Expert answer:Complete Accounting Cycle
Solved by verified expert:It is a term project for my Accounting class. The term project is to do a complete account cycle of the given information in the files. I divided the work in two parts. In the first part it is the journal, ledger, unadjusted trial balance, and adjusted trial balance. In the second part is the journal, income statement, retained earnings statement, balance sheet, and post- closing trial balance.
instructions_part_1.docx
instructions_part_2.docx
spreadsheet_prb4_5a_corpfin.xlsx
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Instructions
Part. 1
For the past several years, Steffy Lopez has operated a part-time consulting business from his home.
As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was
to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into the
following transactions during July:
Jul.
1
The following assets were received from Steffy Lopez in exchange for common stock:
cash, $13,500; accounts receivable, $20,800; supplies, $3,200; and office equipment,
$7,500. There were no liabilities received.
1
Paid two months’ rent on a lease rental contract, $4,800.
2
Paid the annual premiums on property and casualty insurance policies, $4,500.
4
Received cash from clients as an advance payment for services to be provided, and
recorded it as unearned fees, $5,500.
5
Purchased additional office equipment on account from Office Station Co., $6,500.
6
Received cash from clients on account, $15,300.
10
Paid cash for a newspaper advertisement, $400.
12
Paid Office Station Co. for part of the debt incurred on July 5, $5,200.
12
Recorded services provided on account for the period July 1–12, $13,300.
14
Paid receptionist for two weeks’ salary, $1,750.
Record the following transactions on Page 2 of the journal:
Jul.
17
Recorded cash from cash clients for fees earned during the period July 1–17,
$9,450.
18
Paid cash for supplies, $600.
20
Recorded services provided on account for the period July 13–20, $6,650.
24
Recorded cash from cash clients for fees earned for the period July 17–24, $4,000.
26
Received cash from clients on account, $12,000.
27
Paid receptionist for two weeks’ salary, $1,750.
29
Paid telephone bill for July, $325.
31
Paid electricity bill for July, $675.
31
Recorded cash from cash clients for fees earned for the period July 25–31, $5,200.
31
Recorded services provided on account for the remainder of July, $3,000.
31
Paid dividends, $12,500.
Required:
Jul.
17
Recorded cash from cash clients for fees earned during the period July 1–17,
$9,450.
1.
Journalize each transaction in a two-column journal starting on Page 1, referring to the chart
of accounts in selecting the accounts to be debited and credited. (Do not insert the account
numbers in the journal at this time.)
2.
A.
Post the journal to a ledger of four-column accounts.
•
Download the spreadsheet in the Ledger panel and save the Excel file to your
computer. Use the spreadsheet to post the July transactions from the journal to a
ledger of four-column accounts. Be sure to save your work in Excel as it will be
used to complete the following steps in Part 1 of this problem as well as
steps in Part 2 of this problem. Your input into the spreadsheet will not be
included in your grade in CengageNOW on this problem.
B.
3.
Add the appropriate posting reference to the journal in CengageNOW.
Prepare an unadjusted trial balance. If an amount box does not require an entry, leave it
blank.
4.
At the end of July, the following adjustment data were assembled. Analyze and use these data
to complete requirements (5) and (6).
5.
A.
Insurance expired during July is $375.
B.
Supplies on hand on July 31 are $1,525.
C.
Depreciation of office equipment for July is $750.
D.
Accrued receptionist salary on July 31 is $175.
E.
Rent expired during July is $2,400.
F.
Unearned fees on July 31 are $2,750.
(Optional) On your own paper or spreadsheet, enter the unadjusted trial balance on an end-ofperiod work sheet and complete the work sheet. Find a blank end-of-period work sheet in the
Excel spreadsheet you previously downloaded.
6.
A.
Journalize the adjusting entries on page 3 of the journal. Adjusting entries are recorded
on July 31. Refer to the Chart of Accounts for exact wording of account titles.
B.
