Accounting Cycle Project – Solid Footing 6e Project is Activated

QUESTION

Accounting Cycle Project – Solid Footing 6eProject is ActivatedFirst Name: JohnLast Name: NowickiID Code: 06477985Killy/Swartz10:10Before you begin working, save your activated projectby following the directions in the SAVING YOUR PROJECT box >>Instructions:You will be recording the July 2013 transactions for Lenny’s Lawn Service, Inc. After recordingthe July transactions you will be preparing a Pre-Closing Trial Balance, Income Statement,Statement of Stockholders’ Equity, Balance Sheet, and Post-Closing Trial Balance.As you work on your project, be sure to save your file often.B12SAVING YOUR PROJECT — Immediately after ActivationSave your project in a file that uses your name as the file name. The file name should be in theform: LastNameFirstName-ACP.xls For example, Mary Smith would save her project with thefile name SmithMary-ACP.xlsWindows Excel 2010 and Excel 2003, follow these directions:- Click File- Click Save As- In File name: enter LastNameFirstName-ACP.xls- Click SaveYou are given the following:Windows Excel 2007, follow these directions:_____- Click the Office Button in the upper left corner of your screen- Point to Save As- Click Excel 97-2003 Workbook- In File name: enter LastNameFirstName-ACP.xls- Click SaveAny time you save your project, if Excel 2007 asks you: Do you want to increase the security ofthis document by converting to an Office Open XML format? Always click NoJuly 2013 transactions and Additional Information — Trans tabChart of Accounts with Account Numbers and Account Names — Chart Accts tabGeneral Journal pages — Journal tabLenny’s General Ledger — GL Assets, GL Liab-Equity, GL Rev-Exp-Div tabsForms for the July 31, 2013 Pre-Closing Trial Balance, Income Statement,Statement of Stockholders’ Equity, Balance Sheet, and Post-Closing Trial BalanceTrial Bal, IS & SEquity, BalSht, and Post Close TB tabsTo Complete Your Project do the following:_ Print the July Transactions (click the Trans tab and then click the Printer Icon)_ Print the Chart of Accounts (click the Chart Accts tab and then click the Printer Icon)Mac Excel 2011, follow these directions:- Click File- Click Save As- In Save As: enter LastNameFirstName-ACP.xls- Format should be Excel 97-2004 Workbook (xls)- Click Save- Always Click Continue to the message X "This workbook contains features that will not …."_ Record the July transactions in the General Journal. Click the Journal tab and recordyour entries directly into the General Journal. Look at the July 1 Notes Payabletransaction, which has already been entered, for an example of how to make your entries.Do not put the "X" in the Posted column at this time. Use the printed Chart of Accountsas a reference source for the Account Numbers and Account Names that are availablein Lenny’s accounting system._ To make posting from the General Journal to the General Ledger easier, it is recommended thatyou print the General Journal — click the Journal tab and then click the Printer Icon.Steps 1 and 2in the Accounting CycleStep 1For each business transactionthat occurs during the accountingperiod, determine the effect of thetransaction on the General Ledgeraccounts._ Post the entries from the printed General Journal to the General Ledger accounts. Click theGL Assets, GL Liab-Equity, and GL Rev-Exp-Div tabs to find the accounts to be posted.Record your postings directly into the General Ledger. As you post an amount to an accountbe sure to enter the General Journal Page # into the Journal Page # column. Seethe first posting to the Cash account for an example. After you post an amount to aGeneral Ledger account, then hand write an "X" in the Posted column of the printedGeneral Journal. This will help you keep