ACC 201 Final project

 

ACC 201 Project Guidelines and Rubric

Competencies

In this project, you will demonstrate your mastery of the following competencies:

• Record and present financial information by applying the appropriate framework and guidelines of accounting for business transactions
• Determine asset accounts and their disclosure in the financial statements
• Determine liability and equity accounts and their disclosure in the financial statements

Scenario

You were recently hired as an entry-level bookkeeper for a service business that recently opened. This is the first month in operation for the business and your first task is to record business transactions for their first month using the source documents and transaction data the owner will provide to you. Because this is a small business that does not use computerized accounting, you will apply the accounting cycle in Excel to record transactions and generate financial reporting results for the owner.

Directions

Company Accounting Workbook

Use accepted accounting principles to follow and record your business transactions for a one-month period from the first step of the accounting cycle through the reporting process. You will build on the workbook you created in Milestones One and Two, or you may start over with the blank Company Accounting Workbook Template (linked below in the

What to Submit

section), incorporating instructor feedback where applicable. After you complete your workbook, you will prepare a summary report of your work.

Your completed accounting workbook will consist of journal entries for each transaction and postings of transactions to account ledgers. You will develop a trial balance from the ledger balances, and use these balances to prepare the income statement, statement of owner’s equity, and the balance sheet. After the preparation of the financial statements, closing entries will be entered to transfer earnings to equity and prepare temporary accounts for the new accounting period.

Use the instructions below to complete your workbook. Specifically, you must address the following rubric criteria:

Record Financial Data: Use accepted accounting principles to accurately capture business transactions for the month using the data provided in the accounting data appendix (linked in the

Supporting Materials

section). You will need to address the following:

Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information.
Completeness: Prepare entries that are complete for the month, including transferring posted entries to T accounts.
Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the “Trial Balance” tab of the company accounting workbook, ensuring that the total debits and credits match.

Financial Statements: Create financial statements using appropriate methods based on accepted accounting principles. Be sure to prepare these financial statements in the order listed, as there are important interdependencies among them. Finalize the process by closing temporary accounts.

Income Statement: Prepare the income statement using the adjusted trial balance.
Statement of Owner’s Equity: Prepare the statement of owner’s equity using the adjusted trial balance.
Balance Sheet Assets: Prepare the balance sheet asset entries using the adjusted trial balance.
Balance Sheet Liabilities: Prepare the balance sheet liabilities entries using the adjusted trial balance.
Closing Entries: Complete the “Closing Entries” tab of the company accounting workbook by closing all temporary income statement amounts to create closing entries.

Summary Report

After you have finished preparing all the financial statements, analyze the statements and write a short report summarizing your findings. Use the template provided in the What to Submit section to complete your report. There is also a

Final Project Walkthrough

video available in Supporting Materials that will provide guidance for completing your template. In addition to the financial statement results, the owners have requested that you provide them with additional information as further growth is anticipated. They would like more input from you to support the best possible decisions for the business.

In addition, the owners are requesting that you provide them with some suggestions on simple internal controls they can integrate to ensure protection of company assets, and accuracy in the company’s financial data. The owners are also considering acquiring more long-term/fixed assets, such as vehicles, equipment, buildings, and so on. They would like your input on the different options available for depreciation of these costs. Adding sales of product is also a consideration for expansion. The owners want to know what accounting considerations will be involved with this change.

1. Summary: Write a summary of what the financial statements indicate about the company’s financial health and performance.

   Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user.
   Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data.

   Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.

   Analysis: Explain the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets position.
   Results: Discuss the results regarding profitability of the first month of operations.

   Consider how well the company is positioned to meet current liabilities.
   Be sure to include the percentage of revenues that result in profit/net income and the current ratio when discussing profitability and liquidity based on the recorded month’s results.
   Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profit/net income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)?

   Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of their financial data as they anticipate further growth.

   Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.

   Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet.

   Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined.
   Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising.
   Consider how accounting will change with the addition of merchandise inventory.

What to Submit

To complete this project, you must submit the following:

Company Accounting Workbook
Your workbook should be completed and submitted as a Microsoft Excel file based on the template provided.

Project Summary Report

Use this template to submit a 1- to 2-page Word document summarizing the financial statements you created.

Supporting Materials

The following resources support your work on the project:

Resource:

Accounting Data Appendix

This resource includes all the existing financial information needed to complete your project.

Website:

Microsoft Excel Help & Learning

This tutorial from Infobase provides helpful information on how to use the basic features of Microsoft Excel. Use the table of contents to select the tutorials that best suit your needs.

