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CASE STUDY 1THE COMPLETE ACCOUNTING CYCLE Name: ___Regina Varnado________________________________

The entire Case Study is due Sunday at midnight mountain time at the end of Week 3. This Case Study is worth 100 points or 10% of your final course grade. This Case Study relates to TCOs D and E and Chapters 3 and 4. MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. There are 10 sheets in the Workbook including this one. All of the Information you need for the project is located in this Workbook. Requirements Requirement 1Prepare the Journal Entries in the General Journal Requirement 2Post Journal Entries to the General Ledger Requirement 3Prepare a Trial Balance Requirement 4Prepare the Adjusting Entries Requirement 5Post Adjusting Entries to the General Ledger Requirement 6Prepare an Adjusted Trial Balance Requirement 7Prepare the Financial Statements Requirement 8Prepare the Closing Entries Requirement 9Post Closing Entries to the General Ledger Requirement 10Prepare the Post Closing Trial Balance Sheet in Workbook Journal Entries General Ledger Trial Balance Adjusting Entries General Ledger Adjusted TB Financial Statements Closing Entries General Ledger Post Closing TB

Hint for success: Review the Week 2 Lecture prior to starting this project. There are also hints contained within certain cells on some of the worksheet tabs. You can hover over the red pointer at the top right-hand corner of the cell to read the
Hints are provided for the following balances: 1) The debits for the journal entries are on the Journal Entries tab. 2) The credits for the journal entries are on the Journal Entries tab. 3) The cash balance is on the General Ledger tab. 4) The debits for the trial balance are on the Trial Balance tab. 5) The credits for the trial balance are on the Trial Balance tab. 6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab. 7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab. 8) Net income for the income statement is on the Financial Statements tab. 9) Retained earnings as of March 31 are on the Financial Statements tab. 10) Total assets for the balance sheet are on the Financial Statements tab. 11) Total liabilities and shareholders' equity for the balance sheet are on the Financial Statements tab. 12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab. 13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab.

s project. he worksheet tabs. of the cell to read the hint.

ements tab.

During its first month of operation, the Flower Landscaping Corporation, which specializes in residential landscaping, completed the following transactions. March 1 Began business by making a deposit in a company bank account of $72,000, in exchange for 7,200 shares of $10 par value common stock. Paid the current month's rent, $4,500. Paid the premium on a 1-year insurance policy, $3,300. Purchased supplies on account from Parkview Company, $900.

March 1 March 1 March 7

March 10 Paid employee salaries, $2,200. March 14 Purchased equipment from Hammond Company, $9,000. Paid $1,500 down and the balance was placed on account. Payments will be $375.00 per month for 20 months. The first payment is due 4/1. Note: Use accounts payable for the balance due. March 15 Received cash for landscaping revenue for the first half of March, $4,896. March 19 Made payment on account to Parkview Company, $450. March 31 Received cash for landscaping revenue for the last half of March, $5,304. March 31 Declared and paid cash dividend of $1,000.

Prepare journal entries to record the March transactions in the General Journal below. General Journal Description(Account Name) Debit Credit Cash 72,000 Common Stock 72,000 Issued common stock Rent Expense 4,500 cash 4,500 Paid month rent Prepaid Insurance 3,300 cash 3,300 Paid Insurance 1 year premium Supplies 900 Account Payable 900 Purchased supplies at Parkview Salaries Expense 2,200 cash 2,200 Paid employee salaries Equipment 9,000

Date 1-Mar

1-Mar

1-Mar

7-Mar

10-Mar

14-Mar

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


Requirement #2: Post the March journal entries to the following T-accounts and compute ending balances.

Cash (111) 72000 4896 5304

Landscaping Revenue (411) 4500 3300 2200 1500 450 1000

DR
10200

CR
4896 5304 10200

10200 Closed

69250 Debit Balance

Prepaid Insurance (117)

Rent Expense (511)

DR
3300

CR
275

DR
4500 4500 Closed

CR
4500 4500

3025 Debit Balance

Supplies (119)

Salaries Expense (512)

DR
900

CR
450

DR
2200 2200 Closed

CR
2200 2200

450 Debit Balance

Equipment (144)

Insurance Expense (513)

DR
9000

CR

DR
275 275

CR
275 275

9000 Debit Balance Accumulated Depreciation-Equipment (145)

Closed Supplies Expense (514)

DR

CR
150

DR
450 450 150 Credit Balance Closed

CR
450 450

Accounts Payable (212)

Depreciation Expense (515)

DR
450

CR
7500 900 7950 Credit Balance

DR
150 150 Closed

CR
150 150

Income Tax Payable (213)

Income Tax Expense (516)

DR

CR
795

DR
795

CR
795

795 Credit Balance Closed Common Stock (311)

795

795

DR

CR
72000

72000 Credit Balance Retained Earnings (312)

DR
1000

CR
1855

1855 Credit Balance Dividends (313)

DR
1000 1000 Closed

CR
1000 1000

Requirement #3: Prepare a trial balance for March in the space below.

Flower Landscaping Corporation Trial Balance March 31 Account Name Dr Cash Prepaid Insurance Supplies Equipment Accumlated Depreciation Equipment Accounts Payable Income Taxes Payable Common Stock Landscaping Revenue Rent Expense Salaries Expense Insurance Expense Income Tax Expense Interest Expense Cash Dividends Cr 69,250 3,300 900 9,000 7,950 72,000 10,200 4,500 2,200

1,000 90,150

90,150

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 $475. c) The estimated depreciation on equipment is $150. d) The estimated income tax is $795. General Journal Description(Account Name) Prepaid Insurance Insurance Expense Supplies Supplies Depeciation Expense Accumulated Depreciation Income Tax Expense Income Tax Payable

Date a

Debit 275

Credit 275 425 425 150 150 795 795

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.

