ng, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder. 2 Received and paid the bill for a one-year premium for insurance, $12,240. (Continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in par july 2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with Check Figure Trial balance total, $601,941; net income
ng, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder. 2 Received and paid the bill for a one-year premium for insurance, $12,240. (Continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in par july 2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with Check Figure Trial balance total, $601,941; net income
ng, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder. 2 Received and paid the bill for a one-year premium for insurance, $12,240. (Continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in par july 2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with Check Figure Trial balance total, $601,941; net income
Check off each transaction as it is recorded. July 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast Off! The business is a recreation area offering three large waterslides (called “tubes”)—one children’s slide, an inner tube run, and a looping extreme slide. 2 Bought Blast Off! in its entirety for a total price of $540,800. The assets include pool furniture, $3,800; the pool/slide facility (includes filter system, pools, pump, and slides), $148,800; building, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder. 2 Received and paid the bill for a one-year premium for insurance, $12,240. (Continued) Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in par july 2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with Check Figure Trial balance total, $601,941; net income, $16,293; post-closing trial balance total, $569,614 the remainder due in 20 days. 3 Signed a contract with a video game company to lease space for video games and to provide a food concession. The rental income agreed upon is 10 percent of the revenues generated from the machines and food, with the estimated monthly rental income paid in advance. Received cash payment for July, $250. 5 Received bills totaling $1,320 for the grand opening/Fourth of July party. The bill from Party Rentals for the promotional handouts, balloons, decorations, and prizes was $620, and the newspaper advertising bills from the City Star were $700. 6 Signed a one-year contract for the pool maintenance with All-Around Maintenance and paid the maintenance fee for July of $1,600. 6 Paid cash for employee picnic food and beverages, $128. (Miscellaneous Expense.) 7 Received $12,086 in cash as income for the use of the facilities. 9 Bought parts to repair the filter system on account from Arlen’s Pool Supply, $646. 14 Received $10,445 in cash as income for the use of the facilities. 15 Paid wages to employees for the period ended July 14, $9,460. 16 Paid $1,150 cash as partial payment on account for promotional expenses recorded on July 5. Party Rentals was paid $620 and City Star was paid the remainder of $530. 16 Judar withdrew cash for personal use, $2,500. 17 Bought additional pool furniture from Pool Suppliers for $2,100; payment due in 30 days. 18 Paid cash to seamstress for alterations and repairs to the character costumes, $328. (Miscellaneous Expense.) 21 Received $10,330 in cash as income for the use of the facilities. 21 Paid cash to Worn Tires as partial payment on account, $600. 23 Received a $225 reduction of our account from Pool Suppliers for lawn chairs received in damaged condition. 25 Received and paid telephone bill, $292. 29 Paid wages for the period July 15 through 28 of $8,227. 31 Received $11,870 in cash as income for the use of the facilities. 31 Paid cash to Arlen’s Pool Supply to apply on account, $360. 31 Received and paid water bill, $684. 31 Paid cash as an installment payment on the mortgage, $3,890. Of this amount, $1,910 represents a reduction in the principal and the remainder is interest. 31 Received and paid electric bill, $942. 31 Sales for the video and food concessions amounted to $4,840, and 10 percent of $4,840 equals $484. Because you have already recorded $250 as concessions income, record the additional $234 revenue due from the concessionaire. (Cash was not received.) Required 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.) 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.) 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. b. c. d. e. Your instructor may want you to use a work sheet for these adjustments. Insurance expired during the month, $1,020. Depreciation of building for the month, $480. Depreciation of pool/slide facility for the month, $675. Depreciation of pool furniture for the month, $220. Wages accrued at July 31, $920. 5. Journalize adjusting entries. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.) 7. Prepare an adjusted trial balance. 8. Prepare the income statement. 9. Prepare the statement of owner’s equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post-closing entries to the ledger accounts. (Skip this step if using CLGL.) 13. Prepare a post-closing trial balance. *If you are using CLGL, use the year 2020 when recording transactions and preparing reports.
Transcribed Image Text:Expense.)
7 Received $12,086 in cash as income for the use of the facilities.
9 Bought parts to repair the filter system on account from Arlen's Pool Supply,
$646.
14 Received $10,445 in cash as income for the use of the facilities.
15 Paid wages to employees for the period ended July 14, $9,460.
16 Paid $1,150 cash as partial payment on account for promotional expenses
recorded on July 5. Party Rentals was paid $620 and City Star was paid the
remainder of $530.
16 Judar withdrew cash for personal use, $2,500.
17 Bought additional pool furniture from Pool Suppliers for $2,100; payment
due in 30 days.
18 Paid cash to seamstress for alterations and repairs to the character costumes,
$328. (Miscellaneous Expense.)
21 Received $10,330 in cash as income for the use of the facilities.
21 Paid cash to Worn Tires as partial payment on account, $600.
23 Received a $225 reduction of our account from Pool Suppliers for lawn chairs
received in damaged condition.
25 Received and paid telephone bill, $292.
29 Paid wages for the period July 15 through 28 of $8,227.
31 Received $11,870 in cash as income for the use of the facilities.
31 Paid cash to Arlen's Pool Supply to apply on account, $360.
31 Received and paid water bill, $684.
31 Paid cash as an installment payment on the mortgage, $3,890. Of this amount,
$1,910 represents a reduction in the principal and the remainder is interest.
31 Received and paid electric bill, $942.
31 Bought additional inner tubes from Worn Tires for $480, paying $100 down,
with the remainder due in 30 days.
