Devry ACCT504 Week 3 Case Study Latest 2017 January CASE STUDY – THE COMPLETE ACCOUNTING CYCLE

    Devry ACCT504 Week 3 Case Study Latest 2017 JanuaryCASE STUDY – THE COMPLETE ACCOUNTING CYCLE
    Name: ___________________________________
    This Case Study is worth 100 points, or 10% of your final course grade.
    This Case Study relates to TCOs E and F, and Chapters 2 and 3.
    MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.
    There are 10 sheets in the Workbook, including this one.
    All of the information that you need for the project is located in this Workbook.
    Requirements Sheet in Workbook
    Requirement 1—Prepare the Journal Entries in the General Journal Journal Entries
    Requirement 2—Post Journal Entries to the General Ledger General Ledger
    Requirement 3—Prepare a Trial Balance Trial Balance
    Requirement 4—Prepare the Adjusting Entries Adjusting Entries
    Requirement 5—Post Adjusting Entries to the General Ledger General Ledger
    Requirement 6—Prepare an Adjusted Trial Balance Adjusted Trial Balance
    Requirement 7—Prepare the Financial Statements Financial Statements
    Requirement 8—Prepare the Closing Entries Closing Entries
    Requirement 9—Post Closing Entries to the General Ledger General Ledger
    Requirement 10—Prepare the Post Closing Trial Balance Post-Closing Trial Balance
    Hint for success: Review the Week 2 Lesson 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 hint.
    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 July 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.
    Requirement #1:
    During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing,
    completed the following transactions.
    July 1 Began business by making a deposit in a company bank account of $90,000, in exchange
    for 9,000 shares of $10 par value common stock.
    July 3 Paid the current month’s rent, $5,500.
    July 5 Paid the premium on a 1-year insurance policy, $4,800
    July 7 Purchased supplies on account from Little Company, $900.
    July 10 Paid employee salaries, $3,300
    July 14 Purchased equipment from Lake Company, $11,500. Paid $1,500 down and the balance was
    placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.
    Note: Use accounts payable for the balance due.
    July 15 Received cash for plumbing revenue for the first half of July, $7,700
    July 19 Made payment on account to Lake Company, $500.
    July 31 Received cash for plumbing revenue for the last half of July, $8,505
    July 31 Declared and paid cash dividends of $600
    Prepare journal entries to record the July transactions in the General Journal below. Use the following account names for journal entries.
    General Journal Chart of Accounts: Account Title (Normal Balance)
    Date Description(Account Name) Debit Credit
    Assets
    Cash (Debit)
    Prepaid Insurance (Debit)
    Supplies (Debit)
    Equipment (Debit)
    Accumulated Depreciation – Equipment (Credit)
    Liabilities
    Accounts Payable (Credit)
    Income Tax Payable (Credit)
    Stockholders’ Equity
    Common Stock (Credit)
    Retained Earnings (Credit)
    Dividends (Debit)
    Revenue
    Revenue (Credit)
    Expenses
    Rent Expense (Debit)
    Salaries Expense (Debit)
    Insurance Expense (Debit)
    Supplies Expense (Debit)
    Depreciation Expense (Debit)
    Income Tax Expense (Debit)
    0 0
    Note: Remember that debits must equal credits—All of your journal entries should balance.
    This Sheet will be used for Requirements 2, 5, and 9.
    Requirement #2:
    Post the July journal entries to the following T-accounts and compute ending balances.
    Cash (111) Revenue (411)
    Prepaid Insurance (117) Rent Expense (511)
    Supplies (119) Salaries Expense (512)
    Equipment (144) Insurance Expense (513)
    Accumulated Depreciation-Equipment (145) Supplies Expense (514)
    Accounts Payable (212) Depreciation Expense (515)
    Income Tax Payable (213) Income Tax Expense (516)
    Common Stock (311)
    Retained Earnings (312)
    Dividends (313
    Requirement #3:
    Prepare a trial balance for July in the space below.
    Melvin Plumbing Corporation
    Trial Balance
    July 31
    0 0
    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 $375.
    c) The estimated depreciation on equipment is $175.
    d) The estimated income taxes are $3,200.
    General Journal
    Date Description (Account Name) Debit Credit
    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.
    Melvin Plumbing Corporation
    Adjusted Trial Balance
    July 31
    0 0
    Requirement #7:
    Prepare the financial statements for the Melvin Plumbing Corporation as of July 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 case study.
    Melvin Plumbing Corporation Melvin Plumbing Corporation Melvin Plumbing Corporation
    Income Statement Statement of Retained Earnings Balance Sheet
    For the Month Ending July 31 For the Month Ending July 31 July 31
    Revenues: Retained Earnings, July 1 Assets:
    Revenue Add: Net Income Cash
    Subtotal Supplies
    Expenses: Less: Dividends Prepaid Insurance
    Rent Expense Retained Earnings, July 31 Equipment
    Salaries Expense Less: Accum. Depr.
    Insurance Expense Total Assets
    Supplies Expense
    Depreciation Expense Liabilities:
    Income Tax Expense Accounts Payable
    Total Expenses Income Tax Payable
    Total Liabilities
    Net Income Stockholders’ Equity:
    Common Stock
    Retained Earnings
    Total Stockholders’ Equity
    Total Liabilities and
    Stockholders’ Equity
    Requirement #8:
    Prepare the closing entries at July 31 in the General Journal below.
    General Journal
    Date Description (Account Name) Debit Credit
    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 July 31 in the space below.
    Melvin Plumbing Corporation
    Post-Closing Trial Balance
    July 31
    0 0

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