Video: Final Project Walkthrough (7:48)
This video walkthrough is available if you need additional assistance completing your project. The video uses a sample data set for illustrative purposes.

A video transcript is available:

Transcript for ACC 201 Final Project Walkthrough

Project Rubric

CriteriaExemplary (100%)Proficient (85%)Needs Improvement (55%)Not Evident (0%)ValueRecord Financial Data: AccuracyPrepares accurate entries with no errorsPrepares accurate entries with minimal errorsPrepares entries that have significant inaccuraciesDoes not attempt criterion5Record Financial Data: CompletenessPrepares entries that are complete for the month, including transferring posted entries to T accounts, with no errorsPrepares entries that are complete for each month, including transferring posted entries to T accounts, with minimal errorsPrepares entries that are complete for each month, including transferring posted entries to T accounts, with significant errorsDoes not attempt criterion5Accrual Basis: Unadjusted Trial BalancePrepares the unadjusted trial balance accurately, ensuring the total debits and credits match with no errorsPrepares the unadjusted trial balance with minimal errorsPrepares the unadjusted trial balance with significant errorsDoes not attempt criterion5Financial Statements: Income StatementPrepares the income statement using the adjusted trial balance with no errorsPrepares the income statement using the adjusted trial balance with minimal errorsPrepares the income statement using the adjusted trial balance with significant errorsDoes not attempt criterion5Financial Statements: Statement of Owner’s EquityPrepares the statement of owner’s equity using the adjusted trial balance with no errorsPrepares the statement of owner’s equity using the adjusted trial balance with minimal errorsPrepares the statement of owner’s equity using the adjusted trial balance with significant errorsDoes not attempt criterion5Financial Statements: Balance Sheet AssetsPrepares the balance sheet assets using the adjusted trial balance with no errorsPrepares the balance sheet assets using the adjusted trial balance with minimal errorsPrepares the balance sheet assets using the adjusted trial balance with significant errorsDoes not attempt criterion5Financial Statements: Balance Sheet LiabilitiesPrepares the balance sheet liabilities using the adjusted trial balance with no errorsPrepares the balance sheet liabilities using the adjusted trial balance with minimal errorsPrepares the balance sheet liabilities using the adjusted trial balance with significant errorsDoes not attempt criterion5Financial Statements: Closing EntriesCompletes closing entries by closing all temporary income statement amounts to create closing entries with no errorsCompletes closing entries by closing all temporary income statement amounts to create closing entries with minimal errorsCompletes closing entries by closing all temporary income statement amounts to create closing entries, but there are significant errorsDoes not attempt criterion5Summary: PurposeExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerDiscusses the accounting process and the resulting financial statements as they relate to meeting the informational needs of the userShows progress toward proficiency, but with errors or omissions; areas for improvement may include errors in the description of the accounting process or how the financial statements relate to the needs of the userDoes not attempt criterion10Summary: ProcessExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerExplains the process used to produce accurate account balances and financial statements from the individual transaction dataShows progress toward proficiency but with errors or omissions; areas for improvement may include missing relevant details about the account balance and financial statement processDoes not attempt criterion10Summary: AnalysisExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerExplains the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets positionShows progress toward proficiency but with errors or omissions; areas for improvement may include missing relevant details about the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets positionDoes not attempt criterion10Summary: ResultsExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerDiscusses the results regarding profitability of the first month of operationsShows progress toward proficiency but with errors or omissions; areas for improvement may include insufficient explanation of current liabilities or missing explanations of profitability and liquidityDoes not attempt criterion10Summary: RecommendationsExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerRecommends a simple system of controls that can be implemented to ensure protection of company assets, and the accuracy and integrity in their financial data as they anticipate further growthShows progress toward proficiency but with errors or omissions; areas for improvement may include omission of controls related to company assets or the accuracy and integrity of financial dataDoes not attempt criterion10Summary: Asset ValuationExceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative mannerDiscusses the treatment of current and long-term assets on the balance sheetShows progress toward proficiency but with errors or omissions; areas for improvement may include missing methods of depreciation, how long-term asset methods will differ, or how accounting might change with the addition of inventoryDoes not attempt criterion10Total:100% 

Chart of

Account

s

Accounts

Acct #

Acct #

(contra asset)

