ACC 201 Southern New Hampshire University Milestone General Journal Entries

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ntnvyeviraonex

Business Finance

ACC 201

Southern New Hampshire University

ACC

Description

Overview

In previous modules, you examined the initial stages of the accounting cycle and practiced journalizing financial transactions. In Milestone One, you will complete the first part of your course project to demonstrate your ability to accurately record financial data, which will continue to be used to complete other parts of the project.

Scenario

You are a certified public accountant (CPA) who is working with a small bakery to prepare their financial statements for three months of the current fiscal year. Because the company is a startup and so small, the accounting is done manually in Microsoft Excel. You have been given the accounts and information you need to prepare their financial statements, but you will need to use the accounting cycle to report accurate information to the finance department.

Prompt

Record Financial Data: Use accepted accounting principles to accurately capture business transactions for October, November, and December in the Company Accounting Workbook Template using the data provided in the Accounting Data Appendix document.

Specifically, you must address the following rubric criteria:

  • Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information.
  • Completeness: Prepare entries that are complete for each month, including transferring posted entries to T accounts.
  • Inventory Valuation: Prepare entries for the month of December to reflect the new line of products offered by the company, which includes using the entries from the “Inventory Valuation” tab to complete your journal for the month of December.

Guidelines for Submission

Using the provided template, submit your company accounting workbook with the following portions completed: October, November, and December journal entries; the “T Accounts” tab; and the “Inventory Valuation” tab. This should be completed and submitted using Microsoft Excel. Please note that there are drop-down menus embedded in the “Accounts” columns as well as formulas throughout the spreadsheet to help you complete the workbook without accidentally introducing errors.

