Financial Accounting

Topics: Generally Accepted Accounting Principles, Accounts receivable, Balance sheet Pages: 8 (1569 words) Published: March 20, 2011
Week 2
I)Frontier Park was started on April 1 by C.J Mendez and associates. The following selected events and transactions occurred during April.

April 1 Stockholders invested $40,000 cash in the business in exchange for common stock. 4 Purchased land costing $30,000 for cash.
8 Incurred advertising expense of $1,800 on account. 11 Paid salaries to employee $1,500.
12 Hired park manager at a salary of $4,000 per month, effective May 1. 13 Paid $1,500 cash for a one –year insurance policy. 17 Declared and paid a $1,000 cash dividend.

20 Received $5,700 in cash for admission fees.
25 Sold 100 coupon books for $25 each.Each book contains 10 coupons that entitle the holder to 1 admission per park.
30 Received $8,900 in cash admission fees.
30 Paid $900 on balance owed for advertisiing incurred on April 8. Mendez uses the following account: Cash;Prepaid Insurance;Land;Accounts payable;Unearned Admissions Revenue; Common Stock;Dividends; Admission Revenue; Advertising Expense; and Salaries Expense.

II) Jane Kent is a Licensed CPA. During the first month of operations of her business, Jane Kent Inc, the following events and transactions occurred. May 1 Stockholders invested $25,000 cash in exchange for comon stock. 2 Hired a secretary-receptionist at a salary of $2,000 per month. 3 Purchased $2,500 of supplies on acount from Read Supply Company. 7 Paid office rent of $900 cash for the month.

11 Completed a tax assignment and billed client $2,100 for services provided. 12 Received $3,500 advance on a management consulting engagement . 17 Received cash of $1,200 for services completed for H. Arnold Co. 31 Paid Secretary-receptionist $2,000 salry for the month. 31 Paid 40% of balance due Read Supply Company.

Jane uses the following chart accounts: No. 101 Cash, Mo. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 205 Unearned Revenue, No.311 Common Stock, No. 400 Service Revenue, no. 726 Salaries Expense, and No. 729, Rent Expense. Instructions

(a)Journalize the transactions.
(b)Post to the lefger accounts
(c)Prepare a trial balance on May 31,2008.

III)Tony Masasi started his own consulting firm, Masasi Company, Inc, on June 1 2008.The trial balance at June 30 is shown on page 129.

Trial Balance
June 30,2008

Account Number DebitCredit

112Accounts Receivable6000
130Prepaid Insurance3000
157Office Equipent15000
201Accounts Payable4500
209Unearned Revenue4000
311Common Stock21750
400Service Revenue7900
726Salaries Expense4000
729Rent Expense1000

In addition to those accounts listed on the trial balance , the chart of accounts for Masasi Company, Inc. also contains the following account numbers: No. 158 Accumulated Depreciation –Office Equipment, No. 212 Salaries Payable, No. 631 Supplies Expense, No. 711 Depreciation Expense, no 722 Insurance Expense, and No. 732 Utilities Expense.

Other Data:

1.Supplies on hand at June 30 are $600
2.A utility I bill for 4150 has not been recorded and will not be paid until next month. 3.The Insurance policy is for a year.
4.$2,500 of unearned service revenue has been earned at the end of the month. 5.Salaries of $2,000 are accrued at June 30.
6.The office equipment has 5-year life with no slavage value. It is being deperciated at $250 per month for 60 moths. 7.Invoicees representing $1,000 of services performed during the month have been recorded as of June 30. Instructions

a)Prepare the adjusting entries for the month of June. Use J3 as the page number for your journal. b) Post the adjusting entries to...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • accounting treatment for capitalizing the accumulated consultancy charges Research Paper
  • Accounting Laws Memo Essay
  • Multiple Choice Questions: Funds Accounting Essay
  • Advanced Accounting Persuasive Audit Letter on Variable Interest Entities Research Paper
  • History of Accounting Essay
  • Essay on Accounting Lecture-1
  • ACC 201 Principles of Financial Accounting Essay
  • Essay on Generally Accepted Accounting Principles

Become a StudyMode Member

Sign Up - It's Free