Accounts

Acct #

Acct #

Cash
Prepaid Rent
Prepaid Insurance
Office Supplies
Accounts Receivable
Accumulated Depreciation
Notes Payable
Accounts Payable
Wages Payable
Business License Expense
Advertising Expense
Wages Expense
Depreciation Expense

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

Liability Accounts

Equity

Acct #

Cash

101

Notes Payable

201

Owner’s Capital

301

Accounts Receivable

102

Accounts Payable

202

Owner Draws

302

Prepaid Rent

103

Wages Payable

203

Prepaid Insurance

104

Office Supplies

105

Vehicle

106

Accumulated Depreciation

107

Revenue

Service Revenue

401

Expense Accounts

Rent expense

501

Business License Expense

502

Telephone expense

503

Repairs and Maintenance

504

Advertising Expense

506

Wages Expense

507

Depreciation Expense

508

Baking Supplies

Baking Equipment

Merchandise Inventory

Interest Payable

Common Stock

Dividends

Bakery Sales

Merchandise Sales

Baking Supplies Expense

Rent Expense

Insurance Expense

Misc. Expense

Telephone Expense

Interest Expense

Office Supplies Expense

Cost of Goods Sold

General Journal

s and credits must always equal!

Accounts
Debit

– 0

A Company

General Journal Entries

Journal Entry Tips

The debited account is recorded first, credited account recorded second.

Debit

Date

Credit

There can be compound entries in which two accounts receive a debt to an equivalent credited amount to one account.

Be sure to use your chart of accounts (the first page of this workbook).

Each account you will record to is already listed and organized by classification of the account.

Total

– 0

If Red, this means your debits and credits do not equal. Be sure to review for errors.

Ledger Accounts

Assets Liabilities

Equity

Revenue

Expenses

Cash

Notes Payable

Owner’s Capital

Service Revenue

Rent Expense
$ – 0

$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

$ – 0

$ – 0

$ – 0
Accounts Rec.

Accounts Payable

Owner Draws

Business License Expense

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

$ – 0

$ – 0

Prepaid Rent

Wages Payable

Telephone Expense
Posting to the ledger/t accounts Don’t overthink it! You are just posting each debit and credit from the journal entries to the account you identified in the entry. These accounts are set to calculate your balances for you. Please be careful not to delete the running totals as those will calculate the ending balance.

The ending balance will transfer to the

Trial Balance

sheet.

If you have posted all entries and your trial balance is not in balance (total debits = total credits),

$ – 0
$ – 0

$ – 0
$ – 0

this means that there is an error.

$ – 0
$ – 0

$ – 0

$ – 0

$ – 0

Prepaid Insurance

Repairs & Maint.

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

Office Supplies

Advertising Expense

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

Vehicle

Wages Expense

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

Accumulated Depreciation

Depreciation Expense

$ – 0
$ – 0

$ – 0
$ – 0

$ – 0

$ – 0

Trial Balance

Trial Balance
Account
Debit
Credit

Trial Balance

Cash
– 0

Accounts Receivable
– 0

Prepaid Rent
– 0

Prepaid Insurance
– 0

Vehicle
– 0
Office Supplies
– 0
Accumulated Depreciation

– 0

Notes Payable

– 0

Accounts Payable

– 0

Wages Payable

– 0

Owner’s Capital

– 0

Owner Draws
– 0
Service Revenue

– 0

Rent Expense
– 0
Business License Expense
– 0
Telephone Expense
– 0

– 0

Advertising Expense
– 0
Wages Expense
– 0
Depreciation Expense
– 0

– 0
– 0

As of 06/30/20XX

Unadjusted trial balance

Balances from the t accounts will autofill your trial balance.

If total debits do not equal total credits in the trial balance, you know you have an error.

These are the balances that will be used to prepare the financial statements.

Be sure to implement feedback provided by your instructor for this Milestone One submission!

Repairs and Maintenance Expense

Retained Earnings

Total:

Debits should equal credits

`

Income Statement

A Company

Income Statement

$ – 0

– 0

– 0

For Month ending 06/30/20XX

Revenues

Total Revenues

Operating Expenses:

Total Operating Expenses:

Net Income

Statement of

Owner’s Equity

Statement of Owner’s Equity

$ – 0

$ – 0

Owner Draws

$ – 0

Company Name

Period Ending 06/30/20XX

Beginning Capital on 6/01/20XX

Increases to capital

Net income/loss:

Owner Contributions

Subtotal:

Decreases to capital

Ending Equity as of 06/30/20XX

Balance Sheet

A Company

Balance Sheet

Assets

– 0

– 0

– 0

– 0

Owner’s Equity

– 0

– 0

– 0

– 0

As of June 30, 20XX
Liabilities and Owners’ Equity
Current Assets:	Current Liabilities:
Total Current Liabilities
Long Term Liabilities:
Total Current Assets	Total Long Term Liabilities:
Total Liabilities:
Non-Current Assets:
Total Equity
Total Non Current/Fixed Assets
Total Assets:	Total Liabilities & Equity	<== Total Assets on the left should equal Liabilities + Owner's Equity on the right.

