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CASE STUDY - THE COMPLETE ACCOUNTING CYCLE
Name: This Case Study is worth 100 points, or 10% of your final course grade. This Case Study relates to TCOs E and F, and Chapters 2 and 3. MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. There are 10 sheets in the Workbook, including this one. All of the information that 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 Trial Balance 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 Trial Balance
Hint for success: Review the Week 2 Lesson 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:
- The debits for the journal entries are on the Journal Entries tab.
- The credits for the journal entries are on the Journal Entries tab.
- The cash balance is on the General Ledger tab.
- The debits for the trial balance are on the Trial Balance tab.
- The credits for the trial balance are on the Trial Balance tab.
- The debits for the adjusted trial balance are on the Adjusted Trial Balance tab.
- The credits for the adjusted trial balance are on the Adjusted Trial Balance tab.
- Net income for the income statement is on the Financial Statements tab.
- Retained earnings as of July 31 are on the Financial Statements tab.
- Total assets for the balance sheet are on the Financial Statements tab.
- Total liabilities and shareholders' equity for the balance sheet are on the Financial Statements tab.
- The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab.
- The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab.**
project.
e Worksheet tabs.
f the cell to read the hint.
ements tab.
This Sheet will be used for Requirements 2, 5, and 9.
Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue $ 40,000 $ 6, $ 2,500 $ 8, $ 3,600 $ 14, $ 2, $ 1, $ 6, $ 500 $ 8, $ 450 Ending Balances $ 43,400 $ - Prepaid Insurance (117) Rent Expense (511) $ 3,600 $ 2, $ 300 $ 2, Ending Balances $ 3,300 $ - Supplies (119) Salaries Expense (512) $ 700 $ 2, $ 400 $ 2, Ending Balances $ 300 $ - Equipment (144) Insurance Expense (513) $ 9,500 $ 300 $ 300 Ending Balances $ 9,500 $ - Accumulated Depreciation-Equipment (145) Supplies Expense (514) $ 125 $ 400 $ 400 Ending Balances $ 125 $ -
Accounts Payable (212) Depreciation Expense (515) $ 700 $ 125 $ 8,000 $ 125 $ 500 Ending Balances $ 8,200 $ - Income Tax Payable (213) Income Tax Expense (516) $ 2,700 $ 2, $ 2, Ending Balances $ 2,700 $ - Common Stock (311) Retained Earnings (312) $ 40,000 $ 5, $ 450 Ending Balances $ 40,000 $ 5, Dividends ( $ 450 $ 450 Ending Balances $ -
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 $300. c) The estimated depreciation on equipment is $125. d) The estimated income taxes are $2700. General Journal Date Description (Account Name) Debit Credit 7/31/2018 Insurance Expense $ 300 Prepaid Insurance $ 300 7/31/2018 Supplies Expense $ 400 Supplies $ 400 7/31/2018 Depreciation Expense $ 125 Accumulated Dep - Equipment $ 125 7/31/2018 Income Tax Expense $ 2, Income Tax Payable $ 2, $ 3,525 $ 3, 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. Quick Tax Corporation
- July Adjusted Trial Balance
- Cash $ 43,
- Prepaid Insurance $ 3,
- Supplies $
- Equipment $ 9,
- Accumulated Dep - Equipment $
- Accounts Payable $ 8,
- Income Tax Payable $ 2,
- Common Stock $ 40,
- Dividends $
- Tax Preparation Revenue $ 14,
- Rent Expense $ 2,
- Salaries Expense $ 2,
- Insurance Expense $
- Supplies Expense $
- Depreciation Expense $
- Income Tax Expense $ 2, - $ 65,775 $ 65,
e balance sheet. s case study. ax Corporation Quick Tax Corporation Retained Earnings Balance Sheet th Ending July 31 July 31 Assets: $ 5,925 Cash $ 43, Supplies $ 300 $ 450 Prepaid Insurance $ 3, $ 5,475 Equipment $ 9, Less: Accum. Depr. $ (125) Total Assets $ 56, Liabilities: Accounts Payable $ 8, Income Tax Payable $ 2, Total Liabilities $ 10, Stockholders' Equity: Common Stock $ 40, Retained Earnings $ 5, Total Stockholders' Equity $ 45, Total Liabilities and Stockholders' Equity $ 56,
Requirement #8: Prepare the closing entries at July 31 in the General Journal below. General Journal Date Description (Account Name) Debit Credit 7/31/2018 Tax Preparation Revenue $ 14, Income Summary $ 14, Income Summary $ 8, Rent Expense $ 2, Salaries Expense $ 2, Insurance Expense $ 300 Supplies Expense $ 400 Depreciation Expense $ 125 Income Tax Expense $ 2, Income Summary Income Summary $ 5, Retained Earnings $ 5, $ 29,500 $ 29, Requirement #9: Post the closing entries to the General Ledger T-accounts and compute ending balances. Just add to the adjusted balances already listed.