track of which entries you have posted._ Enter the "X"s, which you hand wrote on your General Journal pages, into theGeneral Journal. Click the Journal tab and enter the "X"s in the Posted columnStep 2Make an entry in the GeneralJournal for each transaction andpost the entry to the GeneralLedger accounts.Pg. 2_ Determine the required adjusting entries as of July 31, 2013. The information needed forthe adjusting entires is on the page titled "Additional Information". This is the second pagethat printed when you printed the Trans tab. Click the Journal tab and record youradjusting entries in the General Journal. Use the printed Chart of Accounts as areference source for the Account Numbers and Account Names that are available inLenny’s accounting system. Put your adjusting entries on Page # 4 of the General Journal._ Post the adjusting entries from the General Journal to the General Ledger accounts.Click the GL Assets, GL Liab-Equity, and GL Rev-Exp-Div tabs to find the accounts to beposted. As you post an amount to an account be sure to enter the General Journal Page #into the Journal Page # column. After you post an amount to a General Ledger account,click back on the Journal tab and enter an "X" in the Posted column of the General Journal.Step 3 in the Accounting CycleAt the end of the accountingperiod, before preparing thefinancial statements, determineif any of the General Ledgeraccount balances need to beadjusted. Enter any requiredadjusting entries into the GeneralJournal and post the adjustingentries to the General Ledgeraccounts._ Print Lenny’s General Ledger by: clicking the GL Assets tab and then clicking the Printer icon,clicking the GL Liab-Equity tab and then clicking the Printer icon, and clicking theGL Rev-Exp-Div tab and then clicking the Printer icon._ Using the printed General Ledger, enter the ending account balances into the July 31, 2013Pre-Closing Trial Balance. Click the Trial Bal tab and enter the amounts into thePre-Closing Trial Balance. Print the July 31, 2013 Pre-Closing Trial Balance by clickingthe Printer icon.Step 4 in the Accounting CyclePrepare a Pre-Closing TrialBalance to determine that theaccounts in the General Ledgerare in balance.Step 5 in the Accounting Cycle_ Using the printed July 31, 2013 Pre-Closing Trial Balance, prepare the July 2013Income Statement. Click the IS & SEquity tab and enter the amounts into the IncomeStatement.Prepare an Income Statementfrom the ending balances in theGeneral Ledger revenue andexpense accounts.Step 6 in the Accounting Cycle_ Using the printed General Ledger and the Net Income amount, prepare the July 2013Statement of Stockholders’ Equity. Click the IS & SEquity tab and enter theamounts into the Statement of Stockholders’ Equity.Calculate the ending balanceof the Retained Earningsaccount that is needed for thepreparation of the BalanceSheetStep 7 in the Accounting Cycle_ Using the printed July 31, 2013 Pre-Closing Trial Balance and the Retained Earnings amountfrom the Statement of Stockholders’ Equity, prepare the July 31, 2013 Balance Sheet.Click the BalSht tab and enter the amounts into the Balance Sheet._ Prepare the closing entries. Click the Journal tab and enter the closing entries into theGeneral Journal. Place your closing entries on Page # 5 of the General Journal._ Post the closing entries from the General Journal to the General Ledger accounts.Click the GL Liab-Equity, and GL Rev-Exp-Div tabs to find the accounts to be posted.As you post an amount to an account be sure to enter the General Journal Page # intothe Journal Page # column. After you post an amount to a General Ledger account,click back on the Journal tab and enter an "X" in the Posted column of the General Journal.Prepare the Balance Sheetfrom the ending balances