Post the adjusting entries, inserting balances in the accounts affected.
C.
Add the appropriate posting reference to the adjusting entries in the journal in
CengageNOW.
7.
Prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.
Chart of Accounts
CHART OF ACCOUNTS
ASSETS
11 Cash
12 Accounts Receivable
14 Supplies
15 Prepaid Rent
16 Prepaid Insurance
18 Office Equipment
19 Accumulated Depreciation
LIABILITIES
21 Accounts Payable
22 Salaries Payable
23 Unearned Fees
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34 Income Summary
REVENUE
41 Fees Earned
EXPENSES
51 Salary Expense
52 Rent Expense
53 Supplies Expense
54 Depreciation Expense
55 Insurance Expense
59 Miscellaneous Expense
LEDGER
Download the attached
SPREADSHEET
and save the Excel file to your computer. Use the spreadsheet to post the July transactions from the
journal to a ledger of four-column accounts. Be sure to save your work in Excel as it will be used
to complete the following steps in Part 1 of this problem as well as steps in Part 2 of this
problem.
2. A. Post the journal to a ledger of four-column accounts.
6. B. Post the adjusting entries, inserting balances in the accounts affected.
Instructions Part 2.
For the past several years, Steffy Lopez has operated a part-time consulting business from his home.
As of July 1, 2018, Steffy decided to move to rented quarters and to operate the business, which was
to be known as Diamond Consulting, on a full-time basis. Diamond Consulting entered into
transactions during July. In Part 1 of this problem, the accounting cycle was completed up through the
preparation of the adjusted trial balance.
Required:
8.
A.
If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures
to prepare an income statement for the month ended July 31, 2018. Be sure to complete the
statement heading. If a net loss has been incurred, enter that amount as a negative number
using a minus sign. Refer to the Accounts, Labels and Amount Descriptions provided for the
exact wording of the answer choices for text entries. You will not need to enter colons (:) on
the income statement.
B.
If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures
to prepare a retained earnings statement for the month ended July 31, 2018. Be sure to
complete the statement heading. Negative amount should be indicated by the minus sign.
Refer to the Accounts, Labels and Amount Descriptions provided for the exact wording of the
answer choices for text entries. If an amount is zero, enter “0”.
C.
If you completed the end-of-period work sheet in Part 1, use the adjusted trial balance figures
to prepare a balance sheet as of July 31, 2018. Be sure to complete the statement heading.
Fixed assets must be entered in order according to account number. Refer to the Accounts,
Labels and Amount Descriptions provided for the exact wording of the answer choices for text
entries. You will not need to enter colons (:) on the balance sheet; they will automatically
insert where necessary. Negative amount should be indicated by the minus sign.
9.
A.
Journalize the closing entries on page 4 of the journal. Closing entries are recorded on July 31.
Refer to the Chart of Accounts for exact wording of account titles.
B.
Use the spreadsheet to post the closing entries to the ledger of four-column accounts. Add the
appropriate posting reference to the journal in CengageNOW.
Prepare a post-closing trial balance.
CHART OF ACCOUNTS
ASSETS
11 Cash
12 Accounts Receivable
14 Supplies
15 Prepaid Rent
16 Prepaid Insurance
18 Office Equipment
19 Accumulated Depreciation
LIABILITIES
21 Accounts Payable
22 Salaries Payable
23 Unearned Fees
EQUITY
31 Common Stock
32 Retained Earnings
33 Dividends
34 Income Summary
REVENUE
41 Fees Earned
EXPENSES
51 Salary Expense
52 Rent Expense
53 Supplies Expense
54 Depreciation Expense
55 Insurance Expense
59 Miscellaneous Expense
Labels And Amount Descriptions
Labels
Current assets
Current liabilities
Expenses
For the Month Ended July 31, 2018
July 31, 2018
Property, plant, and equipment
Amount Descriptions
Change in retained earnings
Net income
Net loss
Retained earnings, July 1, 2018
Retained earnings, July 31, 2018
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders’ equity
Total property, plant, and equipment
Total stockholders’ equity
Select the desired account title from the Excel Name Box.
