Ratio Analysis
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spreadsheet.xlsxProject Instructions
Comprehensive Problem Complete the following: • Journal entries • Posting to T-accounts • Trial balance • Adjusting entries • Adjusting trial balance • Income statement • Statement of retained earnings • Balance sheet and closing entries
April Transactions
| s | During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs, completed the following transactions: |
Chart of Accounts
| Chart of accounts description for posting to journal entries. | |||
| Chart of Accounts | |||
| Account Type | Account Number | Account Title | |
| Assets | |||
| 101 | Cash | ||
| 105 | Accounts Receivable | ||
| 107 | Prepaid Insurance | ||
| 109 | Supplies | ||
| 145 | Equipment | ||
| 146 | Accum Dep - Equipment | ||
| Liabilities | |||
| 202 | Accounts Payable | ||
| 203 | Income Tax Payable | ||
| 204 | Salary Payable | ||
| Stockholders' Equity | |||
| 301 | Common Stock | ||
| 302 | Retained Earnings | ||
| 303 | Dividends | ||
| Revenue | |||
| 401 | Revenue | ||
| Expenses | |||
| 501 | Rent Expense | ||
| 502 | Utility Expense | ||
| 503 | Insurance Expense | ||
| 504 | Supplies Expense | ||
| 505 | Dep Expense - Equipment | ||
| 506 | Income Tax Expense | ||
| 507 | Salary Expense |
Journal Entries
| Prepare journal entries to record the April transactions in the General Journal below. | |||
| General Journal | |||
| General Journal | |||
| Date | Description (Account Name) | Debit | Credit |
| 1-Apr | capital | $150,000 | |
| cash | $100,000 | ||
| equipment | $50,000 | ||
| 2-Apr | cash | $1,200 | |
| prepaid insurane | $1,200 | ||
| 3-Apr | rent expense | $1,200 | |
| cash | $1,200 | ||
| 5-Apr | cash | $8,000 | |
| revenue | $8,000 | ||
| 10-Apr | account receivable | $15,000 | |
| revenue | $15,000 | ||
| 11-Apr | equipment | $5,000 | |
| supplies | $3,000 | ||
| account payable | $8,000 | ||
| 15-Apr | salary expense | $1,500 | |
| cash | $1,500 | ||
| 24-Apr | cash | $300 | |
| utility expense | $300 | ||
| 28-Apr | dividends | $2,000 | |
| cash | $2,000 | ||
| $187,200 | $187,200 | ||
| 374,400 | 374,400 | ||
Journal Entries
General Ledger
| Post the April journal entries to the following T-Accounts, and compute ending balances. | ||||
| cash (101) DeVry: The balance of the Cash account after posting journal entries for Part A should be $10,718. | capital | |||
| capital $100,000 | prepaid insurance $1,200 | bal c/d $150,000 | equipment $50,000 | |
| service revenue $8,000 | rent expense $1,200 | Cash $100,000 | ||
| salary expense $1,500 | 150,000 | 150,000 | ||
| utility expense $300 | balance $150,000 | |||
| dividends $2,000 | ||||
| balance $ 101,800 | ||||
| equipment (145) | prepaid Insurance (107) | |||
| Retained Earnings $50,000 | cash $1,200 | bal c/d $1,200 | ||
| account payable $5,000 | ||||
| balance $1,200 | ||||
| balance $55,000 | ||||
| rent expense( 501) | service revenue (401) | |||
| cash $1,200 | cash $8,000 | |||
| account receivable $15,000 | ||||
| balance $1,200 | balance $23,000 | |||
| supplies(109) | salary expense(507) | |||
| accounts payable $3,000 | cash $1,500 | |||
| balance $3,000 | balance $1,500 | |||
| utility expense(502) | dividends(303) | |||
| cash $300 | cash $2,000 | |||
| balance $300 | balance $2,000 | |||
| account payable(202) | account receivable(105) | |||