Closing Entries

A Company

Date
Accounts
Debit
Credit

30-Jun

30-Jun

30-Jun

– 0
– 0

Closing Entries
Month ending 06/30/20XX
			30-Jun
Close revenues
Close Expenses
Close Income Summary
Close Owners Draw

image1

image2

Summary Report: Financial Statements

2

[
Note: To complete this template, replace the bracketed text with your own content. Remove this note before you submit your report.]

Summary Report: Financial Statements

[Your Name]

Southern New Hampshire University

Summary Report: Financial Statements 1

Introduction

[In this section, include the purpose of the report. Describe the kind of information these financial statements provide to various aspects of the business.]

Process

[In this section you will discuss the process you used to generate accurate financial statement results for the business owner from the list of business transactions provided. Explain what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.]

Financial Statement Analysis

[This section should center on your analysis of the financial performance of the company based on the statements you prepared. Discuss key points on your observations of results: Is the company operating profitably (what percent of revenues result in profit/net income)? How well poised are they to meet liabilities (discuss liquidity and current ratio)?.]

Internal Controls

[Provide suggestions for a simple system of internal controls to assist the owners in protecting assets and ensuring accuracy in financial data. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.]

Looking to the Future

[In response to the owner’s request for additional information and support for future growth, discuss accounting considerations associated with the acquisition of additional long term/fixed assets, and the addition of merchandise inventory. How will the company account for the costs of long-term assets? How will the method of depreciation be determined? (Expand on 2 different methods of depreciation to demonstrate ideal application). How does accounting change with the addition of merchandise inventory? How will it be determined which inventory costing method to apply? (Discuss how the FIFO, LIFO, and Average methods differ and provide examples of the types of merchandising scenarios that would be ideally applicable in each case.)]

ACC 201 Accounting Data Appendix

The following events occurred in June:

·
June 1: Owner contributed $50,000 in cash to the business.

·
June 1: Owner purchased a company vehicle in the amount of $15,000.

·
June 3: Owner took out a small business loan in the amount of $25,000.

·
June 5: Owner paid rent for June, and prepaid office rent for a 6-month period to cover July through December at $1,195 per month.

· June 5: Owner paid business license fees in the amount of $250 to the county.

·
June 5: Owner ordered office supplies, on account, in the amount of $750.00.

·
June 6: Owner performed service for client on account in the amount of $1,000.

· June 9: Owner provided service for client in the amount of $1,500. Customer paid $750 at time of service. Client will be billed for the balance due.

· June 10: Owner paid $250 in advertising costs to the local paper.

·
June 15: Owner recorded wages due to the part-time employee in the amount of $325. This will be paid on June 20.

· June 15: Owner prepaid business insurance to cover July through December at the rate of $125 per month.

·
June 20: Owner paid wages due to part-time employee from period ending June 15.

·
June 21: Owner paid for plumbing repairs in the office in the amount of $210.

·
June 22: Owner withdrew $1,000 cash for personal use.

·
June 23: Customer paid balance due from June 6 service in the amount of $1,000.

·
June 25: Owner provided service to client in the amount of $800. Client paid at time of service.

·
June 28: Owner paid balance due for office supplies purchase on June 5.

·
June 29: Owner performed service for client on account in the amount of $2,225.00.

·
June 30: Owner received telephone bill for month of June in the amount of $155 and recorded the expense. This bill will not be paid until July.

·
June 30: Last day of pay period; owner owes part-time worker $325 for the June 16 through June 30 pay period. This will be paid on July 5.