Make your entries in the appropriate cells. No entry is required in the ITEM column.
Remember, this spreadsheet will not be part of your CengageNow grade.
GENERAL LEDGER
Account:
Cash
DATE
Account No. 11
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Account:
Accounts Receivable
DATE
ITEM
Account No. 12
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
4
5
6
Account:
Supplies
DATE
Account No. 14
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
Account:
DATE
Prepaid Rent
Account No. 15
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Prepaid Insurance
Account No. 16
DATE
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Office Equipment
DATE
ITEM
Account No. 18
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Accumulated Depreciation
DATE
ITEM
Account No. 19
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
Account:
Accounts Payable
DATE
ITEM
Account No. 21
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Salaries Payable
DATE
Account No. 22
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
Account:
Unearned Fees
DATE
Account No. 23
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Common Stock
DATE
Account No. 31
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
Account:
Retained Earnings
DATE
ITEM
Account No. 32
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
DATE
Dividends
Account No. 33
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
DATE
Income Summary
ITEM
Account No. 34
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
Account:
Fees Earned
DATE
Account No. 41
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
4
5
6
7
8
Account:
Salary Expense
DATE
Account No. 51
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
4
Account:
Rent Expense
DATE
Account No. 52
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
Supplies Expense
Account No. 53
DATE
ITEM
Account:
Depreciation Expense
DATE
ITEM
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account No. 54
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
DATE
Insurance Expense
ITEM
Account No. 55
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
Account:
DATE
Miscellaneous Expense
ITEM
Account No. 59
POST. REF.
DEBIT
CREDIT
BALANCE
DEBIT
1
2
3
4
umn.
Account No. 11
BALANCE
CREDIT
Account No. 12
BALANCE
CREDIT
Account No. 14
BALANCE
CREDIT
Account No. 15
BALANCE
CREDIT
Account No. 16
BALANCE
CREDIT
Account No. 18
BALANCE
CREDIT
Account No. 19
BALANCE
CREDIT
Account No. 21
BALANCE
CREDIT
Account No. 22
BALANCE
CREDIT
Account No. 23
BALANCE
CREDIT
Account No. 31
BALANCE
CREDIT
Account No. 32
BALANCE
CREDIT
Account No. 33
BALANCE
CREDIT
Account No. 34
BALANCE
CREDIT
Account No. 41
BALANCE
CREDIT
Account No. 51
BALANCE
CREDIT
Account No. 52
BALANCE
CREDIT
Account No. 53
BALANCE
CREDIT
Account No. 54
BALANCE
CREDIT
Account No. 55
BALANCE
CREDIT
Account No. 59
BALANCE
CREDIT
Remember, this spreadsheet will not be part of your CengageNow grade.
Diamond Consulting
End-of-Period Spreadsheet (Work Sheet)
For the Month Ended July 31, 2018
UNADJUSTED
ACCOUNT TITLE
Cash
Accounts Receivable
Supplies
Prepaid Rent
Prepaid Insurance
Office Equipment
Accumulated Depreciation
Accounts Payable
Salaries Payable
Unearned Fees
Common Stock
Retained Earnings
Dividends
Fees Earned
Salary Expense
Rent Expense
Supplies Expense
Depreciation Expense
Insurance Expense
Miscellaneous Expense
Net income
DEBIT
TRIAL BALANCE
CREDIT
ADJUSTMENTS
DEBIT
CREDIT
amond Consulting
d Spreadsheet (Work Sheet)
onth Ended July 31, 2018
ADJUSTED
DEBIT
TRIAL BALANCE
CREDIT
INCOME STATEMENT
DEBIT
CREDIT
BALANCE SHEET
DEBIT
CREDIT
…
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