in theGeneral Ledger asset accounts,liability accounts, CommonStock account, and thecalculated ending balance forthe Retained Earnings account.Step 8 in the Accounting CyclePrepare and enter the revenue,expense, and dividend closingentries into the GeneralJournal, and post the closingentries to the General Ledgeraccounts.Step 9 in the Accounting Cycle_ Click the Post Close TB tab and prepare the July 31, 2013 Post-Closing Trial Balance.Your project is complete!Your instructor will provide you with directions on how to submit your project.Prepare a Post-Closing TrialBalance to determine that theaccounts in the General Ledgerare in balance and ready tostart a new Accounting Cycle.Lenny’s Lawn Service, Inc. – Transactions – Additional InformationJuly 2013 TransactionsDateüJuly 1Description of the TransactionBorrow $35,000.00 from 1st Bank by signing a 24 month note with a 4% annual interest rate.(As an example of how to journalize and post a transaction — this transaction has already been enteredinto the General Journal and posted to the General Ledger.)July 1Receive $58,000.00 cash from new investors, and issue $58,000.00 of Common Stock to them.July 1Purchase $78,600.00 of new mowing equipment, paying cash to the mower dealer.July 1Pay $500.00 cash for the July truck rental.July 3Invoice a new customer $900.00 for a completed mowing job — customer will pay in 10 days.July 5The Board of Directors declares a cash dividend. The total amount of the dividend is $11,000.00The Date of Record is set as July 15. The Date of Payment is set as July 31.July 7Pay the employees $6,000.00 for work performed during the 1st week of July.July 10 Complete a mowing job for a new customer — customer pays $500.00 cash for the job.July 12 Collect $3,500.00 cash from the golf course for special rush mowing job completed on May 31.July 14 Pay the employees $4,800.00 for work performed during the 2nd week of July.July 15 Purchase $50.00 of supplies from the mower dealer. The supplies are consumed immediately.Lenny’s will pay the mower dealer for the supplies in about 2 weeks.July 15 Collect $900.00 on account. The cash that is received is from the new customer for the jobthat was completed on July 3.July 17 One of the original mowers purchased in January of 2012 broke down and is repaired by the mowerdealer. The cost of the Mower Repair job is $575.00. Lenny’s will pay the mower dealer in 30 days.July 19 Purchase for cash $17,000.00 of supplies. These supplies will be consumed over the next 12 months.July 20 Collect $30,000.00 from the property management company for work performed in June.July 21 Pay the employees $5,750.00 for work performed during the 3rd week of July.July 23 Receive a $48,000.00 advance payment from the university. The advance payment is for 6 monthsof work which will be performed from August 1, 2013 to January 31, 2014.July 25 Complete a special mowing job for the golf course. The total price for the mowing job is $5,400.00.The golf course pays $1,000.00 cash on this date and will pay the remainder on August 25.July 27 Complete a mowing job for a new customer — customer pays $225.00 cash for the job.July 27 Pay $50.00 cash to the mower dealer for the supplies purchased on account on July 15.July 28 Pay the employees $6,300.00 for work performed during the 4th week of July.July 31 Invoice the property management company $33,000.00 for July mowing work. The propertymanagement company will pay the invoice on the 20th of next month.July 31 Pay the cash dividend which was declared on July 5.Additional InformationEquipment:The $48,000.00 beginning balance in the Equipment account relates to the mowing equipmentwhich was purchased on January 2, 2012. For information related to this mowing equipmentsee Page 70 in the