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Instructions:
You will be recording the July 2011 transactions for Lenny's Lawn Service, Inc. After recording the July transactions you will be preparing a Pre-Closing Trial Balance, Income Statement, Statement of Stockholders' Equity, Balance Sheet, and Post-Closing Trial Balance.
Save your project in a file that uses your name a form: LastName file name SmithMary
As you work on your project, be sure to save your Excel file often.
You are given the following:
_ _ _ _ _
July 2011 transactions and Additional Information -- Trans tab Chart of Accounts with Account Numbers and Account Names -- Chart Accts tab General Journal pages -- Journal tab Lenny's General Ledger -- GL Assets, GL Liab-Equity, GL Rev-Exp-Div tabs Forms for the July 31, 2011 Pre-Closing Trial Balance, Income Statement, Statement of Stockholders' Equity, Balance Sheet, and Post-Closing Trial Balance Trial Bal, IS & SEquity, BalSht, and Post Close TB tabs
- Click the - Point to Save As - Click Excel 97 - In File name - Click Save Any time you save your project, if Excel 2007 as this document by converting to an Office Open X
_ 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) _ Record the July transactions in the General Journal. Click the Journal tab and record
your entries directly into the General Journal. Look at the July 1 Notes Payable transaction, 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 Accounts as a reference source for the Account Numbers and Account Names that are available in Lenny's accounting system.
_ _
To make posting from the General Journal to the General Ledger easier, it is recommended that you print the General Journal -- click the Journal tab and then click the Printer Icon. Post the entries from the printed 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 be posted. Record your postings directly into the General Ledger. As you post an amount to an account be sure to enter the General Journal Page # into the Journal Page # column. See the first posting to the Cash account for an example. After you post an amount to a General Ledger account, then hand write an "X" in the Posted column of the printed General 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 the
General Journal. Click the Journal tab and enter the "X"s in the Posted column
Pg. 2
Determine the required adjusting entries as of July 31, 2011. Click on the Trans tab and look at the Additional Information given at the bottom of the screen for information needed to prepare the adjusting entries. Click the Journal tab and record your adjusting entries in the General Journal. Use the printed Chart of Accounts as a reference source for the Account Numbers and Account Names that are available in Lenny'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 be posted. 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. 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 the GL Rev-Exp-Div tab and then clicking the Printer icon. Using the printed General Ledger, enter the ending account balances into the July 31, 2011 Pre-Closing Trial Balance. Click the Trial Bal tab and enter the amounts into the Pre-Closing Trial Balance. Print the July 31, 2011 Pre-Closing Trial Balance by clicking the Printer icon.
Step 3 in the Accounting Cycle At the end of the accounting period, before preparing the financial statements, determine if any of the General Ledger account balances need to be adjusted. Enter any required adjusting entries into the General Journal and post the adjusting entries to the General Ledger accounts.
Balance to determine that the accounts in the General Ledger are in balance.
Using the printed July 31, 2011 Pre-Closing Trial Balance, prepare the July 2011 Income Statement. Click the IS & SEquity tab and enter the amounts into the Income Statement.
Prepare an Income Statement from the ending balances in the General Ledger revenue and expense accounts.
Step 6 in the Accounting Cycle
Using the printed July 31, 2011 Pre-Closing Trial Balance, prepare the July 2011 Statement of Stockholders' Equity. Click the IS & SEquity tab and enter the amounts into the Statement of Stockholders' Equity.
Calculate the ending balance of the Retained Earnings account that is needed for the preparation of the Balance Sheet
Step 7 in the Accounting Cycle
Using the printed July 31, 2011 Pre-Closing Trial Balance and the Retained Earnings amount from the Statement of Stockholders' Equity, prepare the July 31, 2011 Balance Sheet. Click the BalSht tab and enter the amounts into the Balance Sheet.
Prepare the Balance Sheet from the ending balances in the General Ledger asset accounts, liability accounts, Common Stock account, and the calculated ending balance for the Retained Earnings account.
Step 8 in the Accounting Cycle
_ _
Prepare the closing entries. Click the Journal tab and enter the closing entries into the General 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 # 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.
Prepare and enter the revenue, expense, and dividend closing entries into the General Journal, and post the closing entries to the General Ledger accounts.
