is estimated to become uncollectible.

11 years ago

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Accounting 251-Practice sheet

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