Small Construction Co.

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Answers

1.Set up the Chart of Accounts
Ans. Please see T-Accounts tab
2.Prepare the bank reconciliation at June 30th, 2016
Ans. PL see BRS Tab
3.Prepare the General Journal for the months of May and June 2016
And Pl see Journal Tab
4.Post all transactions to the T-accounts
Ans. Pl See T-Accounts Tab
5.Prepare a trial balance at June 30, 2016
Ans. Pl see Trial Balance Tab
6.Prepare the Financial Statements in good form for June 2016 including footnotes for a Summary of Significant Accounting Policies and for contingency disclosures that are exclusive of the transactions of this case (do not include general notes). The financial statements must include all transactions made in May and June as if they occurred in one accounting period.
Ans. Pl see Fin Stt Tab
7.Special instructions:
Each General Journal entry should have an explanation under.
Every place where the word Marco or Lara appears in items 1, 2, 3 and 4 of the required substitute your own first name.
8.Based on all the information provided in this project, prepare a memo to Marco and Lara where you as a professional accountant evaluate their business. Specifically address their concerns:
Ans. Memo attached

Journal Final

STUDENT NUMBER IS 214272751
Dr Cr
May 1 Cash $12,000.00
Capital Account $12,000.00
(Share of Lara paid in cash)
May 1 Van A/C $7,000.00 Annual Dep = 1400
Capital Account $7,000.00
(Marco's Van given for Business)
May 1 Tools A/C $5,000.00 Annual Dep = 450
Capital Account $5,000.00
(Marco's Tools given for Business)
May 1 Advance to Sam's Material $5,000.00
Cash $5,000.00
(Advance paid to Sam towards Procurement of material C#3)
May 1 Prepaid Insurance $6,000.00
Cash $6,000.00
(Purchased 1Yr Insurance from Riskit Insurance #C1)
May 1 Printed docs $225.00
Cash $225.00
(Paid for Bus card, control sheet, Proj Card #C2)
May 1 Office Supplies $200.00
Lara A/C $200.00
(Purchase by Lara using Visa card- to be reimbursed)
May 1 Cellphone A/C $900.00 Dep = 450
Account payable $900.00
(Purchase Cellphone, Life 2 Yrs)
May 1 Gas expense $54.00
Cash $54.00
(Gas expense on Van)
May 8 Gas expense $55.50
Cash $55.50
(Gas expense on Van)
May 15 Inventory $12,050.00
Cash $12,050.00
(Material paid to Sam C#4)
May 19 Gas expense $53.50
Cash $53.50
(Gas expense on Van)
May 26 Gas expense $51.00
Cash $51.00
(Gas expense on Van)
May 31 Printed docs Expense $25.00
Printed docs $25.00
(Supplies on May 31 $200, So balance expensed)
May 31 Office Supplies Expense $90.00
Office Supplies $90.00
(Supplies on May 31 $110, So balance expensed)
May 31 Cellphone expenses $165.16
Account Payable $165.16
(Tel Bill for May 31, due on Jun 5)
May 31 Inventory $10,700.00
Cash $10,700.00
(Material paid to Sam C#5)
May 31 Eqpt Rent expense $2,000.00
Account Payable $2,000.00
(Cutting machine Rent due on 5th Jul)
May 31 Wages expense $1,200.00
Wages Payable $955.20
Federal Income Tax payable $168.00
CPP-Employee payable $51.60
EI-Employee Payable $25.20
(Wages expens for Sal)
May 31 Employee Benefit expense $87.60
CPP-Company Payable $51.60
EI-Company Payable $36.00
(Employee benefit Exp-Sal)
May 31 Vacaction Pay expense $48.00
Vacation pay accrued $48.00
(Vacation pay for Sal accrued)
May 31 Wages expense $3,375.00
Wages Payable $2,686.50
Federal Income Tax payable $472.50
CPP-Employee payable $145.13
EI-Employee Payable $70.88
(Wages expense for Rob)
May 31 Employee Benefit expense $246.38
CPP-Company Payable $145.13
EI-Company Payable $101.25
(Employee benefit Exp-Rob)
May 31 Vacation Pay expense $135.00
Vacation pay accrued $135.00
(Vacation pay for Rob accrued)
May 31 Bank Charges $20.00
Cash $20.00
(Monthly Bank charges)
May 31 Cash $49,000.00
Revenue $49,000.00
(Revenue earned in May)
May 31 Cost of Material used $24,500.00
Inventory $24,500.00
(Mat used is with 100% MU for Work completed)
Jun 3 Account Payable $2,000.00
Cash $2,000.00
(Cutting machine Rent Paid C#8)
Jun 3 Wages Payable $955.20
Cash $955.20