Solid Footing book. This equipment continues to be used and should bedepreciated for the month of July.The following information relates to the new equipment which was purchased on July 1, 2013:The new equipment was placed into service on July 1, 2013 and should be depreciatedfor the month of July.The estimated useful life of the new equipment is 5 years.At the end of 5 years, the new equipment will have no future value and will be scrapped.The new equipment will be depreciated using the straight-line method.Supplies:At the end of July there are $15,600.00 supplies on-hand.Mowing Serviceat the University: The monthly mowing service was provided to the university per the contract signed on April 1, 2013.For information on the contract with the university and the related advance payment, seePages 95 and 98 in the Solid Footing book.Wages Duethe Employees:Bank Loan:The last wage payment was made to the employees on July 28, 2013. The employees worked onJuly 29, 30, and 31. For these three days of work the employees earned $3,750.00 of wages.These three days of wages will be paid to the workers during the first week of August.The interest on the loan from 1st Bank will be paid every three months. The first interest paymentto the bank will be made on September 30, 2013. Lenny’s calls the bank on July 31 and thebank indicates that the interest on the loan for July is $115.00Lenny’s Lawn Service, Inc. – Chart of AccountsAccount #100105110150155200205210215220250300305400500505510515520550600Account NameAssets:CashAccounts ReceivableSuppliesEquipmentAccumulated DepreciationLiabilities:Accounts PayableWages PayableInterest PayableUnearned RevenueDividends PayableNote PayableEquity:Common StockRetained EarningsRevenues:Service RevenueExpenses:Supplies ExpenseMower Repair ExpenseWages ExpenseTruck Rental ExpenseDepreciation ExpenseInterest ExpenseDividends:DividendsJohn NowickiLenny’s Lawn Service, Inc. – General JournalPage # 12013Month-DayAccountNumber7-1100250Account NameCashNotes PayablePostedXDebitCredit35,000.0035,000.00XBorrowed on Note Payable7-1100300CashCommon StockX58,000.0058,000.00XReceive cash from new investors7-1150100EquipmentCashX78,600.0078,600.00XPurchase new mowing equipment7-1515100Truck Rental ExpenseCashX500.00500.00XPay truck rental expense7-3105Accounts ReceivableX400Service Revenue900.00X900.00Completed job with future payment7-5600220DividendsDividends PayableX11,000.0011,000.00XDeclare Dividends7-7510100Wages ExpenseCashX6,000.006,000.00XPay wages for 1st week of July7-10CashService RevenueX500.00500.00XCompleted job for new customer7-12100105CashAccounts ReceivableCollect payment from May 31 jobXX3,500.003,500.00Lenny’s Lawn Service, Inc. – General JournalPage # 22013AccountMonth-DayNumber7-14510100Account NamePostedWages ExpenseXCashDebitCredit4,800.004,800.00XPay wages for 2nd week of July7-15500200Supplies ExpenseAccounts PayableX50.0050.00XPurchase supplies on account7-15100105CashAccounts ReceivableX900.00900.00XReceive payment from July 3rd job7-17505200Mower Repair ExpenseAccounts PayableX575.00575.00XRepair mower that broke down7-19110SuppliesX100Cash17,000.00X17,000.00Purchase supplies with cash7-20100105CashAccounts ReceivableX30,000.0030,000.00XCollect Prop. Mag. Company revenue7-21510100Wages ExpenseCashX5,750.005,750.00XPay wages for 3rd week of July7-23100215CashUnearned RevenueX48,000.0048,000.00XReceive 6 months advanced payment7-25100CashX105Accounts ReceivableX400Service RevenueXJob with part cash and future payment1,000.004,400.005,400.00Lenny’s Lawn Service, Inc. – General JournalPage # 32013AccountMonth-DayNumber7-27100400Account NameCashService RevenuePostedXDebitCredit225.00225.00XComplete mowing job for new customer7-27200100Accounts PayableCashX50.0050.00XPay mower