| equipment $5,000 | revenue $15,000 | |||
| supplies $3000 | ||||
| balance $8,000 | balanc $15,000 | |||
| Accum Dep - Equipment(146) | Income Tax Payable(203) | |||
| 0 | 0 | |||
| Common Stock (301) | Insurance Expense(503) | |||
| 0 | 0 | |||
| Supplies Expense (504) | Dep Expense - Equipment(505) | |||
| 0 | 0 | |||
| Income Tax Expense (506) | Salary Payable(204) | |||
| 0 | 0 | |||
Trial Balance
| Prepare a trial balance for April. | |||
| Adjusting Entries | |||
| Date | Description (Account Name) | Debit | Credit |
| 30-Apr | cash | $101,800 | |
| 30-Apr | capital | $150,000 | |
| 30-Apr | equipment | $55,000 | |
| 30-Apr | prepaid insurancre | $1,200 | |
| 30-Apr | rent expense | $1,200 | |
| 30-Apr | service revenue | $23,000 | |
| 30-Apr | supplies | $3,000 | |
| 30-Apr | salary expense | $1,500 | |
| 30-Apr | utility expense | $300 | |
| 30-Apr | dividends | $2,000 | |
| 30-Apr | account payable | $8,000 | |
| 30-Apr | account receivable | $15,000 | |
| $181,000 | $181,000 | ||
Journal Entries
Adjusting Entries
| Prepare the following adjusting journal entries for April 30: | |||
| • Insurance expired for the month of April. | |||
| • An ending count of supplies totaled $2,600. | |||
| • Wages of $3,000 were earned but not paid. | |||
| • Services in the amount of $5,000 were earned but not billed. | |||
| • Depreciaiton on the equipment is $500 per month. | |||
| Adjusting Entries | |||
| Date | Description (Account Name) | Debit($) | Credit($) |
| 30-Apr | prepaid insurance | 1,100 | |
| insurance expense | 1,100 | ||
| 30-Apr | supplies expense | 400 | |
| supplies | 400 | ||
| 30-Apr | salaries expense | 3,000 | |
| salaries payable | 3,000 | ||
| 30-Apr | accounts receivable | 5,000 | |
| acrrued revenue | 5,000 | ||
| 30-Apr | depreciation expense | 500 | |
| accumulated depreciation | 500 | ||
| 10,000 | 10,000 | ||
Journal Entries
Adjusted TB
| Prepare an Adjusted Trial Balance. | |||
| Adjusted Trial Balance | |||
| Date | Description (Account Name) | Debit | Credit |
| 30-Apr | cash | $101,800 | |
| 30-Apr | capital | $150,000 | |
| 30-Apr | equipment | $55,000 | |
| 30-Apr | insurance expense | $100 | |
| 30-Apr | rent expense | $1,200 | |
| 30-Apr | service revenue | $23,000 | |
| 30-Apr | supplies | $2,600 | $400 |
| 30-Apr | salary expense | $1,500 | |
| 30-Apr | utility expense | $300 | |
| 30-Apr | dividends | $2,000 | |
| 30-Apr | account payable | $8,000 | |
| 30-Apr | account receivable | $20,000 | |
| 30-Apr | prepaid insurance | 1,100 | 100 |
| 30-Apr | supplies expense | 400 | |
| 30-Apr | salaries payable | 3,000 | |
| 30-Apr | supplies | 400 | |
| 30-Apr | accumulated depreciation | 500 | |
| 30-Apr | depreciation expense | 500 | |
| insurance expense | 1,100 | ||
| 186,500 | 186,500 | ||
Journal Entries
Income Statement
| Prepare the Income Statement in the proper format for April 30. | |||||
| Rawls Repair Corporation | |||||
| Income Statement | |||||
| For the Month of April | |||||
| Revenues: | |||||
| service revenue | 23,000 | 23,000 | |||
| 23,000 | |||||
| expenses: | |||||
| salaries | $ 1,500 | ||||
| utility | $ 300 | ||||
| rent | $ 1,200 | ||||
| depreciation | $ 500 | ||||
| supplies | $ 2,600 | ||||
| insurance expense | $ 100 | ||||
| 6,200 | |||||
| total expenses | |||||
| net icome | 16,800 | ||||
Retained Earnings
| Prepare the Retained Earning statement in the proper format for April 30. | ||