(Wages paid to Sal C#6)
Jun 3 Wages Payable $2,686.50
Cash $2,686.50
(Wages paid to Rob C#7)
Jun 5 Account payable $1,065.16
Cash $1,065.16
(Cellphone Bill and Tel Bill paid)
Jun 5 Gas expense $56.00
Cash $56.00
(Gas expense on Van)
Jun 16 Gas expense $54.50
Cash $54.50
(Gas expense on Van)
Jun 21 Gas expense $52.50
Cash $52.50
(Gas expense on Van)
Jun 15 Inventory $8,080.00
Cash $8,080.00
(Material paid to Sam C#10)
Jun 15 Federal Income Tax payable $640.50
CPP-Employee payable $196.73
EI-Employee Payable $96.08
CPP-Company Payable $196.73
EI-Company Payable $137.25
Receiver Journal $1,267.29
(Taxes paybel to Receiver Journal)
Jun 15 Receiver Journal $1,267.29
Cash $1,267.29
(Paid vide C#9)
Jun 30 Gas expense $50.00
Cash $50.00
(Gas expense on Van)
Jun 30 Printed docs Expense $98.00
Printed docs $98.00
(Supplies on Jun 30 = 2*51 = 102, So balance expensed)
Jun 30 Office Supplies Expense $59.00
Office Supplies $59.00
(Supplies on Jun 30 = 51, So balance expensed)
Jun 30 Cellphone expenses $134.05
Account Payable $134.05
(Tel Bill for Jun 30, due on Jul 5)
Jun 30 Inventory $15,530.00
Cash $15,530.00
(Material paid to Sam C#11)
Jun 30 Eqpt Rent expense $3,000.00
Account Payable $3,000.00
(Cutting machine Rent due on 5th Jul)
Jun 30 Wages expense $1,530.00 1598 $68.00
Wages Payable $1,217.88
Federal Income Tax payable $214.20
CPP-Employee payable $65.79
EI-Employee Payable $32.13
(Wages expens for Sal)
Jun 30 Employee Benefit expense $111.69
CPP-Company Payable $65.79
EI-Company Payable $45.90
(Employee benefit Exp-Sal)
Jun 30 Vacaction Pay expense $61.20
Vacation pay accrued $61.20
(Vacation pay for Sal accrued)
Jun 30 Wages expense $3,300.00
Wages Payable $2,626.80
Federal Income Tax payable $462.00
CPP-Employee payable $141.90
EI-Employee Payable $69.30
(Wages expense for Rob)
Jun 30 Employee Benefit expense $240.90
CPP-Company Payable $141.90
EI-Company Payable $99.00
(Employee benefit Exp-Rob)
Jun 30 Vacaction Pay expense $132.00
Vacation pay accrued $132.00
(Vacation pay for Rob accrued)
Jun 30 Cash $8,000.00
Unearned Revenue-Booking $8,000.00
(Payment Rxd for booking)
Jun 30 Cash $2,251.00
Unearned Revenue-Work not done $2,251.00
(Recording Paymt rxd for work not yet done)
Jun 30 Account receivable $5,300.00
Revenue $5,300.00
(Payment pending for work completed)
Jun 30 Bad debt expense $2,300.00
Account receivable $2,300.00
(Adj for NSF cheque)
Jun 30 Account receivable $2,300.00
Cash $2,300.00
(Adj for NSF Cheque)
Jun 30 Cost of Material used $2,650.00
Inventory $2,650.00
(Mat used is with 100% MU for Work done)
Jun 30 Bank Charges $20.00
Cash $20.00
(Monthly Bank charges)
Jun 30 Bank charges $40.00
Cash $40.00
(NSF Cheque Fee)
Jun 30 Cost of Material used $25,500.00
Inventory $25,500.00
(Mat used is with 100% MU for Work completed)
Jun 30 Cash $1,000.00
Unearned Revenue $1,000.00
(Cheque #12 Rxd from Next door neighbour for work in Jul)
Jun 30 Cash $51,000.00
Revenue $51,000.00
(Revenue earned in May)
Jun 30 Depreciation Exp - Van $233.33
Depreciation Exp - Tools $83.33
Depreciation Exp - Cellphone $75.00
Accumulated Dep - Van $233.33
Accumulated Dep - Tool $83.33
Accumulated Dep - Cellphone $75.00
(Dep exp for 2 months)
Jun 30 Insurance expense $1,000.00
Prepaid Insurance $1,000.00
(Insurance expense for 2 months)
Jun 30 Income Tax expense $1,300.00
Income Tax payable $1,300.00
(Estimated I Tax expense)
Jul 3 Wages Payable $1,217.88
Cash $1,217.88 1170.99 $46.89
(Wages paid to Sal C#6)
Jul 3 Wages Payable $2,626.80
Cash $2,626.80
(Wages paid to Rob C#7)
Jul 15 Federal Income Tax payable $676.20
CPP-Employee payable $207.69
EI-Employee Payable $101.43
CPP-Company Payable $207.69
EI-Company Payable $144.90
Receiver Journal $1,337.91 1170.99 $166.92
(Paid vide C#16)
Jun 30 Cost of Material $1,000.00
Large Construction Co $1,000.00
(15% Referal fee paid which is part of Material)
Jun 30 Large Construction Co $1,000.00
Cash $1,000.00
(15% Referal fee paid which is part of Material)
$292,147.68 $292,147.69 ERROR:#REF!
ERROR:#REF! ERROR:#REF!

