FDNACCT WRITTEN GROUP CASE ANALYSIS [10% of final grade]

Term 3, Academic Year 2018-2019

Adapted from: Warren, C.S., Reeve, J.M., & Duchac, J.E. (2018). Accounting (27th ed.). Boston, MA: Cengage Learning.

STAR COMPANY is a merchandising business that uses the periodic inventory system. The unadjusted
account balances as of July 31, 2019 (unless otherwise indicated), are as follows:

Account No. Account Title Debit Credit

110 Cash ₱ 564,000
112 Accounts Receivable 280,000
113 Allowance for Doubtful Accounts ₱ 0
115 Merchandise Inventory 466,000
117 Prepaid Insurance Expense 150,000
118 Store Supplies 19,000
123 Store Furniture and Equipment 650,000
124 Accumulated Depreciation – Store Furniture 65,000
and Equipment
210 Accounts Payable 109,000
212 Salaries Payable 0
221 Unearned Sales Revenue 180,000
310 S. Tarr, Capital, August 1, 2018 234,000
311 S. Tarr, Drawing 128,000
410 Sales 5,555,000
411 Sales Returns and Allowances 33,000
412 Sales Discount 44,000
510 Purchases 2,222,000
511 Purchase Returns and Allowances 17,000
512 Purchase Discount 24,000
514 Freight-in 11,000
520 Sales Salaries Expense 730,000
521 Advertising Expense 90,000
522 Depreciation Expense – Store Furniture and 0
Equipment
523 Store Supplies Expense 0
524 Freight-out 13,000
529 Miscellaneous Distribution Costs 16,000
530 Office Salaries Expense 412,000
531 Rent Expense 210,000
532 Utilities Expense 138,000
533 Insurance Expense 0
534 Doubtful Accounts Expense 0
539 Miscellaneous Administrative Expenses 8,000
699 Income Summary 0
TOTAL ₱6,184,000 ₱6,184,000
Adjustments data:
1. Accrued salaries on July 31, 2019 are as follows: ₱48,000 for sales salaries and ₱26,000 for office
salaries.
2. Of the reported Prepaid Insurance Expense, ₱30,000 remain unexpired as at July 31, 2019.
3. Store supplies on hand on July 31, 2019 amounted to ₱5,000.
4. The reported Unearned Sales Revenue account included ₱50,000 worth of inventory delivered
last July 31.
5. Store furniture and equipment are estimated to have 10-year useful life with no salvage value.
6. Doubtful accounts are estimated at 8% of outstanding accounts receivable.
7. Merchandise inventory at July 31, 2019, based on physical count, is ₱420,000.
INSTRUCTIONS:
1. Form a group composed of four members (three or five members if everyone else has a groupmate).

2. Your group is tasked to do the following for STAR Company:

a) Set-up the accounts and enter the balances of each in the general ledger. Unless otherwise
instructed, you may utilize one-half page of the general ledger for each account. There is no
need to set-up subsidiary ledgers.
b) Based on adjustments data, journalize the adjusting entries (Start with left side of Worksheet#1).
c) Post the adjusting entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger.
d) Prepare an adjusted trial balance as of July 31, 2019 (Start with left side of Worksheet#2).
e) Prepare a functional-form Income Statement for the fiscal year ended July 31, 2019 (Start with
left side of Worksheet#3).
f) Prepare a Statement of Changes in Equity for the fiscal year ended July 31, 2019 (Skip three lines
after Income Statement).
g) Prepare a report-form Statement of Financial Position as at July 31, 2019 (Start with right side of
Worksheet#3).
h) Prepare all supporting notes to financial statements (Start with left side of Worksheet#4 and
continue with right side if more space is needed).
i) Journalize the closing entries (Continue with left side of Worksheet#1 and continue with right
side if more space is needed).
j) Post the closing entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger. Determine the balance of each account.
k) Prepare a Post-Closing Trial Balance as at July 31, 2019 (Start with right side of Worksheet#2).
l) Journalize reversing entries (Continue with Worksheet#1).
m) Post the reversing entries to the general ledger. Remember to complete the posting reference
columns in the worksheet and the ledger.

3. Submit your group’s case analysis (general ledgers and worksheets) to your professor on:
 August 15, 2019 (Thursday), class time

4. The criteria for grading the case analysis are as follows:

Criteria Exemplary Satisfactory Developing Beginning

(97-100) (80-96) (70-79) (Below 70)
Content and The group applies The group applies The group applies The group fails to
Application all relevant some FDNACCT few FDNACCT topics apply FDNACCT
[80%] FDNACCT topics topics appropriately appropriately topics
appropriately to the appropriately
business case.
Format and The group follows The group follows The group follows The group does not
Use of English the format and has the format and uses the format but uses follow format and
Language not one spelling/ only the English a mixture of Filipino uses a mixture of
[10%] grammatical error in language in the and English Filipino and English
the paper. paper which is at an language in the language in the
acceptable level. paper and/or uses paper and/or uses
the English the English
language somewhat language
inappropriately. inappropriately.
Teamwork The group shows The group shows The group shows The group shows
[10%] strong teamwork as teamwork as somewhat a lack of lack of teamwork as
evidenced in the evidenced in the teamwork as evidenced in the
oneness and consistency in terms evidenced in some inconsistencies both
consistency both in of content of the inconsistencies both in the flow and
the flow and paper in the flow and contents of the
contents of the contents of the paper
paper paper