Penn Foster 06168900

06168900-project

To begin, review the financial statements on pages 122 and 127 of your textbook (Exhibits 3-4 through 3-7). Then, follow-ing the instructions below, complete the electronic forms provided at the end of this file. Submission instructions are given the end of this project.1. Journalize the transactions. Omit explanations.2. Post the transactions to the general ledger, creating new ledger accounts as necessary. Calculate the new general ledger account balances.3. Prepare the unadjusted trial balance for Aqua Elite, Inc., at the end of July.4. Journalize and post the adjusting entries for July based on the following adjustment information:a. Record the expired rent.b. Supplies on hand, $350.c. Depreciation: $400 equipment, $210 furniture, $650 vehicles.d. Services performed but unbilled, $1,900.e. Accrued salaries, $675.f. Unearned service revenue earned as of July 31, $800.5. Prepare an adjusted trial balance for Aqua Elite, Inc., at the end of July.6. Prepare the Income Statement, Statement of Retained Earnings, and Balance Sheet for the three-month period May through July 20XX.7. Prepare, journalize, and post closing entries.8. Prepare a Post-Closing Trial Balance for the end of the period.

0616

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900: Graded Project Instructions & Worksheets 1

Lesson 1: Business
Accounting and You

OVERVIEW
The focus of this project is for the student to keep a set of
books through an accounting period to perform the following
functions:

n Set up the books of accounting

n Analyze and record transactions

n Post the journal entries to general ledger accounts

n Generate an unadjusted trial balance

n Calculate, journalize, and post adjusting entries

n Generate an adjusted trial balance

n Generate financial statements

n Create and post closing entries

n Generate a post-closing trial balance

INSTRUCTIONS
Use the explanation below and the information in the
assumptions section to complete the steps in the require-
ments for this accounting project.

Mike Hanson recently left his job at a local pool com-
pany to open his own pool and spa maintenance
business. Mike Hanson took all of the money he and
his wife had in their personal savings account and
used it to open Aqua Elite, Inc., on May 1, 20XX.

Assume that the following transactions for the first three
months of operations for the Hanson’s Aqua Elite, Inc., are
true and accurate.

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Graded Project Instructions

Assumptions
n Because Aqua Elite, Inc. is a new startup business, the

beginning balances in all the general ledger accounts are
zero to start.

n The length of the accounting periods are three months
using a fiscal calendar year. (A fiscal calendar is on a
yearly basis other than a calendar year—January 1st to
December 31st. For example, a fiscal calendar year can
be May 1, 2009, through April 30, 2010). Therefore,
posting to the general ledger, adjustments and closing
entries are made on a fiscal quarterly basis.

n Accounts Receivable and Accounts Payable subsidiary
ledgers aren’t being used. Any references to invoicing,
receipts, or payments “on account” assume changes to
the running balance in the Accounts Receivable and
Accounts Payable general ledger accounts.

n Payroll calculations aren’t necessary. Assume the salary
is the gross pay with no deductions taken. Therefore, the
net pay is the same as the gross pay, requiring a simpli-
fied journal entry to record the expense.

n Use the information in the Chart of Accounts that’s pro-
vided after the Requirements section below. Add general
ledger accounts if necessary.

n Print out and use the blank worksheets in this file as
needed. Work through the project by hand using copies

that has the four forms you’ll need to fill in and submit
to the school for grading at the end of the project.

This project is adapted and revised from your textbook’s Chapter 1,
pp. 47–48, Continuing Problem; Chapter 2, p. 104, Continuing Problem; and
Chapter 3, pp. 169–170, Continuing Problem.Note: Changes have been made
to the scenario. Use only the information provided here for this project.

2

of those sheets. Later, you’ll be directed to another PDF

Graded Project Instructions 3

Requirements
To begin, review the financial statements on pages 122 and
127 of your textbook (Exhibits 3-4 through 3-7). Then, follow-
ing the instructions below, complete the electronic forms
provided at the end of this file. Submission instructions are
given the end of this project.

1. Journalize the transactions. Omit explanations.

2. Post the transactions to the general ledger, creating new
ledger accounts as necessary. Calculate the new general
ledger account balances.

3. Prepare the unadjusted trial balance for Aqua Elite, Inc.,
at the end of July.

4. Journalize and post the adjusting entries for July based
on the following adjustment information:

a. Record the expired rent.

b. Supplies on hand, $350.

c. Depreciation: $400 equipment, $210 furniture, $650
vehicles.

d. Services performed but unbilled, $1,900.

e. Accrued salaries, $675.

f. Unearned service revenue earned as of July 31, $800.

5. Prepare an adjusted trial balance for Aqua Elite, Inc., at
the end of July.

6. Prepare the Income Statement, Statement of Retained
Earnings, and Balance Sheet for the three-month period
May through July 20XX.