31 Judar withdrew cash for personal use, $3,200.
31 Sales for the video and food concessions amounted to $4,840, and 10 percent
of $4,840 equals $484. Because you have already recorded $250 as concessions
income, record the additional $234 revenue due from the concessionaire.
(Cash was not received.)
Check Figure
Trial balance total,
$601,941; net income,
$16,293; post-closing
trial balance total,
$569,614
Required
1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or
Working Papers.)
2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.)
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202
Transcribed Image Text:Assets
Revenue
111 Cash
112 Accounts Receivable
411 Income from Services
412 Concessions Income
114 Prepaid Insurance
Expenses
511 Pool Maintenance Expense
512 Wages Expense
513 Advertising Expense
514 Utilities Expense
515 Interest Expense
517 Insurance Expense
518 Depreciation Expense, Building
519 Depreciation Expense, Pool/Slide
Facility
520 Depreciation Expense, Pool
Furniture
121 Land
122 Building
123 Accumulated Depreciation,
Building
124 Pool/Slide Facility
125 Accumulated Depreciation, Pool/
Slide Facility
126 Pool Furniture
127 Accumulated Depreciation, Pool
Furniture
Liabilities
522 Miscellaneous Expense
221 Accounts Payable
222 Wages Payable
223 Mortgage Payable
Owner's Equity
311 L. Judar, Capital
312 L. Judar, Drawing
313 Income Summary
You are to record transactions in a two-column general journal. Assume that the fiscal
period is one month. You will then be able to complete all of the steps in the accounting
cycle.
When you are analyzing the transactions, think them through by visualizing the
T accounts or by writing them down on scratch paper. For unfamiliar types of
transactions, specific instructions for recording them are included. However, reason
them out for yourself as well. Check off each transaction as it is recorded.
July 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast
Off! The business is a recreation area offering three large waterslides (called
"tubes")-one children's slide, an inner tube run, and a looping extreme slide.
2 Bought Blast Off! in its entirety for a total price of $540,800. The assets
include pool furniture, $3,800; the pool/slide facility (includes filter system,
pools, pump, and slides), $148,800; building, $96,200; and land, $292,000.
Paid $120,000 down and signed a mortgage note for the remainder.
2 Received and paid the bill for a one-year premium for insurance, $12,240.
(Continued)
LE REVIEW
Transcribed Image Text:232
PART 1: The Accounting Cycle for a Service Business: Analyzing Business Transactions
July
2 Bought 125 inner tubes from Worn Tires for $1,225, paying $500 down, with
the remainder due in 20 days.
3 Signed a contract with a video game company to lease space for video games
and to provide a food concession. The rental income agreed upon is 10 percent
of the revenues generated from the machines and food, with the estimated
monthly rental income paid in advance. Received cash payment for July, $250.
5 Received bills totaling $1,320 for the grand opening/Fourth of July party.
The bill from Party Rentals for the promotional handouts, balloons, deco-
rations, and prizes was $620, and the newspaper advertising bills from the
City Star were $700.
6 Signed a one-year contract for the pool maintenance with All-Around
Maintenance and paid the maintenance fee for July of $1,600.
6 Paid cash for employee picnic food and beverages, $128. (Miscellaneous
Expense.)
7 Received $12,086 in cash as income for the use of the facilities.
9 Bought parts to repair the filter system on account from Arlen's Pool Supply,
$646.
14 Received $10,445 in cash as income for the use of the facilities.
15 Paid wages to employees for the period ended July 14, $9,460.
16 Paid $1,150 cash as partial payment on account for promotional expenses
recorded on July 5. Party Rentals was paid $620 and City Star was paid the
remainder of $530.
16 Judar withdrew cash for personal use, $2,500.
17 Bought additional pool furniture from Pool Suppliers for $2,100; payment
due in 30 days.
18 Paid cash to seamstress for alterations and repairs to the character costumes,
$328. (Miscellaneous Expense.)
21 Received $10,330 in cash as income for the use of the facilities.
21 Paid cash to Worn Tires as partial payment on account, $600.
23 Received a $225 reduction of our account from Pool Suppliers for lawn chairs
received in damaged condition.
25 Received and paid telephone bill, $292.
29 Paid wages for the period July 15 through 28 of $8,227.
31 Received $11,870 in cash as income for the use of the facilities.
31 Paid cash to Arlen's Pool Supply to apply on account, $360.
31 Received and paid water bill, $684.
ACCOUNTING CYCLE REVIEW
Transcribed Image Text:CHAPTER 5: CLOSING ENTRIES AND THE POST-CLOSING TRIAL BALANCE
233
3. Prepare a trial balance. (If using a work sheet, use the first two columns.)
4. Data for the adjustments are as follows:
a. Insurance expired during the month, $1,020.
b. Depreciation of building for the month, $480.
c. Depreciation of pool/slide facility for the month, $675.
d. Depreciation of pool furniture for the month, $220.
e. Wages accrued at July 31, $920.
Your instructor may want you to use a work sheet for these adjustments.
5. Journalize adjusting entries.
6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.)
7. Prepare an adjusted trial balance.
8. Prepare the income statement.
9. Prepare the statement of owner's equity.
10. Prepare the balance sheet.
11. Journalize closing entries.
12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.)
13. Prepare a post-closing trial balance.
*If you are using CLGL, use the year 2020 when recording transactions and preparing reports.
ACCOUNTING CYCLE REVIEW
Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.
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