CASE STUDY 1 -THE COMPLETE ACCOUNTING CYCLE

Name : Bahi Beshara

The entire Case Study is due Sunday at midnight mountain time at the end of Week 3.
This Case Study is worth 100 points or 10% of your final course grade.

This Case Study relates to TCOs D and E and Chapters 3 and 4.

MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.

There are 10 sheets in the Workbook including this one.

All of the Information 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 TB
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 TB

Hint for success: Review the Week 2 Lecture 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
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 March 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.
s project.
e worksheet tabs.
of the cell to read the hint.

tements tab.
During its first month of operation, the Flower Landscaping Corporation, which specializes in residential landscaping,
completed the following transactions.

March 1 Began business by making a deposit in a company bank account of $72,000, in exchange
for 7,200 shares of $10 par value common stock.

March 1 Paid the current month's rent, $4,500.

March 1 Paid the premium on a 1-year insurance policy, $3,300.

March 7 Purchased supplies on account from Parkview Company, $900.

March 10 Paid employee salaries, $2,200.

March 14 Purchased equipment from Hammond Company, $9,000. Paid $1,500 down and the balance was
placed on account. Payments will be $375.00 per month for 20 months. The first payment is due 4/1.
Note: Use accounts payable for the balance due.

March 15 Received cash for landscaping revenue for the first half of March, $4,896.

March 19 Made payment on account to Parkview Company, $450.

March 31 Received cash for landscaping revenue for the last half of March, $5,304.

March 31 Declared and paid cash dividend of $1,000.

Prepare journal entries to record the March transactions in the General Journal below.

General Journal
Date Description(Account Name) Debit Credit
1-Mar cash 72,000
common stock 72,000
(Issued stocks for cash)
rent expense 4,500
cash 4,500
(Paid the month rent with cash)
prepaid insurance 3,300
cash 3,300
(Paid a one year insurance in dvance)
7-Mar supplies 900
Accounts payable 900
(purchased supplies on account)
10-Mar salaries expense 2,200
cash 2,200
(Paid employees' salaries)
14-Mar equipment 9,000
This Sheet will be used for Requirements 2, 5, and 9

Requirement #2:

Post the March journal entries to the following T-accounts and compute ending balances.

Cash (111) Landscaping Revenue (411)

beginning 72000 10200 4896 March 15
March 15 4896 5304 March 31
march 31 5304 4500 March 1
3300 March1
2200 March 10
1500 March 14 0
450 March 19
1000 March 31

Prepaid Insurance (117) Rent Expense (511)

March 1 3300 . 275 March 1 4500
4500

3025 0
Supplies (119) Salaries Expense (512)
March 7 900 425 March 10 2200
2200

475 0
Equipment (144) Insurance Expense (513)
March 14 9000 275
275

0
Accumulated Depreciation-Equipment (145) Supplies Expense (514)
150 425
425

Accounts Payable (212) Depreciation Expense (515)

900 March 7 150
7500 March 14 150
March 19 450
 0
Income Tax Payable (213) Income Tax Expense (516)
795 795
795

Common Stock (311) 0

720000 Beginning Income Summary (517)
10200
8345
1855

Retained Earnings (312)

1855

1000

Dividends (313)
March 31 1000
1000
Requirement #3:

Prepare a trial balance for March in the space below.

Flower Landscaping Corporation

Trial Balance
March 31

Cash 69,250
Prepaid insurance 3,300
Supplies 900
Equipments 9,000
accounts payable 7,950
Common Stock 72,000
Landscaping revenue 10,200
Rent expense 4,500
Salaries expense 2,200
Dividends 1,000

90,150 90,150
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 $475.

c) The estimated depreciation on equipment is $150.

d) The estimated income taxes are $795.

General Journal
Date Description(Account Name) Debit Credit
Insurance expense 275
Prepaid insurance 275

supplies expense 425

supplies 425

depreciation expense 150

Accumlated depreciation 150

income tax expense 795

income tax payable 795

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.

Flower Landscaping Corporation

Adjusted Trial Balance
March 31

cash 69250
prepaid insurance 3025
supplies 475
equipment 9000
Accumlated depreciation on equipment 150
accounts payable 7950
Income tax payable 795
common stock 72000
landscaping revenue 10200
rent expense 4500
salary expense 2200
Income tax expense 795
insurance expense 275
supplies expense 425
depreciation expense 150
dividends 1000

91095 91095
Requirement #7:

Prepare the financial statements for the Flower Landscaping Corporation as of March 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 project.

Flower Landscaping Corporation Flower Landscaping Corporation

Income Statement Statement of Retained Earnings
For the Month Ending March 31 For the Month Ending March 31

Revenues: Retained Earnings, March 1 $ -

Landscaping Revenue $ 10,200 Add: Net Income 1,855
Subtotal
Expenses: Less: Dividends 1,000
Rent Expense 4,500 Retained Earnings, March 31 $ 855
Salaries Expense 2,200
Insurance Expense 275
Supplies Expense 425
Depreciation Expense 150
Income Tax Expense 795
Total Expenses 8,345

Net Income $ 1,855

the space below.
lance sheet.