Unformatted Attachment Preview

Accounting Data Appendix 1. The following events occurred in October: October 1: The business owner used $25,000 from their personal savings account to buy common stock in their company. October 1: Purchased $8,500 worth of baking supplies from vendor, on account. October 3: The company borrowed $10,000 in cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity. October 7: Entered into a lease agreement for bakery space. The agreement is for one year. The rent is $1,500 per month; the last month’s rent payment of $1,500 is required at the time of the lease agreement. The payment was made in cash. Lease period is effective October 1 of this year through September 30 of the next. October 10: Paid $375 to the county for a business license. October 11: Purchased a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment). October 13: The owner has baking equipment, including an oven and mixer, which they have been using for their home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a five-year useful life. October 13: Paid $200 for business cards and flyers to use for advertising. October 14: Paid $300 for office supplies. October 15: Hired a part-time helper to be paid $12 per hour. One pay period is the first of the month through the fifteenth, and the other is the sixteenth through the end of the month. Paydays are the twentieth for the first pay period and the fifth of the following month for the second pay period. (No entry required on this date—for informational purposes only.) October 30: Received telephone bill for October in amount of $75. Payment is due on November 10. October 31: Paid $1,200 for a 12-month insurance policy. Policy effective dates are November 1 through October 31. October 31: Accrued wages earned for employee for period of October 16 through October 31. (See Wage Calculation Data table at the end of this document.) October 31: Total October bakery sales were $15,000 ($5,000 of these sales on accounts receivable). 2. The following events occurred in November: November 5: Paid employee for period ending October 31. November 8: Received payments from customers toward accounts receivable in amount of $3,800. November 10: Paid October telephone bill. November 15: Purchased additional baking supplies in amount of $5,000 from vendor, on account. November 15: Accrued wages earned for employee from period of November 1 through November 15. (See Wage Calculation Data table at the end of this document.) November 15: Paid rent on bakery space. November 18: Received payments from customers toward accounts receivable in amount of $1,000. November 20: Paid $8,500 toward baking supplies vendor payable. November 20: Paid employee for period ending November 15. November 22: Purchased $300 in office supplies. November 30: Received telephone bill for November in amount of $75. Payment is due on December 10. November 30: Accrued wages earned for employee for period of November 16 through November 30. (See Wage Calculation Data table at the end of this document.) November 30: November bakery sales total was $20,000 ($7,500 of this total on accounts receivable). 3. Many customers have been asking for more allergy-friendly products, so in December the bakery started carrying a line of gluten-free products on a trial basis. The information below relates to the purchase and sales of the new products. Use the perpetual inventory method with the FIFO valuation method. Please see the “Inventory Valuation” tab in your workbook for purchase and sales information. The following events occurred in December: December 1: Paid dividends to self in amount of $10,000. December 5: Paid employee for period ending November 30. December 7: Purchased merchandise for resale. See the “Inventory Valuation” tab for details. December 8: Received payments from customers toward accounts receivable in amount of $4,000. December 10: Paid November telephone bill. December 11: Purchased baking supplies in amount of $7,000 from vendor on account. December 13: Paid on supplies vendor account in amount of $5,000. December 15: Accrued employee wages for period of December 1 through December 15. December 15: Paid rent on bakery space $1,500. December 15: Recorded merchandise sales transaction. See the “Inventory Valuation” tab for details. December 15: Recorded impact of sales transaction on COGS and the inventory asset. See the “Inventory Valuation” tab for details. December 20: Paid employee for period ending December 15. December 20: Purchased merchandise inventory for resale to customers. See the “Inventory Valuation” tab for details. December 24: Recorded sales of merchandise to customers. See the “Inventory Valuation” tab for details. December 24: Recorded impact of sales transaction on COGS and the inventory asset. See the “Inventory Valuation” tab for details. December 30: Purchased merchandise inventory for resale to customers. See the “Inventory Valuation” tab for details. December 31: Accrued employee wages for period of December 16 through December 31. December 31: Total December bakery sales were $25,000 ($6,000 of these sales on accounts receivable). 4. On December 31, the following adjustments must be made: • • • • • Depreciation of baking equipment transferred to company on October 13. Assume half month of depreciation in October using the straight-line method. Accrue interest for note payable. Assume a full month of interest for October. (6% annual interest on $10,000 loan) Record insurance used for the year. Actual baking supplies on hand as of December 31 are $1,100. Office supplies on hand as of December 31 are $50. Wage Calculation Data Month 31-Oct 15-Nov 30-Nov 15-Dec 31-Dec Hours 10 40 35 38 40 Rate 12 12 12 12 12 Pay 120 480 420 456 480 This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. Asset Accounts Acct # Cash Baking Supplies Prepaid Rent Prepaid Insurance Baking Equipment Office Supplies Accounts Receivable Accumulated Depreciation Merchandise Inventory 101 102 103 104 105 106 107 108 109 Liability Accounts Acct # Notes Payable Accounts Payable Wages Payable Interest Payable 201 202 203 204 Equity Accounts Acct # Common Stock Dividends Cost of Goods Sold 301 302 303 Revenue Accounts Acct # Bakery Sales Merchandise Sales 401 402 Expense Accounts Acct # Baking Supplies Expense Rent Expense Insurance Expense Misc. Expense Business License Expense Advertising Expense Wages Expense Telephone Expense Interest Expense Depreciation Expense Office Supplies Expense 501 502 503 504 505 506 507 508 509 510 511 A Company General Journal Entries October, 20xx Date 1-Oct Accounts Debit Credit $ $ 1-Oct 3-Oct 7-Oct 10-Oct 11-Oct 13-Oct 13-Oct 14-Oct 30-Oct 31-Oct 31-Oct 31-Oct Total - - A Company General Journal Entries November, 20xx Date Accounts Debit Credit Total - - A Company General Journal Entries December, 20xx Date Accounts Debit