BRS

Bank reconciliation at June 30th, 2016
Balance as per Bank Statement as on Jun 30 $58,163.86
Adjustments :
Outstanding Cheques :
Cheque #11 Jun 30 (Sam) -$15,530.00
Adjusted Balance as per Bank stt $42,633.86
Balance as per books on June 30th, 2016 $37,123.16
Adjustments :
Monthly Service Charge - May -$20.00
Monthly Service Charge - June -$20.00
NSF Cheque (Jun 18) -$2,300.00
NSF Cheque Fee (Jun 18) -$40.00
Cash Withdrawl (May 2) -$427.00
Tel Bill -$1,065.16
Deposit May 3 $7,000.00
Deposit May 5 $12,000.00
Deposit May 20 $17,000.00
Deposit May 26 $3,000.00
Deposit Jun 5 $14,000.00
Deposit Jun 15 $13,000.00
Deposit Jun 22 $15,000.00
Deposit Jun 29 $9,000.00
Adjusted Balance as per Books $123,251.00

T-Account (General Ledger)

Cash Accounts payable Common stock Printed Docs
1-May $12,000.00 $5,000.00 1-May 3-Jun $2,000.00 $900.00 1-May $12,000.00 1-May 1-May $225.00 $25.00 31-May
31-May $49,000.00 $6,000.00 1-May 5-Jun $1,065.16 $165.16 31-May $7,000.00 1-May $98.00 30-Jun
30-Jun $8,000.00 $225.00 1-May $2,000.00 31-May C/fwd $24,000.00 $5,000.00 1-May Total $102.00 c/fwd
30-Jun $2,251.00 $54.00 1-May $134.05 30-Jun Total $24,000.00 $24,000.00 Total $225.00 $225.00
30-Jun $51,000.00 $55.50 8-May $3,000.00 30-Jun Revenue
30-Jun $1,000.00 $12,050.00 15-May C/Fwd $3,134.05 $49,000.00 31-May Printed Docs Expense
$53.50 19-May Total $6,199.21 $6,199.21 $5,300.00 30-Jun 31-May $25.00
$51.00 26-May $51,000.00 30-Jun 30-Jun $98.00
$10,700.00 31-May $105,300.00 Total Total $123.00 $0.00
$20.00 31-May Unearned Revenue Booking
$2,000.00 3-Jun Prepaid Insurance $8,000.00 30-Jun
$955.20 3-Jun 1-May $6,000.00 $1,000.00 30-Jun $1,000.00 30-Jun Office supplies expense
$2,686.50 3-Jun $5,000.00 c/fwd Total $9,000.00 $9,000.00 31-May $ 90
$56.00 5-Jun Total $6,000.00 $6,000.00 Unearned Revenue-Work not done 30-Jun $ 59
$1,065.16 5-Jun Sam's A/C $2,251.00 30-Jun Total $149.00
$8,080.00 15-Jun 1-May $5,000.00 Large Construction co
$1,267.29 15-Jun Cost of Material Used 30-Jun $1,000.00 $1,000.00 30-Jun
$54.50 16-Jun 31-May $24,500.00
$52.50 21-Jun 30-Jun $2,650.00 $0.00 c/wfwd
$50.00 30-Jun Insurance Expense 30-Jun $1,000.00 Cellphone expenses
$15,530.00 30-Jun 30-Jun $1,000.00 31-May $165.16
$20.00 30-Jun Total $28,150.00 $28,150.00 30-Jun $134.05
$40.00 30-Jun Total $299.21
$1,000.00 30-Jun Gas Expense Eqpt Rent expense
$2,300.00 30-Jun 1-May $54.00 31-May $ 2,000
8-May $55.50 Bad debt expense 30-Jun $ 3,000 $ 5,000 C/fwd