Click the Post Close TB tab and prepare the July 31, 2011 Post-Closing Trial Balance.
Prepare a Post-Closing Trial Balance to determine that the accounts in the General Ledger are in balance and ready to start a new Accounting Cycle.
Your project is complete! Your instructor will provide you with directions on how to submit your project.
Lenny's Lawn Service, Inc. - Transactions - Additional Information July 2011 Transactions
Date Description of the Transaction Borrow $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 entered into the General Journal and posted to the General Ledger.)
July 1
Receive $58,000.00 cash from new investors, and issue $58,000.00 of Common Stock to them. Purchase $84,000.00 of new mowing equipment, paying cash to the mower dealer. Pay $500.00 cash for the July truck rental. Invoice a new customer $900.00 for a completed mowing job -- customer will pay in 10 days. The Board of Directors declares a cash dividend. The total amount of the dividend is $11,000.00 The Date of Record is set as July 15. The Date of Payment is set as July 31. Pay the employees $6,000.00 for work performed during the 1st week of July.
July 7
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, 2011. 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 job that was completed on July 3. July 17 One of the original mowers purchased in January of 2010 broke down and is repaired by the mower dealer. The cost of the Mower Repair job is $430.00. 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 months of work which will be performed from August 1, 2011 to January 31, 2012. July 25 Complete a special mowing job for the golf course. The total price for the mowing job is $3,900.00. 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 property management company will pay the invoice on the 20th of next month. July 31 Pay the cash dividend which was declared on July 5.
Additional Information
Equipment: The $48,000.00 beginning balance in the Equipment account relates to the mowing equipment which was purchased on January 2, 2010. For information related to this mowing equipment see Page 70 in the Solid Footing book. This equipment continues to be used and should be depreciated for the month of July. The following information relates to the new equipment which was purchased on July 1, 2011: The new equipment was placed into service on July 1, 2011 and should be depreciated for 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 $15,550.00 supplies on-hand.
Mowing Service at the University: The monthly mowing service was provided to the university per the contract signed on April 1, 2011. For information on the contract with the university and the related advance payment, see Pages 95 and 98 in the Solid Footing book. Wages Due the Employees:
The last wage payment was made to the employees on July 28, 2011. The employees worked on July 29, 30, and 31. For these three days of work the employees earned $3,200.00 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 payment to the bank will be made on September 30, 2011. Lenny's calls the bank on July 31 and the bank indicates that the interest on the loan for July is $115.00
Bank Loan:
Lenny's Lawn Service, Inc. - Chart of Accounts Account # 100 105 110 150 155 200 205 210 215 220 250 300 305 400 500 505 510 515 520 550 600 Account Name Assets: Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Liabilities: Accounts Payable Wages Payable Interest Payable Unearned Revenue Dividends Payable Note Payable Equity: Common Stock Retained Earnings Revenues: Service Revenue Expenses: Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Interest Expense Dividends: Dividends
Nicole Petriw
Posted
Debit
Credit
7-1
100 250
X X
35,000.00 35,000.00
7-1
100 300
X X
58,000.00 58,000.00
7-1
150 100
X X
84,000.00 84,000.00
7-1
515 100
Truck Rental Expense Cash Pay Cash for July Truck Rental
X X
500.00 500.00
7-3
105 400
Accounts Receivable Service Revenue Invoice Customer for Complete Mowing Job
X X