| Statement of Retained Earnings | ||
| Retained Earnings, | 0 | |
| Add: Net Income | 16,800 | |
| Subtotal | 16,800 | |
| Less: Dividends | (2,000) | |
| Retained Earnings | 14,800 | |
Balance Sheet
| Prepare the Balance Sheet in the proper format for April 30. | ||
| Balance Sheet | ||
| Assets: | ||
| cash | 102,100 | |
| prepaid insurance | 1,100 | |
| supplies | 2,600 | |
| equipment | 55,000 | |
| accounts receivable | 15,000 | |
| Total Assets | 175,800 | |
| Liabilities and Stockholders' Equity | ||
| Liabilities: | ||
| accounts payable | 8,000 | |
| accrued salaries | 3,000 | |
| Total Liabilities | 11,000 | |
| Stockholders' Equity: | ||
| retained earnings | 14,800 | |
| capital | 150,000 | |
| Total Stockholders' Equity | 164,800 | |
| Total Liabilities and Stockholders' Equity | 175,800 | |
Closing Entries
| Prepare the closing entries at April 30. | |||
| Post the closing entries to the T-Accounts on the General Ledger worksheet, and compute ending balances. | |||
| Date | Description (Account Name) | Debit | Credit |
| 30-Apr | revenue | 23,000 | |
| income summary | |||
| service revenue | 23,000 | ||
| 30-Apr | income summary | 6,200 | |
| rent expense | 1,200 | ||
| utility expense | 300 | ||
| insurance expense | 100 | ||
| supplies | 2,600 | ||
| depreciation expense | 500 | ||
| salaries expens | 1,500 | ||
| 30-Apr | income summary | 14,800 | |
| retained earning | 14,800 | ||
| 30-Apr | retained earning | 2,000 | |
| dividend | 2,000 | ||
| 46,000 | 46,000 | ||
Journal Entries
Postclosing Trial Balance
| Prepare a postclosing trial balance as of April 30 in the space below. | |||
| Date | Description (Account Name) | Debit | Credit |
| 1-May | cash | 101,800 | |
| equipment | 54,500 | ||
| supplies | 2,600 | ||
| accounts payable | 8,000 | ||
| accumulated depreciation | 500 | ||
| prepaid insurance | 1,100 | ||
| retained eanings | 14,800 | ||
| dividends | 2,000 | ||
| capital | 150,000 | ||
| account receivable | 15,000 | ||
| utility | 300 | ||
| 175,300 | 175,300 | ||
Journal Entries
Jim opened Jim’s Auto Body. Complete the following transactions:
A. 4/1: Jim invested $100,000 in cash and $50,000 in equipment in the company.
B. 4/2: The company prepaid for insurance with $1,200 cash.
C. 4/3: The company paid cash for rent totaling $1,200.
D. 4/5: The company completed services for a client for cash totaling $8,000.
E. 4/10: The company provided a service for $15,000 on account.
F. 4/11: The company purchased equipment for $5,000 and supplies for $3,000 on account.
G. 4/15: The company paid $1,500 cash for employee salaries.
H. 4/24: The company paid $300 cash for utility bills.
I. 4/28: The company paid dividends totaling $2,000 cash.
Jim opened Jim’s Auto Body. Complete the following transactions:
A. 4/1: Jim invested $100,000 in cash and $50,000 in equipment in the company.
B. 4/2: The company prepaid for insurance with $1,200 cash.
C. 4/3: The company paid cash for rent totaling $1,200.
D. 4/5: The company completed services for a client for cash totaling $8,000.
E. 4/10: The company provided a service for $15,000 on account.
F. 4/11: The company purchased equipment for $5,000 and supplies for $3,000 on account.
G. 4/15: The company paid $1,500 ca sh for employee salaries.
H. 4/24: The company paid $300 cash for utility bills.
I. 4/28: The company paid dividends totaling $2,000 cash.