19-May $53.50 30-Jun $ 2,300 Total $5,000.00 $5,000.00
26-May $51.00 Wages expense
$53,884.85 c/fwd 5-Jun $56.00 Depreciation expense-Van 31-May $1,200.00
Total $123,251.00 $123,251.00 16-Jun $54.50 30-Jun $233.33 31-May $3,375.00
21-Jun $52.50 30-Jun $1,530.00
30-Jun $50.00 Income tax expense 30-Jun $3,300.00 $9,405.00 c/fwd
Inventory Total $427.00 30-Jun $ 1,300 Total $9,405.00 $9,405.00
15-May $12,050.00 $24,500.00 31-May Wages Payable
31-May $10,700.00 $2,650.00 30-Jun 3-Jun $955.20 $955.20 31-May
15-Jun $8,080.00 Cellphone A/C Income tax payable 3-Jun $2,686.50 $2,686.50 31-May
30-Jun $15,530.00 $19,210.00 C/fwd 1-May $ 900 $ 1,300 30-Jun $1,217.88 30-Jun
Total $46,360.00 $46,360.00 C/Fwd $3,844.68 $2,626.80 30-Jun
Accumulated depreciation-Cellphone Depreciation expense-Tools Total $7,486.38 $7,486.38
Van A/C $ 75 30-Jun 30-Jun $83.33
1-May $ 7,000
Tools A/C Depreciation expense-Cellphone
1-May $5,000.00 30-Jun $75.00 Vacation Pay expense
Accumulated depreciation-Van 31-May $48.00
$ 233 30-Jun 31-May $135.00
Bank Charges Lara A/C 30-Jun $61.20
Federal Income Tax payable 31-May $20.00 $ 200 1-May 30-Jun $132.00 $376.20 C/Fwd
15-Jun $640.50 $168.00 31-May 30-Jun $20.00 Total $376.20 $376.20
15-Jul $676.20 $472.50 31-May 30-Jun $40.00 Receiver Journal
$214.20 30-Jun Total $80.00 15-Jun $1,267.29 $1,267.29 15-Jun Office Supplies
$462.00 30-Jun Accumulated depreciation-Tool C/fwd $1,337.91 $1,337.91 15-Jul 1-May $200.00 $90.00 31-May
Total $1,316.70 $1,316.70 $83.33 30-Jun Total $2,605.20 $2,605.20 $59.00 30-Jun
$51.00 C/Fwd
CPP-Employee payable Employee Benefit expense Total $200.00 $200.00
15-Jun $196.73 $51.60 31-May 31-May $87.60 Vacation pay accrued
15-Jul $207.69 $145.13 31-May 31-May $246.38 $48.00 31-May Account receivables
$65.79 30-Jun 30-Jun $111.69 $135.00 31-May 30-Jun $ 5,300 $ 2,300 30-Jun
$141.90 30-Jun 30-Jun $240.90 $61.20 30-Jun $ 2,300
Total $352.82 $352.82 Total $686.57 C/fwd $376.20 $132.00 30-Jun
Total $376.20 $376.20 $ 5,300 C/fwd
EI-Employee Payable CPP-Company Payable Total $7,600.00 $7,600.00
15-Jun $96.08 $25.20 31-May 15-Jun $196.73 $51.60 31-May EI-Company Payable
15-Jul $101.43 $70.88 31-May 15-Jul $207.69 $145.13 31-May 15-Jun $137.25 $36.00 31-May
$32.13 30-Jun $65.79 30-Jun 15-Jul $144.90 $101.25 31-May
$69.30 30-Jun $141.90 30-Jun $45.90 30-Jun
Total $197.51 $197.51 Total $404.42 $404.42 $99.00 30-Jun
Total $282.15 $282.15