900.00 900.00
7-5
600 220
X X
11,000.00 11,000.00
7-7
510 100
X X
6,000.00 6,000.00
7-10
100 400
X X
500.00 500.00
7-12
100 105
X X
3,500.00 3,500.00
Account Name Wages Expense Cash Pay Wages for Second Week of July
Posted
Debit
Credit
7-14
510 100
X X
4,800.00 4,800.00
7-15
500 200
X X
50.00 50.00
7-15
100 105
Cash Accounts Receivable Collect Cash for Job completed on July 3rd
X X
900.00 900.00
7-17
505 200
X X
430.00 430.00
7-19
110 100
X X
17,000.00 17,000.00
7-20
100 105
X X
30,000.00 30,000.00
7-21
510 100
X X
5,750.00 5,750.00
7-23
100 215
X X
48,000.00 48,000.00
7-25
Cash Accounts Receivable Service Revenue Collect Cash and on Account for Job
X X X
Posted
Debit
Credit
7-27
100 400
X X
225.00 225.00
7-27
200 100
X X
50.00 50.00
7-28
510 100
X X
6,300.00 6,300.00
7-31
105 400
X X
33,000.00 33,000.00
7-31
220 100
X X
11,000.00 11,000.00
7-31
520 155
X X
2,400.00 2,400.00
7-31
500 110
X X
5,825.00 5,825.00
7-31
215 400
Unearned Revenue Service Revenue Monthly Payment for Contract from April
X X
8,000.00 8,000.00
7-31
510 205
Wages Expense Wages Payable Wages for Last Three Days of July
X X
3,200.00 3,200.00
Posted
Debit
Credit
7-31
550 210
X X
115.00 115.00
7-31
400 305
X X
46,525.00 46,525.00
7-31
Retained Earnings Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Interest Expense Close Expense Accounts
X X X X X X X
7-31
305 600
X X
11,000.00 11,000.00
Account Name
Posted
Debit
Credit
Nicole Petriw
Cash
Journal Page #
Debit
Credit
Balance
7-1 7-1 7-1 7-1 7-1 7-7 7-10 7-12 7-14 7-15 7-19 7-20 7-21 7-23 7-25 7-27 7-27 7-28 7-31
Beginning Balance 1 1 1 1 1 1 1 2 2 2 2 2 2 2 3 3 3 3
38,250.00 35,000.00 58,000.00 84,000.00 500.00 6,000.00 500.00 3,500.00 4,800.00 900.00 17,000.00 30,000.00 5,750.00 48,000.00 1,000.00 225.00 50.00 6,300.00 11,000.00
38,250.00 73,250.00 131,250.00 47,250.00 46,750.00 40,750.00 41,250.00 44,750.00 39,950.00 40,850.00 23,850.00 53,850.00 48,100.00 96,100.00 97,100.00 97,325.00 97,275.00 90,975.00 79,975.00
Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr Dr
Accounts Receivable
Journal Page #
Debit
Credit
Balance
Beginning Balance 1 1 2 2 2 3
Dr Dr Dr Dr Dr Dr Dr
Nicole Petriw
Supplies
Journal Page #
Debit
Credit
Balance
Beginning Balance 2 3
Equipment
Journal Page #
Debit
Credit
Balance
7-1 7-1
Beginning Balance 1
48,000.00 84,000.00
48,000.00 Dr 132,000.00 Dr
Accumulated Depreciation
Journal Page #
Debit
Credit
Balance
7-1 7-31
Beginning Balance 3
18,000.00 2,400.00
18,000.00 Cr 20,400.00 Cr
Nicole Petriw
Accounts Payable
Journal Page #
Debit
Credit
Balance
Beginning Balance 2 2 3
Cr Cr Cr Cr
Wages Payable
Journal Page #
Debit
Credit
Balance
7-1 7-31
Beginning Balance 3
0.00 3,200.00
0.00 Cr 3,200.00 Cr
Interest Payable
Journal Page #
Debit
Credit
Balance
7-1 7-31
Beginning Balance 4
0.00 115.00
0.00 Cr 115.00 Cr
Unearned Revenue
Journal Page #
Debit
Credit
Balance
Beginning Balance 2 3
Nicole Petriw
Dividends Payable
Journal Page #
Debit
Credit
Balance
Beginning Balance 1 3
Note Payable
Journal Page #
Debit
Credit
Balance
7-1 7-1
Beginning Balance 1
0.00 35,000.00
0.00 Cr 35,000.00 Cr
Common Stock
Journal Page #
Debit
Credit
Balance
7-1 7-1
Beginning Balance 1
50,000.00 58,000.00
50,000.00 Cr 108,000.00 Cr
Retained Earnings
Journal Page #
Debit
Credit
Balance
Beginning Balance 4 4 4
Cr Cr Cr Cr
Nicole Petriw
Service Revenue
Journal Page #
Debit
Credit
Balance
Beginning Balance 1 1 2 3 3 3 4
Cr Cr Cr Cr Cr Cr Cr Cr
Supplies Expense
Journal Page #
Debit
Credit
Balance
Beginning Balance 2 3 4
Dr Dr Dr Dr
Debit
Credit
Balance
Beginning Balance 2 4
Nicole Petriw
Wages Expense
Journal Page #
Debit
Credit
Balance
Beginning Balance 1 2 2 3 3 4
Dr Dr Dr Dr Dr Dr Dr
Debit
Credit
Balance
Beginning Balance 1 4
Depreciation Expense
Journal Page #
Debit
Credit
Balance
Beginning Balance 3 4
Interest Expense
Journal Page #
Debit
Credit
Balance
Beginning Balance 4 4
Nicole Petriw
Dividends
Journal Page #
Debit
Credit
Balance
Beginning Balance 1 4
24a15
Nicole Petriw
86325257