dealer for supplies from July7-28510100Wages ExpenseCashX6,300.006,300.00XPay wages for 4th week of July7-31105Accounts ReceivableX400Service Revenue33,000.00X33,000.00Invoice Prop Mang for July services7-31220100Dividends PayableCashPay DividendsXX11,000.0011,000.00Lenny’s Lawn Service, Inc. – General JournalPage # 42013AccountMonth-DayNumber7-31520155Account NameDepreciation ExpenseAccumulated DepreciationPostedXDebitCredit1,000.001,000.00XDepreciation Adj for July Old Equip7-31520155Depreciation ExpenseAccumulate DepreciationX1,310.001,310.00XDepreciation Adj for July New Equip7-31500110Supplies ExpenseSuppliesX5,775.005,775.00XAdjust Supplies for July7-31215Unearned RevenueX400Service Revenue8,000.00X8,000.00Adjust Unearned Revenue for July7-31510205Wages ExpenseWages PayableX3,750.003,750.00XAdjust wages for July 29, 30 & 317-31550210Interest ExpenseInterest PayableAdjust entry for interest due to bankXX115.00115.00Lenny’s Lawn Service, Inc. – General JournalPage # 52013AccountMonth-DayNumber7-31400305Account NameService RevenueRetained EarningsPostedXDebitCredit48,025.0048,025.00XClose service revenue account7-31305Retained EarningsX500Supplies Expense505Mower Repair ExpenseWages ExpenseX515Truck Rental ExpenseX520Depreciation ExpenseX550Interest Expense5,825.00575.0026,600.00500.002,310.00115.00X51035,925.00XXClose expense accounts7-31305600Retained EarningsDividendsClose dividends accountXX11,000.0011,000.00John NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 100Cash2013JournalMonth-DayPage #7-1Beginning Balance7-117-117-117-717-1017-1217-1427-1527-1927-2027-2127-2327-2527-2737-2737-2837-313Account # 10578,600.00500.006,000.00500.003,500.004,800.00900.0017,000.0030,000.005,750.0048,000.001,000.00225.0050.006,300.0011,000.00Balance38,250.0073,250.00131,250.0052,650.0052,150.0046,150.0046,650.0050,150.0045,350.0046,250.0029,250.0059,250.0053,500.00101,500.00102,500.00102,725.00102,675.0096,375.0085,375.00DrDrDrDrDrDrDrDrDrDrDrDrDrDrDrDrDrDrDrAccounts Receivable2013JournalMonth-DayPage #7-1Credit38,250.0035,000.0058,000.0017-1DebitBeginning Balance7-317-1227-2527-313Balance3,500.00900.0030,000.0027-20Credit33,500.0034,400.0030,900.0030,000.000.004,400.0037,400.0033,500.00900.0017-15Debit4,400.0033,000.00DrDrDrDrDrDrDrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 110Supplies2013JournalMonth-DayPage #7-1Beginning Balance7-1927-31Debit4,375.0017,000.004Account # 1502013JournalPage #Beginning Balance7-11Account # 1554,375.00 Dr21,375.00 Dr15,600.00 DrDebitCredit48,000.0078,600.00Balance48,000.00 Dr126,600.00 DrAccumulated Depreciation2013JournalMonth-DayPage #7-15,775.00BalanceEquipmentMonth-Day7-1CreditBeginning Balance7-3147-314DebitCreditBalance18,000.001,000.001,310.0018,000.00 Cr19,000.00 Cr20,310.00 CrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 200Accounts Payable2013JournalMonth-DayPage #7-1Debit0.0050.00575.00Beginning Balance7-1527-1727-273Account # 205JournalMonth-DayPage #0.0050.00625.00575.00CrCrCrCrBalance0.00 Cr3,750.00 CrInterest Payable2013JournalMonth-DayPage #Debit7-31Credit0.00115.00Beginning Balance4Account # 215Credit0.003,750.004Account # 210Balance0.00 Cr115.00 CrUnearned Revenue2013JournalMonth-DayPage #7-1DebitBeginning Balance7-317-150.00BalanceWages Payable20137-1CreditDebit7-2327-3148,000.00Balance8,000.0048,000.00Beginning BalanceCredit8,000.00 Cr56,000.00 Cr48,000.00 CrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 220Dividends Payable2013JournalMonth-DayPage #7-1Debit7-57-313Account # 2502013JournalPage #7-112013JournalPage #7-10.00 Cr35,000.00 CrCreditBalance50,000.0058,000.00150,000.00 Cr108,000.00 CrRetained Earnings2013JournalMonth-DayPage #7-1DebitBeginning BalanceAccount # 305BalanceCommon StockMonth-Day7-1DebitBeginning BalanceAccount # 300Credit11,000.00Note PayableMonth-Day7-10.00 Cr11,000.00 Cr0.00 Cr0.0035,000.001Balance0.0011,000.00Beginning BalanceCreditDebit7-3157-3157-31535,925.0011,000.00Balance48,125.0048,025.00Beginning BalanceCredit48,125.0096,150.0060,225.0049,225.00CrCrCrCrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 400Service Revenue2013JournalMonth-DayPage #7-1Debit7-317-1017-2527-2737-3137-3147-315Account # 5002013JournalPage #48,025.00Debit7-1527-3147-315CrCrCrCrCrCrCrCr5,825.00Balance0.0050.005,825.000.00DrDrDrDrMower Repair Expense2013JournalMonth-DayPage #7-1Credit0.0050.005,775.00Beginning BalanceAccount # 5050.00900.001,400.006,800.007,025.0040,025.0048,025.000.00Supplies ExpenseMonth-Day7-1Balance0.00900.00500.005,400.00225.0033,000.008,000.00Beginning BalanceCreditBeginning Balance7-1727-315DebitCredit0.00575.00575.00Balance0.00 Dr575.00 Dr0.00 DrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 510Wages Expense2013JournalMonth-DayPage #7-1Beginning Balance7-717-1427-2127-2837-3147-31Debit26,600.002013JournalPage #Beginning Balance7-117-31DebitJournalMonth-DayPage #Beginning Balance7-3147-3147-31500.00DebitDrDrDrDrDrDr0.00 Dr500.00 Dr0.00 Dr2,310.00Balance0.001,000.002,310.000.00DrDrDrDrInterest Expense2013JournalMonth-DayPage #7-1Credit0.001,000.001,310.005Account # 550BalanceDrDepreciation Expense20137-1Credit0.00500.005Account # 5200.006,000.0010,800.0016,550.0022,850.0026,600.000.00Truck Rental ExpenseMonth-Day7-1Balance0.006,000.004,800.005,750.006,300.003,750.005Account # 515CreditBeginning Balance7-3147-315DebitCredit0.00115.00115.00Balance0.00 Dr115.00 Dr0.00 DrJohn NowickiLenny’s Lawn Service, Inc. – General LedgerAccount # 600Dividends2013JournalMonth-DayPage #7-1Beginning Balance7-517-315DebitCreditBalance11,000.000.00 Dr11,000.00 Dr0.00 Dr0.0011,000.0094a18John Nowicki06477985Lenny’s – July 31, 2013 Pre-Closing Trial BalanceAccount #Account NameDebitCredit85,375.0037,400.0015,600.00126,600.00100Cash105Accounts Receivable110Supplies150Equipment155Accumulated Depreciation200Accounts Payable205Wages Payable210Interest Payable215Unearned Revenue220Dividends Payable250Note Payable300Common Stock305Retained Earnings400Service Revenue500Supplies Expense505Mower Repair Expense510Wages Expense515Truck Rental Expense520Depreciation Expense550Interest Expense600DividendsDo NOT copy cells from the General Ledger.20,310.00575.003,750.00115.0048,000.000.0035,000.00108,000.0048,125.0048,025.005,825.00575.0026,600.00500.002,310.00115.0011,000.00Totals311,900.00CAUTIONEnter amounts into the Pre-Closing Trial Balanceby typing in the amounts.311,900.00John Nowicki06477985Lenny’s Lawn Service, Inc.Income StatementCAUTIONEnter amounts into the Financial Statements by typing in the amounts.Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance.for the Month Ended July 31, 2013Service Revenue$48,025.00Operating Expenses:SuppliesMower RepairWagesTruck RentalDepreciation(5,825.00)(575.00)(26,600.00)(500.00)(2,310.00)Total Operating ExpensesIncome from OperationsInterest ExpenseNote the new line item on Lenny’s Income StatementIncome from Operations. This is Lenny’s income from thenormal operations of the lawn mowing business.Interest Expense, which is not a cost of operating the businessbut rather a cost of financing the business, is shown belowIncome from Operations. Interest Expense is subtracted fromIncome from Operations to arrive at Net Income.(35,810.00)12,215.00(115.00)Net Income$12,100.00Lenny’s Lawn Service, Inc.Statement of Stockholders’ Equityfor the Month Ended July 31, 2013Beginning Balance July 1, 2013Issue Common StockNet IncomeDividendsEnding Balance July 31, 2013CommonStock$50,000.0058,000.00RetainedEarnings$48,125.0012,100.00(11,000.00)…

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