Requirement #6: Prepare an adjusted trial balance in the space below. Flower Landscaping Corporation Adjusted Trial Balance March 31

Cash Prepaid Insurance Supplies Equipment Accumulated Depreciation Equipment Accounts Payable Income Tax Payable Common Stock Landscaping Revenue Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income Tax Payable Interest Expense Dividends

69250 3025 475 9000 150 7950 795 72000 10200 4500 2200 150 425 795 275 1000 91095

91095

Requirement #7: Prepare the financial statements for the Flower Landscaping Corporation as of March 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 project. Flower Landscaping Corporation Income Statement For the Month Ending March 31 Revenues: Landscaping Revenue Expenses: Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income Tax Expense Total Expenses Net Income Flower Landscaping Corporation Statement of Retained Earnings For the Month Ending March 31 Retained Earnings, March 1 Add: Net Income Subtotal Less: Dividends Retained Earnings, March 31

$ 10,200

1,855 1,000 $ 855

4,500 2,200 275 425 150 795 8,345 $ 1,855

he space below. ance sheet.

Flower Landscaping Corporation Balance Sheet March 31 Assets: Cash Prepaid Insurance Supplies Equipment Less: Accum. Depr. Total Assets Liabilities: Accounts Payable Income Tax Payable Total Liabilities Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity

69,250 3,025 475 9,000 150 81,600

7,950 795 8,745 72,000 855 72,855 $ 81,600

Requirement #8: Prepare the closing entries at March 31 in the General Journal below. Hint: Use the balances for each account, which appear on the Adjusted Trial Balance for your closing entries. General Journal Description (Account Name) Service Revenue Income Summary Income Summary Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income Tax Expense Income Summary Retained Earning Retained Earning Dividends

Date 31-Mar

Debit 10200

Credit 10200 8345 4500 2200 275 425 150 795 1855 1855 1000 1000

31-Mar

31-Mar

31-Mar

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 March 31 in the space below.

Flower Landscaping Corporation Post-Closing Trial Balance March 31 Cash Equipment Supplies Accounts Payable Common Stock Accumulated Depreciation Prepaid Insurance Income Tax Payable Retained Earnings 69,250 9,000 475 7,950 72,000 150 3,025 795 855 81,750 81,750

Case Study 1 Rubric Please note that this rubric provides a general guideline but you can score anywhere between 0 and the maximum number of points for that step depending on the accuracy and completeness of your work.
Criteria

Outstanding
Journal entries use accurate accounts and amounts; and debits and credits are used correctly.

Good
Minor errors such as incorrect account names or credits listed prior to debits.

Poor

Very Poor

Step 1
Prepared Journal Entries (20 points)

Errors in Evidence of an attempt to complete computations that the journal entries. resulted in incorrect amounts to be debited and credited.

20 points Posting is Step 2 correct, Posted to the General leading to Ledger (10 accurate account points) balances. 10 points Correct Step 3 Prepared a account names and Trial Balance (10 balances that arrive at a points) correct trial balance.

16 points Posting is mostly correct but minor errors are evident. 8 points Some minor errors such as incorrect account names or incorrect totals due to errors in prior steps. 8 points Journal entries mostly use accurate accounts; and amounts and debits and credits are used correctly.

12 points 8 points Posting has Posting is done poorly but does show several errors that evidence of an attempt to complete. resulted in incorrect account balances. 6 points 4 points Errors in Evidence of an attempt to complete computations that the trial balance. resulted in incorrect amounts to be debited and credited.

Step 4
Prepared Adjusting Journal Entries (10 points)

10 points Journal entries use accurate accounts and amounts; and debits and credits are used correctly.

6 points Journal entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

4 points Journal entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

10 points Posting is Steps 5 & 6 correct, Posted and Prepared an leading to an Unadjusted accurate trial balance. Trial Balance (10 points)

8 points Posting is mostly correct, leading to a mostly correct trial balance.

6 points Posting has several errors, leading to a trial balance with several errors.

4 points Posting is done poorly or not at all, leading to inaccurate or no trial balance.

Prepared an Unadjusted Trial Balance (10 points)

Step 7
Prepared Financial Statements (20 points)

10 points All three Financial Statements are prepared accurately and in an appropriate format.

8 points Two of the three Financial Statements are prepared accurately and mostly in an appropriate format, one statement has some errors.

6 points One of the three Financial Statements is prepared accurately and mostly in an appropriate format; two statements have some errors.

4 points One or fewer of four Financial Statements are prepared accurately and mostly in an appropriate format; three or all statements have some errors.

Step 8
Prepared Closing Journal Entries (10 points)

20 points Journal entries use accurate accounts and amounts; and debits and credits are used correctly.

16 points Journal entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

12 points Journal entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

8 points Journal entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

10 points Steps 9 & 10 Posting is Posted and correct, leading to an Prepared Post-Closing accurate trial balance. Trial Balance (10 points) 10 points

8 points Posting is mostly correct, leading to a mostly correct trial balance.

6 points Posting has several errors, leading to a trial balance with several errors.

4 points Posting is done poorly or not at all, leading to inaccurate or no trial balance.

8 points

6 points

4 points

Total Points Earned Out of 100 Points

ywhere between 0 and completeness


Points Awarded