Account # 100 105 110 150 155 200 205 210 215 220 250 300 305 400 500 505 510 515 520 550 600 Cash
Account Name
Debit
Credit
Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Wages Payable Interest Payable Unearned Revenue Dividends Payable Note Payable Common Stock Retained Earnings Service Revenue Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Interest Expense Dividends
79,975.00 35,900.00 15,550.00 132,000.00 20,400.00 430.00 3,200.00 115.00 48,000.00 0.00 35,000.00 108,000.00 48,125.00 46,525.00 5,875.00 430.00 26,050.00 500.00 2,400.00 115.00 11,000.00 309,795.00
Totals
309,795.00
Nicole Petriw
86325257
CAUTION Enter amounts into the Financial Statements by typing in the amounts. Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance.
Note the new line item on Lenny's Income Statement Income from Operations. This is Lenny's income from the normal operations of the lawn mowing business. Interest Expense, which is not a cost of operating the business but rather a cost of financing the business, is shown below Income from Operations. Interest Expense is subtracted from Income from Operations to arrive at Net Income.
Beginning Balance July 1, 2011 Issue Common Stock Net Income Dividends Ending Balance July 31, 2011
$48,280.00 $156,280.00
This is the first time you have prepared a formal Statement of Stockholders' Equity for Lenny's. This statement simply shows what caused the changes in the Stockholders' Equity amounts from last month to this month. Note that the Retained Earnings column on the statement looks the same as the calculation you have been doing each month to determine the Retained Earnings balance needed for the Balance Sheet. Thus, if you prepare a formal Statement of Stockholders' Equity, you have already calculated the Retained Earnings balance needed for the Balance Sheet, and you have completed Step 6 in the Accounting Cycle.
Nicole Petriw
86325257
CAUTION Enter amounts into the Balance Sheet by typing in the amounts. Do NOT copy cells from the General Ledger or Pre-Closing Trial Balance.
Note the following three new sub-totals appearing on Lenny's Balance Sheet:
Total Current Assets is a total of those assets, which will turn-into cash during the next 12 months or be consumed during the next 12 months. The comparison of Total Current Assets to Total Current Liabilities gives some indication of Lenny's liquidity -that is, its ability to pay its bills in the short-term.
Property & Equipment, net is the amount of Fixed Asset cost, which remains to be depreciated in future accounting periods. Total Current Liabilities is a total of those liabilities that will require payment in the next 12 months. In the case of Unearned Revenue, this current liability will be "paid-off" by Lenny's delivering mowing services to the university.
Nicole Petriw
86325257
Account # 100 105 110 150 155 200 205 210 215 220 250 300 305 400 500 505 510 515 520 550 600 Cash
Account Name
Debit
Credit
Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Wages Payable Interest Payable Unearned Revenue Dividends Payable Note Payable Common Stock Retained Earnings Service Revenue Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Interest Expense Dividends
79,975.00 35,900.00 15,550.00 132,000.00 20,400.00 430.00 3,200.00 115.00 48,000.00 0.00 35,000.00 108,000.00 48,280.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 263,425.00
Totals
263,425.00
Student's Name: Project Id Code: Class Time: Instructor: Grading Item Pre-Closing Trial Balance Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Wages Payable Interest Payable Unearned Revenue Dividends Payable Note Payable Common Stock Retained Earnings Service Revenue Supplies Expense Mower Repair Expense Wages Expense Truck Rental Expense Depreciation Expense Interest Expense Dividends
Grading Item Balance Sheet Total Assets Retained Earnings Income Statement Net Income Stockholders' Equity Common Stock 7-31 Bal. Retained Earnings 7-31 Bal. Post-Closing Trial Balance Total Debit Column
Student's Answer