Credit Total - - date 1-Oct $ 3-Oct Cash - 8-Nov - 30-Nov 8-Dec 15-Dec 24-Dec 31-Dec 11-Oct date Notes Payable - date 3-Oct - 8-Nov 18-Nov - 8-Dec - 31-Oct 18-Nov date - 7-Oct 10-Oct 11-Oct 13-Oct 14-Oct 31-Oct - 5-Nov - 10-Nov - 15-Nov 20-Nov 20-Nov 22-Nov - 1-Dec 5-Dec 7-Dec - 10-Dec 13-Dec 15-Dec - 20-Dec - 20-Dec - 30-Dec Accounts Rec. 31-Oct - 30-Nov 31-Dec - 0 0 - - Misc. expense - - 13-Oct Baking equipment - 0 Baking supplies 1-Oct 15-Nov 11-Dec - Office supplies 14-Oct 22-Nov - - - Prepaid rent 7-Oct - Prepaid insurance 31-Oct - Accounts payable 10-Nov 20-Nov 10-Dec 13-Dec - 1-Oct 31-Oct - 15-Nov - 30-Nov - 11-Dec - 31-Oct 15-Nov 30-Nov 15-Dec 31-Dec Salary and wages expense - - Telephone expense 30-Oct 30-Nov - Dividends 1-Dec - Merchandise - - 15-Dec 24-Dec Business License exp 10-Oct - Common Stock $ 0 0 Insurance expense 13-Oct Advertising expense - 1-Oct 13-Oct Rent expense 7-Oct 15-Nov 15-Dec - - Bakery Sales - 5-Nov 20-Nov 5-Dec 20-Dec Salaries and wages payable - - COGS 15-Dec - - 31-Oct 30-Nov 31-Dec 31-Oct 15-Nov 30-Nov 15-Dec 31-Dec 24-Dec - 7-Dec 20-Dec 30-Dec Merch. Inv. FIFO - 15-Dec - 24-Dec - - FIFO Purchases Date 7-Dec No. of Items Sales Unit Price Total Price 10 $ 6.00 $ 60.00 15-Dec 20-Dec Net Inventory Unit Price Total Price 20 $ 6.10 $ 55 6.00 $ 48.00 122.00 6.05 $ 151.25 $ 333.25 2 2 20 22 2 $ 16 $ 18 25 $ No. of Items 10 8 $ 24-Dec 30-Dec No. of Items 6.00 $ 6.10 $ $ 12.00 97.60 109.60 4 4 25 29 26 $ 157.60 29 Ending Inventory Unit Price Total Price $ 6.00 $ 60.00 $ 6.00 $ 12.00 $ $ 6.00 $ 6.10 $ $ 12.00 122.00 134.00 Date 7-Dec Merchandise Inventory (10 x $6) Cash Purchased inventory Dr 60.00 15-Dec Cash (8 x $8.50) Merchandise Sales Revenue Record sale of inventory 68.00 15-Dec Cost of Goods Sold (8 X $6) Merchandise Inventory Recorded the cost of goods sold 48.00 $ 6.10 $ 24.40 $ $ 6.10 $ 6.05 $ $ 24.40 151.25 175.65 20-Dec Merchandise Inventory (20 x $6.10 ) Cash 122.00 $ 175.65 24-Dec Cash (18 x 8.50) Merchandise Sales Revenue Record sale of inventory 153.00 24-Dec Cost of Goods Sold (2 x $6)+(16 x $6.10) Merchandise Inventory Recorded the cost of goods sold 109.60 30-Dec Merchandise Inventory (25 x $6.05) Cash 151.25 Purchases Cr 60.00 68.00 48.00 122.00 153.00 109.60 151.25 12/7: 10 boxes purchased at $6 12/20: 20 boxes purchased at $6.10 12/30 : 25 boxes purchased at $6.05 Sales – selling price, $8.50 a box 12/15: 8 boxes 12/24: 18 boxes A Company Trial Balance 20xx Account Unadjusted trial balance Debit Credit Cash Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Baking Equipment Accumulated Depreciation Office Supplies Accounts Receivable Notes Payable Interest Payable Accounts Payable Wages Payable Common Stock Dividends Bakery Sales Merchandise Sales Baking Supplies Expense Rent Expense Interest Expense Insurance Expense Depreciation Expense Misc. Expense Office Supplies Expense Business License Expense Advertising Expense Wages Expense Telephone Expense COGS - Total: - Adjusting entries Debit - - - sting entries Adjusted trial balance Debit Credit Credit - - - - - - A Company Adjusting Journal Entries 20XX Date Accounts Debit Credit 31-Dec Depreciation Expense Accumulated Depreciation - - A Company Income Statement For Qtr. Ending 12/31/20XX Revenues Total Revenues Gross Profit - Operating Expenses: - Total Operating Expenses: - Net Income - A Company Statement of Stockholder's Equity For Qtr. Ending 12/31/20xx Common Stock Beginning Balances, September 30 Retained Earnings 0 Total 0 0 Issued Common Stock Net Income Dividends Ending Balances, December 31: - - - A Company Balance Sheet As of December 31, 20XX Assets Current Assets: Total Current Assets - Non-Current Assets: Baking Equipment (Net) - Total Assets: - er 31, 20XX Liabilities and Owners' Equity Current Liabilities: Total Current Liabilities - Long Term Liabilities: Total Long Term Liabilities: - Total Liabilities: - Shareholder's Equity: Total Equity - Total Liabilities & Equity - A Company Closing Entries Qtr ending 12/31/20xx Date Accounts 31-Dec Bakery Sales Merchandise Sales Retained Earnings 31-Dec Retained Earnings Baking Supplies Expense Rent Expense Wages Expense Office Supplies Expense Business License Expense Office Expense Depreciation Expense Insurance Expense Advertising Expense Interest Expense Telephone Expense COGS 31-Dec Retained Earnings Dividends Debit Credit A Company Post-Closing Trial Balance Qtr. Ending 12/31/20xx Account Unadjusted Trial Balance Debit Credit Cash Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Baking Equipment Accumulated Depreciation Office Supplies Accounts Receivable Accounts Payable Wages Payable Interest Payable Notes Payable Common Stock Retained Earnings Total - - Milestone One Guidelines and Rubric v < Listen Overview In previous modules, you examined the initial stages of the accounting cycle and practiced journalizing financial transactions. In Milestone One, you will complete the first part of your course project to demonstrate your ability to accurately record financial data, which will continue to be used to complete other parts of the project. Scenario You are a certified public accountant (CPA) who is working with a small bakery to prepare their financial statements for three months of the current fiscal year. Because the company is a startup and so small, the accounting is done manually in Microsoft Excel. You have been given the accounts and information you need to prepare their financial statements, but you will need to use the accounting cycle to report accurate information to the finance department Prompt Record Financial Data: Use accepted accounting principles to accurately capture business transactions for October, November, and December in the Company Accounting Workbook Template using the data provided in the Accounting Data Appendix document. Specifically, you must address the following rubric criteria: • Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information. • Completeness: Prepare entries that are complete for each month, including transferring posted entries to T accounts. • Inventory Valuation: Prepare entries for the month of December to reflect the new line of products offered by the company, which includes using the entries from the "Inventory Valuation" tab to complete your journal for the month of December Guidelines for Submission Using the provided template, submit your company accounting workbook with the following portions completed: October, November, and December journal entries; the "T Accounts" tab; and the "Inventory Valuation" tab. This should be completed and submitted using Microsoft Excel. Please note that there are drop-down menus embedded in the "Accounts" columns as well as formulas throughout the spreadsheet to help you complete the workbook without accidentally introducing errors.
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Explanation & Answer

