PROJECT #1 -THE COMPLETE ACCOUNTING CYCLE

Due Dates:Part A - Sunday at Midnight MST at the end of Week 3.Part B - Sunday at Midnight MST at the end of Week 5.

Project 1 is worth at Total of 75 Points, which is 7.5% of your Grade in the Course.Part A = 30 points and Part B = 45 points

MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.

There are 10 Sheets in the Workbook including this one.All of the Information you need for the Project is located in this Workbook.

Requirements Sheet in Workbook Part A - Due in Week 3 - Requirement 1, 2 and 3Requirement 1 - Prepare the Journal Entries in the General Journal Jounral EntriesRequirement 2 - Post Journal Entries to the General Ledger General LedgerRequirement 3 - Prepare a Trial Balance Trial Balance

Part B - Due in Week 5 - Requirements 4 - 10Requirement 4 - Prepare the Adjusting Entries Adjusting EntriesRequirement 5 - Post Adjusting Entries to the General Ledger General LedgerRequirement 6 - Prepare an Adjusted Trial Balance Adjusted TBRequirement 7 - Prepare the Financial Statements Financial StatementsRequirement 8 - Prepare the Closing Entries Closing EntriesRequirement 9 - Post Closing Entries to the General Ledger General LedgerRequirement 10 - Prepare the Post Closing Trial Balance Post Closing TB

Name: Dennis M. DePugh

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs,completed the following transactions:

Oct. 1 Began business by making a deposit in a company bank account of $12,000, in exchangefor 1,200 shares of $10 par value common stock.

Oct. 1 Paid the premium on a one-year insurance policy, $1,200.

Oct. 1 Paid the current month's rent, $1,040.

Oct. 3 Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance wasplaced on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.Note: Use Accounts Payable for the Balance Due.

Oct. 8 Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12 Paid utility bill for October, $154.

Oct. 16 Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19 Made payment to McKenna Company, $200.

Oct. 31 Cash bicycle repair revenue for the last half of October, $1,310.

Oct. 31 Declared and paid cash dividend of $800.

Prepare journal entries to record the October transactions in the General Journal below.

General JournalDate Description(Account Name) Debit CreditOc1 1 Cash $12,000.00

Common Stock $12,000.00Oc1 1 PrePaid Insurance $1,200.00

Cash $1,200.00Oc1 1 Rent Expense $1,040.00

Cash $1,040.003-Oct Repair Supplies Equipment $4,400.00

Cash $600.00Accounts Payable $3,800.00

8-Oct Repair Supply Expense $390.00Accounts Payable $390.00

12-Oct Utilty Expense $154.00Cash $154.00

16-Oct Cash $1,362.00Revenue $1,362.00

19-Oct Accounts Payable $200.00Cash $200.00

31-Oct Cash $1,310.00Revenue $1,310.00

This Sheet will be used for Requirements 2, 5 and 9

REQUIREMENT #2:

Post the October journal entries to the following T-Accounts and compute ending balances.

Cash (111) Bicycle Repair Revenue (411)Oct 1 12000 Oct 1 $1,200

Oct 1 $1,040Oct 3 $600 31-oct $4206Oct 12 $154

Oct 16 1362Oct 19 $200Oct 31 $800

Oct 31 1310

Prepaid Insurance (117) Store Rent Expense (511)Oct 1 1,200 Oct 1st $1,040

Oct 31 $100

Repair Supplies (119) Utility Expense (512)Oct 3 4,400 Oct 12 $15431Oct $194

10/31 $4,400

Repair Equipment (144) Insurance Expense (513)Oct 1 $1,200Oct 31 $100

Accum. Depr.-Repair Equipment (145) Repair Supplies Expense (514)31 Oct $70 Oct 8 $390

Accounts Payable (212) Depr. Exp.-Repair Equipment (515)Oct 19 200 31 Oct $70

Oct 3 $3,800Oct 8 $390

Income Taxes Payable (213) Income Taxes Expense (516)31 Oct $40 31 Oct $40

Common Stock (311)Oct 1 12,000

Retained Earnings (312)

Dividends (313)31 oct $800

Post the October journal entries to the following T-Accounts and compute ending balances.

Bicycle Repair Revenue (411)Oct 16 $1,362Oct 31 $1,310

Store Rent Expense (511)

Utility Expense (512)

Insurance Expense (513)

Repair Supplies Expense (514)

Depr. Exp.-Repair Equipment (515)

Income Taxes Expense (516)

REQUIREMENT #3:

Prepare a trial balance for October in the space below.

