Accounting Question

Accounting assignment

APPLICATION ASSIGNMENT #5- ACCT305 (Accounting Cycle)
Students – For this application assignment, you are going to complete a Worksheet, Income Statement,
Statement of Retained Earnings, and Balance Sheet. You are to use the worksheet to prepare
the adjusting entries, statement information, closing entries, and post-closing trial balance.
Use cell references, formulas, and summation functions where applicable and appropriate.
Specific instructions are outlined below.
Instructions:
1.
2.
KJW has a fiscal year end of June 30. Journalize the following adjusting entries for 6/30/20 in the Journal and then
transfer to the worksheet in the appropriate Adjusting Entries column. (provide descriptions of the entries for a complete
journal entry) Keep everyting in whole dollars.
a) The company estimates uncollectible accounts using the ‘% of receivables’ allowance method.
As of June 30th, the company estimates that 4.5% of the accounts receivable balance
is uncollectible. (HINT: Be sure to account for what is already in the Allowance account)
b) Supplies on hand are determined to be $ 2,750
c) 25% of the Prepaid Insurance balance has expired as of June 30.
d) The Prepaid Rent balance represents 6 months of rent expense. Those months include
May through October 2020. Adjust accordingly for June 30.
e) Depreciation of assets is recognized as follows for the year end:
Buildings – $5,500
Equipment – $8,100
f) Invoices for utilities expenses of $1025 have been received related to June.
g) Employees working the last 4 business days of June will be paid in July. The daily expense
for employee wages is $1,230. (Ignore payroll tax expenses)
h) 35% of the unearned revenue has been earned as of June 30.
i) The interest rate on the Mortgage Payable is 7.5%. Interest expense was last updated 12/31/19.
Update the Adjusted Trial Balance columns in the worksheet. Make sure you carry the correct debit/credit columns
across. Use references and formulas to create the adjusted balances.
3.
Carry over the applicable balances to the Income Statement and Balance Sheet columns. Remember the difference in
debits/credits will be the Net Income – which should be added to the bottom of the worksheet columns for each.
4.
Use the other provided blank worksheets to prepare, in proper format, the Income Statement, Statement of Retained
Earnings, and classified Balance Sheet for the period ending. Formatting and labeling should be appropriate,
consistent, and user-friendly. (USE Spellcheck for each worksheet) Please refer to examples in the book if you
question titles and classifications.
**Note that $8,000
of the Mortgage Payable is due December 1, 2020.
5.
Write up the closing journal entries in the Journal and transfer to the Worksheet. Remember, all temporary accounts
are closed during this process. There are four journal entries involved.
6.
Carry over the balances, after closing entries, to the Post Closing Trial Balance on the worksheet. Only permanent
accounts should have balances.
Complete these requirements and rename the application file as directed. Attach the completed
file to the assignment link by the due date.
CHECK FIGURES:
Total debit/credit amount for adjusting journal entries
Adjusted Trial Balance debit/credit total
Net Income
Total Assets on the Balance Sheet
51,135
1,063,945
143,815
706,770
(For general and closing journal entries)
*Always provide descriptions for your journal entries
General Journal
Ref
Date
Account Titles
Debit
Credit
Account Titles
Cash
Accounts Receivable
Allowance for Doubtful Accounts
Supplies
Prepaid Insurance
Prepaid Rent
Land
Buildings
Accum. Depreciation-Bldgs.
Equipment
Accum. Depreciation-Equip.
Goodwill
Patents
Accounts Payable
Unearned Revenue
Interest Payable
Salaries and Wages Payable
Mortgage Payable
Common Stock ($1 par)
Paid in Capital in Excess of par-CS
Dividends
Retained Earnings
Income Summary
Sales Revenue
Supplies Expense
Salaries and Wages Expense
Maint. and Repairs Expense
Advertising Expense
Depreciation Expense
Bad Debt Expense
Utilities Expense
Rent Expense
Insurance Expense
Interest Expense
Totals
Net Income
Totals
Trial Balance
Db.
Cr.
46,500
64,000
Ref
850
14,200
28,000
18,000
72,000
145,000
35,000
110,500
52,000
287,000
49,500
34,650
8,600
56,000
100,000
25,000
10,000
343,670
384,500
1,620
124,800
18,300
8,200
14,950
25,000
2,700
1,040,270
1,040,270
Adjusting Entries
Db.
KJW Company
Adjusting Entries
Cr.
Ref
Worksheet
For the Year Ended June 30, 2020
Adjusted Trial Balance
Income Statement
Db.
Cr.
Db.
Cr.
Balance Sheet
Db.
Balance Sheet
Cr.
Ref
Closing Entries
Db.
Cr.
Ref
Post-Closing Trial Balance
Db.
Cr.