Trial Balance

Adjusted Trial Balance
Debit Credit
Cash $53,884.85
Accounts receivables $5,300.00
Allowance for uncollectible accounts
Inventory $19,210.00
Prepaid Insurance $5,000.00
Printed Docs $102.00
Office Supplies $51.00
Sam A/C $5,000.00
Van A/C $7,000.00
Accumulated depreciation-Vehicle $233.33
Tools A/C $5,000.00
Accumulated depreciation-Tools $83.33
Cellphone A/C $900.00
Accumulated depreciation-Cellphone $75.00
Accounts payable $3,134.05
Lara A/C $200.00
Vacation Pay Accrued $376.20
Unearned Revenue - Booking $9,000.00
Unearned Revenue - Work not done $2,251.00
Wages payable $3,844.68
Income Tax payable $1,300.00
Receiver Journal $1,337.91
Commonstock $24,000.00
Retained Earning $0.00
Sales revenue $105,300.00
Cost of Material Used $28,150.00
Bad debt expense $2,300.00
Depreciation expense-Van $233.33
Depreciation expense-Tools $83.33
Depreciation expense-Cellphone $75.00
Income tax expense $1,300.00
Cellphone expense $299.21
Insurance Expense $1,000.00
Bank charges $80.00
Eqpt Rent expense $5,000.00
Gas expense $427.00
Printed docs expense $123.00
Office Supplies expense $149.00
Wages Expense $9,405.00
Vacation Pay Expense $376.20
Employee Benefit expense $686.57
Total $151,135.50 $151,135.51

Financial Statements

Small Construction Co. Small Construction Co. Small Construction Co.
Multi-step Income Statement Statement of Stockholders' Equity Classified Balance Sheet
For the month Ended Jun 30, 20XX For the month Ended Jun 30, 20XX As on Jun 30, 20XX
Revenue $105,300.00 Assets Liabilities and Equity
Cost of Material Used $28,150.00 Common Stock $24,000.00 Current Assets Current Liabilities
Gross Profit $77,150.00 Retained Earnings $0.00 Cash $53,884.85 Accounts payable $3,134.05
Bad Debt Expense $2,300.00 Add: Net Income $55,612.35 $55,612.35 Accounts receivables $5,300.00 Lara A/C $200.00
Depreciation expense-Van $233.33 Stockholder Equity $79,612.35 Less : Allowance for Uncollectible accounts Vacation Pay Accrued $376.20
Depreciation expense-Tools $83.33 Inventory $19,210.00 Unearned Revenue - Booking $9,000.00
Depreciation expense-Cellphone $75.00 Prepaid Insurance $5,000.00 Unearned Revenue - Work not done $2,251.00
Insurance Expense $1,000.00 Printed Docs $102.00 Wages payable $3,844.68
Bank charges $80.00 Office Supplies $51.00 Income Tax payable $1,300.00
Eqpt Rent expense $5,000.00 Current Assets $83,547.85 Receiver Journal $1,337.91
Cellphone expense $299.21 Sam A/C $5,000.00 Total Liabilities $21,443.84
Gas expense $427.00 Van A/C $7,000.00
Printed docs expense $123.00 Accumulated depreciation-Vehicle -$233.33
Office Supplies expense $149.00 Tools A/C $5,000.00
Wages Expense $9,405.00 Accumulated depreciation-Tools -$83.33 Common Stock $24,000.00
Vacation Pay Expense $376.20 Cellphone A/C $900.00 Retained Earnings $0.00
Employee Benefit expense $686.57 Accumulated depreciation-Cellphone -$75.00 Add: Net Income $55,612.35
Total Operating expenses $20,237.65 Total Fixed Assets $17,508.33 Stockholder Equity $79,612.35
Operating Income $56,912.35 Total Assets $101,056.18 Total Liabilities & Equity $101,056.19
Interest Revenue
Non-operating revenue $0.00
Income before income taxes $56,912.35
Income Tax expense $1,300.00 `
Net Income $55,612.35