Flower Landscaping Corporation

Balance Sheet
March 31

Assets:
Cash $ 69,250
Prepaid Insurance 3,025
Supplies 475
Equipment 9,000
Less: Accum. Depr. 150
Total Assets 81,600

Liabilities:
Accounts Payable 7,950
Income Tax Payable 795
Total Liabilities 8,745
Stockholders' Equity:
Common Stock 72,000
Retained Earnings 855
Total Stockholders' Equity 72,855
Total Liabilities and
Stockholders' Equity $ 81,600
Requirement #8:

Prepare the closing entries at March 31 in the General Journal below.

Hint: Use the balances for each account which appear on the Adjusted
Trial Balance for your closing entries.

General Journal
Date Description (Account Name) Debit Credit
2014 service revenue 10200
31-Mar income summary 10200
(to close revenue account)
income summary 8345
rent expense 4500
salary expense 2200
income tax expense 795
Insurance expense 275
supplies expense 425
depreciation expense 150
(to close expense account)
income summary 1855
retained earnings 1855
(to close income to retained earnings)
retained earnings 1000
dividends 1000
to close dividends to retained earnings
Requirement #9: 19545 19545

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 March 31 in the space below.

Flower Landscaping Corporation

Post-Closing Trial Balance
March 31

cash 69,250
prepaid insurance 3,025
supplies 475
equipent 9,000
accumlated depreciation 150
accounts payable 7,950
income tax payable 795
common stock 72,000
retained earnings 855

81,750 81,750
Case Study 1 Rubric
Please note that this rubric provides a general guideline but you can score anywhere between 0
and the maximum number of points for that step depending on the accuracy and completeness
of your work.
Criteria Outstanding Good Poor Very Poor

Step 1 Journal Minor errors Errors in Evidence of an attempt to complete

entries use such as computations that the journal entries.
Prepared accurate incorrect resulted in
Journal accounts and account incorrect amounts
Entries (20 amounts; and names or to be debited and
points) debits and credits listed credited.
credits are prior to debits.
used
correctly.

20 points 16 points 12 points 8 points

Step 2 Posting is Posting is Posting has Posting is done poorly but does show
correct mostly correct several errors that evidence of an attempt to complete.
Posted to leading to but minor resulted in
the General accurate errors are incorrect account
Ledger (10 account evident. balances.
pts) balances.

10 points 8 points 6 points 4 points

Step 3 Correct Some minor Errors in Evidence of an attempt to complete
account errors such as computations that the trial balance.
Prepared a names and incorrect resulted in
Trial balances so account incorrect amounts
Balance (10 to arrive at a names or to be debited and
points) correct trial incorrect totals credited.
balance. due to errors in
prior steps.

10 points 8 points 6 points 4 points

Step 4 Journal Journal entries Journal entries Journal entries have some errors in
entries use mostly use have some errors use of accounts and amounts; and
Prepared accurate accurate in use of accounts debits and credits are not used
Adjusting accounts and accounts and and amounts; and correctly.
Journal amounts; and amounts; and debits and credits
Entries (10 debits and debits and are only somewhat
points) credits are credits are used correctly.
used used correctly.
correctly.

10 points 8 points 6 points 4 points

Steps 5 and Posting is Posting is Posting has Posting is done poorly or not at all,
6 correct mostly correct several errors leading to inaccurate or no trial
Posted leading to an leading to a leading to a trial balance.
and accurate trial mostly correct balance with
Prepared an balance. trial balance. several errors.
Unadjusted
Trial
Balance (10
points) 10 points 8 points 6 points 4 points
Step 7 All three Two of the One of the three One or fewer of four Financial
Financial three financial Financial Statements are prepared accurately
Prepared Statements Statements Statements are and mostly in an appropriate format,
Financial are prepared are prepared prepared three or all statements have some
Statements accurately accurately and accurately and errors.
(20 points) and in an mostly in an mostly in an
appropriate appropriate appropriate format,
format. format, one two statements
statement has have some errors.
some errors.

20 points 16 points 12 points 8 points

Step 8 Journal Journal entries Journal entries Journal entries have some errors in
entries use mostly use have some errors use of accounts and amounts; and
Prepared accurate accurate in use of accounts debits and credits are not used
Closing accounts and accounts and and amounts; and correctly.
Journal amounts; and amounts; and debits and credits
Entries (10 debits and debits and are only somewhat
points) credits are credits are used correctly.
used used correctly.
correctly.

10 points 8 points 6 points 4 points

Steps 9 and Posting is Posting is Posting has Posting is done poorly or not at all,
10 correct mostly correct several errors leading to inaccurate or no trial
Posted leading to an leading to a leading to a trial balance.
and accurate trial mostly correct balance with
Prepared balance. trial balance. several errors.
Post-Closing
Trial
Balance (10
points)
10 points 8 points 6 points 4 points
Total Points Earned Out of 100
Points
ywhere between 0
and completeness

Points
Awarded
0