7. Prepare, journalize, and post closing entries.

8. Prepare a Post-Closing Trial Balance for the end of the
period.

Graded Project Instructions4

May

1
Mike invested $15,000 cash and a used truck worth $13,500 in the business in exchange
for company stock.

3 Paid $4,700 cash to purchase office equipment.
7 Purchased $860 of supplies on account.
12 Performed services for cash customers and received $850.
15 Paid salaries of $675 to the office receptionist.
16 Sold the company truck for $13,500.
18 Signed a note payable for $31,000 to purchase a new truck.
21 Performed $3,200 of services on account for a local hotel chain.
27 Paid $500 of the amount owed from the purchase of supplies on May 7.
30 Received $2,000 on account from credit customers.

31
Received the utility bill for the month of May, $480. The bill is not due until the 15th
of June.

31 Paid $1,000 dividends to the shareholder, Mike Hanson.

June
1 Paid receptionist’s salary, $675.
2 Paid cash to acquire land for a future office site, $15,000.
3 Moved into a new location for the business and paid the first month’s rent, $1,800.
4 Performed service for a customer and received cash, $1,700.
5 Received $500 on account.
8 Purchased $750 of supplies on account.
11 Billed customers for services performed, $3,800.
13 Sold an additional $10,000 of stock to Mike Hanson.
16 Paid receptionist’s salary, $675.
17 Received $1,350 cash for services performed.
18 Received $1,500 from customers on account.
19 Paid $325 to be listed in the yellow pages telephone directory.
21 Paid $1,000 on account.
22 Purchased office furniture on account, $3,300.
24 Paid miscellaneous expenses, $275.
26 Billed customers for services provided, $1,000.
28 Received $300 from customers on account.
30 Paid utility bill, $745.
30 Paid receptionist’s salary, $675.
30 Paid $1,800 of dividends.

July
1 Paid three months’ rent, $4,500.
4 Performed service for a customer and received cash, $2,100.
9 Received $3,600 from customers for services to be performed later.
12 Purchased $750 of supplies on account.
15 Billed customers for services performed, $2,800.
16 Paid receptionist’s salary, $675.
22 Received $3,100 on account.
25 Paid $2,800 on account.
28 Received $1,200 cash for services performed.
30 Paid $600 of dividends.

Graded Project Instructions 5

Aqua Elite, Inc.
Chart of Accounts

May 1, 20XX

ACCOUNTS

Cash

Accounts Receivable

Supplies

Prepaid Rent

Land

Office Furniture

Accumulated Depreciation, Office Furniture

Equipment

Accumulated Depreciation, Equipment

Vehicles

Accumulated Depreciation, Vehicles

Accounts Payable

Salaries Payable

Unearned

Service Revenue

Common Stock

Dividends

Service Revenue

Notes Payable

Salary Expense

Rent Expense

Supplies Expense

Utilities Expense

Depreciation Expense, Office Furniture

Depreciation Expense, Equipment

Depreciation Expense, Vehicles

Advertising Expense

Miscellaneous Expense

When you’re confident that your work is complete and accu-

rate, open forms-06168900 and fill in the final forms.

Proofread your work carefully, and make any necessary cor-

rections. You’ll submit a copy of that completed PDF file to

the school for grading. That file will include your final work

for the following four items:

Balance Sheet

Income Statement

Statement of Retained Earnings

Post-Closing Trial Balance

These are the only four forms that will be graded. Your

journals, general ledger, and worksheet will not be evaluated.

GRADING CRITERIA
The grading criteria for the project is as follows:

The formatting of the four financial statements is worth

4 points each for a total of 16 points (4 × 4 = 16).

Calculations on the financial statements are based on

28 figures from your general ledger account. Each of those

figures that came from the general ledger account is worth

3 points for a total of 84 points (28 × 3 = 84).

Thus, the formatting of the financial statements (worth 16

points total) plus the figures used for the financial statements

(worth 84 points total) provide the 100 points for the project.

Formatting + 16 points

Figures + 84 points

Total Points 100

Graded Project: Instructions6

http://lessons.pennfoster.com/pdf/forms-06168900

Graded Project: Instructions 7

SUBMITTING YOUR PROJECT
Instructions on submitting your graded project online are
included in forms-06168900 . Click the hyperlink to
access a copy of that PDF file.

http://lessons.pennfoster.com/pdf/forms-06168900

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DATE ACCOUNTS
POST
REF. Dr. Cr.

Graded Project Instructions 9

Graded Project Instructions10

DATE ACCOUNTS
POST
REF. Dr. Cr.

Graded Project Instructions 11

DATE ITEM
POST
REF.

DEBIT CREDIT

BALANCE

DEBIT CREDIT

DATE ITEM
POST
REF. DEBIT CREDIT

BALANCE
DEBIT CREDIT

Graded Project Instructions12

ACCOUNT DEBIT CREDIT

Graded Project Instructions 13

Graded Project Instructions14

ASSETS LIABILITIES

STOCKHOLDER’S EQUITY

• Lesson 1: Graded Project

INSTRUCTIONS
Assumptions
Requirements
Grading Criteria
Forms to Submit to the School

• Blanks (to print out when working on the project)

1. Print: