Question

ACCT 202 Project 1

?????!!!!!I need help with the Adjusted Trial balance and so on!!!!?????

You have just been hired as the accountant for Lay’s Lush Landscape Sales & Service, Inc. which started operations on January 01, 2016.

Your assignment is to:

• Prepare the journal entries (omit explanations) for all transactions from January 01, 2016 through June 30, 2016, post all journal entries to the general ledger, and prepare an Unadjusted Trial Balance for the six months ending June 30, 2016.

• Prepare all required adjusting entries (omit explanations) for the end of the accounting period, post all adjusting entries to the general ledger and create an Adjusted Trial Balance for the six months ending June 30, 2016.

• Prepare a Multi-Step Income Statement, Statement of Retained Earnings, Classified Balance Sheet, and Statement of Cash Flows for the period ending June 30, 2016.

• Prepare all required closing entries (omit explanations) for the end of the accounting period, post all closing entries to the general ledger and prepare a Post-Closing Trial Balance as of June 30, 2016.

• Calculate the following ratios: Current Ratio, Quick Ratio, Profit Margin, and Return on Assets.

• Prepare a short memo to the stockholders regarding the company’s performance for its first six months of operations and its current financial position. Proper grammar and spelling are critical!

REQUIREMENTS:

1. You are required to submit your complete general ledger, all trial balances, the above listed financial statements and the memo to the stockholders as part of the project.

2. You must submit your project electronically (via D2L Dropbox).

3. The journal entries, general ledger, trial balances and financial statements must be prepared using Excel or equivalent spreadsheet software. The memo to the stockholders must be prepared in Word or equivalent word processing software.

4. The project must be uploaded to D2L.

5. You are encouraged to work together on this project but each student is required to turn in their own completed project.

6. Under NO circumstances will a late project be accepted.

GRADING:

This project is worth 125 points:

• 40 points for proper journal entries (1 point each)
• 25 points for completed general ledger (1 point per account)
• 15 points for Trial Balances (5 points each)
• 32 points for proper financial statements (8 points each)
• 4 points for ratios (1 points each)
• 9 points for memo (content, spelling & grammar)
• NOTE: format, content and accuracy will be considered in each category

Transactions:

1/1       The owner of the business contributed $10,000 cash and a truck worth $16,000 to the business in exchange for 26,000 shares of $1par common stock. This is the first ever transaction for the business. Use perpetual inventory.

1/31     Borrowed $50,000 on a note payable from the bank.

1/31     Paid January rent, $500

2/01     Purchased equipment for $10,000 cash.

2/15     Purchased 100 bags of lawn fertilizer for $2.00 per bag on account (this lawn fertilizer will be sold to customers to apply themselves)

2/01     Paid February rent, $500

3/01     Prepaid, March – December rent at $500 per month

3/01     Purchased 100 bags of weed preventive fertilizer for $8 per bag on account (this fertilizer will be sold to customers to apply themselves)

3/01     Paid amount owed on lawn fertilizer from 2/15 transaction8 25

3/15     Sold 20 bags of weed preventive fertilizer for $15 per bag (cash)

3/15     Received $500 cash from customers for spring lawn services performed

3/15     Performed spring lawn service to customers on account $750

4/01     Collected $500 from customers on account from 3/15 transaction

4/14     Collected $250 from customers on account from 3/15 transaction

4/15     Sold 25 bags of weed preventive fertilizer for $15 per bag (cash)

4/15     Sold 15 bags of lawn fertilizer for $6 per bag (cash)

4/15     Paid for advertising campaign, $5,000 cash

5/01     Received payment for summer services in advance from 20 customers

            5 months (May – September) at $1000 each for a total of $100,000

5/31     Received payment for May’s lawn services provided from 5 customers, $5,500

5/31     Performed May lawn service for 5 customers on account to be received by 6/15, $5,500

5/31     Paid fuel expense of $1,000 for May

6/05     Paid wages to employees for May, $8000

6/15     Received payment from May’s credit customers, $5,500

6/15     Sold 20 bags of lawn fertilizer for $6 per bag (cash)

6/30     Received payment for June’s lawn service from 4 customers, $4,400

6/30     Performed June lawn service for 5 customers on account to be received by 7/15, $5,500

6/30     Purchased supplies on account, $1,000

6/30     Paid semi-annual payment on note from bank, $4,000 principal plus $2,000 interest expense for a total payment of $6,000

6/30     Paid fuel expense of $1,000 for May

Information for adjusting entries: (06/30/2016)

1. Depreciation on the truck for the period, (St-Line method, 4 years’ useful life, no salvage value)
2. Depreciation on the equipment for the period, (St-Line method, 3 years’ useful life, $1000 salvage value)
3. Adjust for unearned revenue now earned from customers who prepaid on 5/01.
4. Adjust for prepaid rent expired.
5. Accrue wages for employees who worked in June, but will be paid on July 5^th, $7,500

Answer 1

In the books of Lay's Lush Landscape Sales and Service Inc. :

Date	Account Titles	Debit	Credit
		$	$
1/1	Cash	10,000
	Truck	16,000
	Common Stock		26,000
1/31	Cash	50,000
	Notes Payable		50,000
1/31	Rent Expense	500
	Cash		500
2/01	Equipment	10,000
	Cash		10,000
2/01	Rent Expense	500
	Cash		500
2/15	Inventory	200
	Accounts Payable		200
3/01	Prepaid Rent	5,000
	Cash		5,000
3/01	Inventory	800
	Accounts Payable		800
3/01	Accounts Payable	200
	Cash		200
3/15	Cash	300
	Sales Revenue		300
3/15	Cost of Goods Sold ( 20 x $ 8 )	160
	Inventory		160
3/15	Cash	500
	Service Revenue		500
3/15	Accounts Receivable	750
	Service Revenue		750
4/01	Cash	500
	Accounts Receivable		500
4/14	Cash	250
	Accounts Receivable		250
4/15	Cash	375
	Sales Revenue		375
4/15	Cost of Goods Sold	200
	Inventory		200
4/15	Cash	90
	Sales Revenue		90
4/15	Cost of Goods Sold	30
	Inventory		30
4/15	Advertising Expense	5,000
	Cash		5,000
5/01	Cash	100,000
	Unearned Revenue		100,000
5/31	Cash	5,500
	Service Revenue		5,500
5/31	Accounts Receivable	5,500
	Service Revenue		5,500
5/31	Fuel Expense	1,000
	Cash		1,000
6/05	Wages Expenses	8,000
	Cash		8,000
6/15	Cash	5,500
	Accounts Receivable		5,500
6/15	Cash	120
	Sales Revenue		120
6/15	Cost of Goods Sold	40
	Inventory		40
6/30	Cash	4,400
	Service Revenue		4,400
6/30	Accounts Receivable	5,500
	Service Revenue		5,500
6/30	Notes Payable	4,000
	Interest Expense	2,000
	Cash		6,000
6/30	Fuel Expense	1,000
	Cash		1,000