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General Journal Entries
OCTOBER
Accounts

Debit

Cash
Common Stock

$10,000

Baking Supplies
Accounts Payable

$6,500

Cash
Notes Payable

$10,000

Rent Expense
Pre-paid Rent
Cash

$1,500
$1,500

Buisness License Expense
Cash

$375

Misc . Supplies
Cash

$250

Baking Equipment
Common Stock

$6,000

Advertising Expense
Cash

$200

Office Supplies
Cash

$300

Telephone Expense
Accounts Payable
Pre-paid Insurance
Cash
Wages Expense
Wages Payable
Cash
Accounts Recievable

$75

$2,400

$120

10,000.00
5,000.00

Bakery Sales

Total

54,220.00

108,440.00

Credit
$10,000

$6,500

$10,000

$3,000

$375

$250

$6,000

$200

$300

$75

$2,400

$120

15,000.00

54,220.00

108,440.00

Peyton Approved
General Journal Entries
Aug-18
Date

Accounts
Wages Payable
Cash
Cash
Accounts Recievable

Debit
120.00

3,800.00

Accounts Payable
Cash

$75

Baking Supplies
Accounts Payable

$5,000

Wages Expense
Wages Payable

$480

Cash
Accounts Receivable

3,000.00

Rent Expense
Cash

1,500.00

Cash
Accounts Receivable

3,000.00

Accounts Payable
Cash

8,500.00

Wages Payable
Cash
Misc. Supplies
Cash
Accounts Receivable
Telephone Expense
Wages Expense
Wages Payable

480.00

$300

$75

420.00

Accounts Receivable
Cash
Bakery Sales

7,500.00
12,500.00

Total

46,750.00

Credit
120.00

3,800.00

$75

$5,000

$480

3,000.00

1,500.00

3,000.00

8,500.00

480.00

300.00

75.00

420.00

20,000.00
$ 46,750.00

Peyton Approved
General Journal Entries
Sep-18
Date

Accounts
Dividends
cash
Wages Payable
Cash
Merchandise Inventory
Cash
Cash
Accounts Receivable

Debit
10,000.00

10,000.00
480.00
480.00
60.00
60.00
4,000.00
4,000.00

Accounts Payable
Cash

$75

Baking Supplies
Accounts Payable

$7,000

Accounts Payable
Cash

5,000.00

Wages Expense
Wages Payable
Rent Expense
Cash

Credit

$75

$7,000

5,000.00
$480
$480
1,500.00
1,500.00

Cash
Merchandise Sales

68.00

Cost of Goods sold
Merchandise Inventory

48.00

68.00

48.00

Wages Payable
Cash

456.00

Merchandise Inventory
Cash

122.00

456.00

122.00

Cash
Merchandise Sales

153.00

Cost of goods sold
Merchandise Inventory

109.60

Merchandise Inventory
Cash

151.25

Wages Expense
Wages Payable

480.00

Accounts Receivable
Cash
Bakery Sales
Total

153.00

109.60...


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