·
June 30: Record depreciation on vehicle at $250.

image1

Chart of

Account

s

Accounts

Acct #

Acct #

Payable

(contra asset)

Accounts

Acct #

Acct #

Expense

Cash
Prepaid Rent

Prepaid Insurance

Office Supplies

Accounts Receivable
Accumulated Depreciation
Notes Payable
Accounts Payable

Wages Payable

Business License Expense

Advertising Expense

Wages Expense

Depreciation Expense

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

Liability Accounts

Equity

Acct #

Cash

Notes Payable

Owner’s Capital

Accounts Receivable

Accounts Payable

Owner Draws

Prepaid Rent

Wages

Prepaid Insurance

Office Supplies

Vehicle

Accumulated

Depreciation

Revenue

Service Revenue

Expense Accounts

Rent expense

Business License Expense

Telephone expense

Repairs and Maintenance

Advertising Expense

Wages Expense

Depreciation

Baking Supplies

Baking Equipment

Merchandise Inventory

Interest Payable

Common Stock

Dividends

Bakery Sales

Merchandise Sales

Baking Supplies Expense

Rent Expense

Insurance Expense

Misc. Expense

Telephone Expense

Interest Expense

Office Supplies Expense

Cost of Goods Sold

General Journal

s and credits must always equal!

Accounts
Debit

Cash

50,000.00

1-Jun

Vehicle

Cash

15,000.00

Cash

25,000.00

Prepaid Rent

Cash

7,170.00

5-Jun

Cash

250.00

5-Jun

750.00

1,000.00

Cash
750.00

Accounts Receivable
750.00

Service revenue

100,670.00

			A Company
General Journal Entries	Journal Entry Tips
The debited account is recorded first, credited account recorded second.
			Debit
	Date			Credit	There can be compound entries in which two accounts receive a debt to an equivalent credited amount to one account.
				1-Jun				50,000.00	Be sure to use your chart of accounts (the first page of this workbook).
	Owner’s Equity	Each account you will record to is already listed and organized by classification of the account.
			15,000.00
3-Jun					25,000.00
Loan Payable
					5-Jun				7,170.00
License expense									250.00
Office supplies										750.00
Accounts payable
	6-Jun	Accounts receivable					1,000.00
		Service revenue
		9-Jun
1,500.00
Total		100,670.00	If Red, this means your debits and credits do not equal. Be sure to review for errors.

Ledger Accounts

Assets Liabilities

Equity

Revenue

Expenses

Cash

Notes Payable

Owner’s Capital

Service Revenue

Rent Expense
1-Jun

$ 50,000.00 $ 7,170.00

5-Jun

$ 750.00 30-Jun

30-Jun

$ 1,000.00

$ 50,000.00
1-Jun

$ 3,225.00

30-Jun
9-Jun
$ 750.00

$ 250.00 10-Jun $

2,890.00

30-Jun
23-Jun

$ 1,000.00

$

325.00 15-Jun 25-Jun $ 800.00 $ 325.00 20-Jun $

210.00 21-Jun

$ 1,000.00

22-Jun

$ 750.00

28-Jun $ 52,550.00 $ 10,030.00 $ – 0

$ 750.00

$ 1,000.00

$ 52,890.00

$ – 0
$ 3,225.00

$ – 0
$ – 0
$ 42,520.00

$ 750.00

$ 51,890.00

$ 3,225.00
30-Jun

$ – 0
Accounts Rec.

Accounts Payable

Owner Draws

Business License Expense
6-Jun
$ 1,000.00
$ 1,000.00
23-Jun

$ 25,000.00

30-Jun

30-Jun
$ 1,000.00
9-Jun
$ 750.00
29-Jun $ 2,225.00 $ 3,975.00

$ 1,000.00

$ – 0
$ 25,000.00

$ 1,000.00
$ – 0

$ – 0
$ – 0

$ – 0
$ – 0
$

2,975.00

$ 25,000.00

$ 1,000.00

$ – 0

Prepaid Rent

Wages Payable

Telephone Expense
5-Jun
$ 7,170.00

$ 325.00
30-Jun

Posting to the ledger/t accounts Don’t overthink it! You are just posting each debit and credit from the journal entries to the account you identified in the entry. These accounts are set to calculate your balances for you. Please be careful not to delete the running totals as those will calculate the ending balance.

The ending balance will transfer to the

Trial Balance

sheet.

If you have posted all entries and your trial balance is not in balance (total debits = total credits),

$ 7,170.00
$ – 0

$ – 0
$ 325.00

this means that there is an error.