Case Study 1 Rubric
Please note that this rubric provides a general guideline, but you can score anywhere between
and the maximum number of points for that step, depending on the accuracy and completene
of your work.
Criteria Outstanding^ Good^ Poor
20 points 16 points 12 points 10 points 8 points 6 points 10 points 8 points 6 points 10 points 8 points 6 points 10 points 8 points 6 points
Step 1
Prepared Journal Entries ( points) Journal entries use accurate accounts and amounts; and debits and credits are used correctly. Minor errors such as incorrect account names or credits listed prior to debits. Errors in computations that resulted in incorrect amounts to be debited and credited.
Step 2
Posted to the General Ledger ( points) Posting is correct, leading to accurate account balances. Posting is mostly correct, but minor errors are evident. Posting has several errors that resulted in incorrect account balances.
Step 3
Prepared a Trial Balance (10 points) Correct account names and balances so to arrive at a correct trial balance. Some minor errors such as incorrect account names or incorrect totals due to errors in prior steps. Errors in computations that resulted in incorrect amounts to be debited and credited.
Step 4
Prepared Adjusting Journal Entries ( points) Journal entries use accurate accounts and amounts; and debits and credits are used correctly. Journal entries mostly use accurate accounts and amounts; and debits and credits are used correctly. Journal entries have some errors in use of accounts and amounts; and debits and credits are only used somewhat correctly.
Steps 5 and
Posted and Prepared an Unadjusted Trial Balance (10 points) Posting is correct, leading to an accurate trial balance. Posting is mostly correct, leading to a mostly correct trial balance. Posting has several errors, leading to a trial balance with several errors.
20 points 16 points 12 points 10 points 8 points 6 points 10 points 8 points 6 points
Step 7
Prepared Financial Statements (20 points) All three Financial Statements are prepared accurately and in an appropriate format. Two of the three financial Statements are prepared accurately, and mostly in an appropriate format. One statement has some errors. One of the three Financial Statements is prepared accurately and mostly in an appropriate format. Two statements have some errors.
Step 8
Prepared Closing Journal Entries ( points) Journal entries use accurate accounts and amounts; and debits and credits are used correctly. Journal entries mostly use accurate accounts and amounts; and debits and credits are used correctly. Journal entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.
Steps 9 and
Posted and Prepared Post-Closing Trial Balance (10 points) Posting is correct, leading to an accurate trial balance. Posting is mostly correct, leading to a mostly correct trial balance. Posting has several errors, leading to a trial balance with several errors.
8 points 4 points 4 points 0 One or fewer of four Financial Statements are prepared accurately and mostly in an appropriate format. Three or all statements have some errors. Journal entries have some errors in use of accounts and amounts; and debits and credits are not used correctly. Posting is done poorly or not at all, leading to inaccurate or no trial balance.
Total Points Earned Out of 100
Points