$ – 0
$ – 0

$ 7,170.00

$ 325.00

$ – 0

Prepaid Insurance

Repairs & Maint. 15-Jun
$ 750.00

$ 750.00
$ – 0

$ – 0
$ – 0

$ 750.00

$ – 0

Office Supplies

Advertising Expense
5-Jun
$ 750.00
$ 750.00
28-Jun

$ 750.00
$ 750.00

$ – 0
$ – 0

$ – 0

$ – 0

Vehicle

Wages Expense
1-Jun

$ 15,000.00

$ 250.00
30-Jun

$ 15,000.00
$ 250.00

$ – 0
$ – 0
$

14,750.00

$ – 0

Accumulated Depreciation

Depreciation Expense

$ 250.00
30-Jun

$ – 0
$ 250.00

$ – 0
$ – 0

$ 250.00

$ – 0

Trial Balance

Trial Balance
Account
Debit
Credit

Trial Balance

Cash

Accounts Receivable
2,975.00

Prepaid Rent
7,170.00

Prepaid Insurance
750.00

Vehicle
15,000.00

Office Supplies
750.00
Accumulated Depreciation

250.00

Notes Payable

25,000.00

Accounts Payable

750.00

Wages Payable

325.00

Owner’s Capital

50,000.00

Owner Draws
1,000.00
Service Revenue

Rent Expense

Business License Expense
250.00
Telephone Expense

210.00

Advertising Expense
250.00
Wages Expense
325.00
Depreciation Expense
250.00

81,830.00

As of 06/30/20XX
Unadjusted trial balance
	51,550.00	Balances from the t accounts will autofill your trial balance.
If total debits do not equal total credits in the trial balance, you know you have an error.
These are the balances that will be used to prepare the financial statements.
Be sure to implement feedback provided by your instructor for this Milestone One submission!
5,505.00
	1,195.00
	155.00
Repairs and Maintenance Expense
Retained Earnings
Total:		81,830.00
Debits should equal credits
`

Income Statement

A Company

Income Statement
Service revenue

$ 5,525.00

Rent expense

$ 250.00

Telephone expense

Wages
$ 325.00
Repairs and Maintenance

Depreciation
$ 250.00

$ 250.00

2,890.00

For Month ending 06/30/20XX
Revenues
	$		5,525.00
Total Revenues
Operating Expenses:
$ 1,195.00
Business license expense
$ 155.00
$ 210.00
	Advertising expense
Total Operating Expenses:		2,635.00
Net Income

Statement of Owner’s Equity

Statement of Owner’s Equity

$ 50,000.00

$ – 0

$ 52,890.00

Owner Draws

$ 1,000.00

$ 51,890.00

Company Name
Period Ending 06/30/20XX
Beginning Capital on 6/01/20XX
Increases to capital
Net income/loss:	$ 2,890.00
Owner Contributions
Subtotal:
Decreases to capital
Ending Equity as of 06/30/20XX

Balance Sheet

A Company

Balance Sheet

Assets

Cash
51,550.00

750.00

Accounts Receivable
2,975.00

325.00

Prepaid Rent
7,170.00

750.00

750.00

25,000.00

25,000.00

Owner’s Equity

50,000.00

Vehicle
15,000.00

14,750.00

77,945.00

As of June 30, 20XX
Liabilities and Owners’ Equity
Current Assets:	Current Liabilities:
Accounts payable
Wages payable
Total Current Liabilities	1,075.00
Prepaid insurance	Long Term Liabilities:
Office supplies	Notes payable
Total Current Assets	63,195.00	Total Long Term Liabilities:
Total Liabilities:	26,075.00
Owner’s capital
Non-Current Assets:	Add: Net income	2870
Less: Owner’s draws	-1000
Less: Accumulated depreciation	(250.00)	Total Equity	51,870.00
Total Non Current/Fixed Assets
Total Assets:		77,945.00	Total Liabilities & Equity	<== Total Assets on the left should equal Liabilities + Owner's Equity on the right.

Closing Entries

A Company

Date
Accounts
Debit
Credit
30-Jun
Service Revenue
5,525.00

5,525.00

30-Jun

2,635.00

Rent expense

1,195.00

250.00

Telephone expense

155.00

210.00

Advertising expense

250.00

325.00

Depreciation

250.00

30-Jun
Income summary
2,890.00

2,890.00

30-Jun
Owners capital
1,000.00

1,000.00

12,050.00

Closing Entries
Month ending 06/30/20XX
Income Summary
Close revenues
	Income summary
Business License expense
repairs and maintenance
Wages expense
Close Expenses
	Owners capital
Close Income Summary
Owners draw
Close Owners Draw
	12,050.00

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