Rawls Repair CorporationTrial Balance

October 31ACCOUNT TITLE DEBIT CREDIT

Cash (Debit) $10,678.00Prepaid Insurance (Debit) $1,200.00Repair Supplies (Debit) $4,400.00Repair Equipment (Debit)Accum Dep -Repair Equipment (Credit)Accounts Payable (Credit) $3,990.00Income Tax Payable (Credit)Common Stock (Credit) $12,000.00Retained Earnings (Credit)Dividends (Debit) $800.00Bicycle Repair Revenue (Credit) $2,672.00Store Rent Expense (Debit) $1,040.00Utility Expense (Debit) $154.00Insurance Expense (Debit)Repair Supplies Expense (Debit) $390.00Dep Expense - Repair Equipment (Debit)Income Tax Expense (Debit)

Total $18,662.00 $18,662.00

Requirement #4:

Prepare adjusting entries using the following information in the General Journalbelow. Show your calculations!

a) One month's insurance has expired.

b) The remaining inventory of repair supplies is $194.

c) The estimated depreciation on repair equipment is $70.

d) The estimated income taxes are $40.

General JournalDate Description(Account Name) Debit Credit

31-Oct Insurance Expense $100.0031-Oct Pre-Paid Insurance $100.0031-Oct Supplies $194.0031-Oct Supplies Expense $194.0031-Oct Dep- Expense Repair Equipment $70.0031-Oct Accumulated Dep- Repair Equipment $70.0031-Oct Income Tax Expense $40.0031-Oct Income Tax Payable $40.00

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.

Rawls Repair CorporationAdjusted Trial Balance

October 31

Cash (Debit) $10,678.00Prepaid Insurance (Debit) $1,100.00Repair Supplies (Debit) $4,400.00Repair Equipment (Debit) $194.00Accum Dep -Repair Equipment (Credit) $70.00Accounts Payable (Credit) $3,990.00Income Tax Payable (Credit) $40.00Common Stock (Credit) $12,000.00Retained Earnings (Credit)Dividends (Debit) $800.00Bicycle Repair Revenue (Credit) $2,672.00Store Rent Expense (Debit) $1,040.00Utility Expense (Debit) $154.00Insurance Expense (Debit) $100.00Repair Supplies Expense (Debit) $196.00Dep Expense - Repair Equipment (Debit) $70.00Income Tax Expense (Debit) $40.00

$18,772.00 $18,772.00

Requirement #7:

Prepare the financial statements for Rawls Repair Corporation as of October 31 in the space below.You will only be preparing the Income Statement, Statement of Retained Earning and the Balance Sheet.The Statement of Cash Flows is a required Financial Statement, but is not required for this Project.

Rawls Repair Corporation Rawls Repair CorporationIncome Statement Statement of Retained Earnings

For the Month Ending October 31 For the Month Ending October 31

Revenues: Retained Earnings, October 1Bicycle Repair Revenue $2,672.00 Add: Net Income $1,072.00

Subtotal $1,072.00Expenses: Less: Dividends $272.00Store Rent Expense $1,040.00 Retained Earnings, October 31 $272.00Utility Expense $154.00Insurance Expense $100.00Repair Supplies Exp. $196.00Depreciation Exp. $70.00Income Taxes Exp. $40.00 Total Expenses $1,600.00

Net Income $1,072.00

Prepare the financial statements for Rawls Repair Corporation as of October 31 in the space below.You will only be preparing the Income Statement, Statement of Retained Earning and the Balance Sheet.The Statement of Cash Flows is a required Financial Statement, but is not required for this Project.

Rawls Repair CorporationBalance Sheet

October 31

Assets:Cash $10,678.00Prepaid Insurance $1,100.00Repair Supplies $4,400.00Repair Equipment $194.00Less: Accum. Depr. $70.00Total Assets $16,302.00

Liabilities:Accounts Payable $3,990.00Income Taxes Payable $40.00Total Liabilities $4,030.00Stockholders' Equity:Common Stock $12,000.00Retained Earnings $272.00Total Stockholders' Equity $12,272.00Total Liabilities & Stockholders' Equity $16,302.00

Requirement #8:

Prepare the closing entries at October 31 in the General Journal below.Hint: use the balances for each account which appear on the AdjustedTrial Balance for your closing entries.

General JournalDate Description (Account Name) Debit Credit

Bicycle Repair Revenue (Credit) $2,672.00Retained Earnings $2,672.00Retained Earnings $1,600.00

Store Rent Expense $1,040.00Utility Expense $154.00

Insurance Expense $100.00Repair Supplies Exp. $196.00

Depreciation Exp. $70.00Income Taxes Exp. $40.00Retained Earnings $800.00

Dividends $800.00

Requirement #9:

Post the closing entries to the General Ledger T-accounts and compute ending balances.Just add to the adjusted balances already listed.

Requirement #10:

Prepare a post-closing trial balance as of October 31 in the space below.

Rawls Repair CorporationPost-Closing Trial Balance

October 31

Cash $10,678.00Prepaid Insurance $1,100.00Repair Supplies $4,400.00Repair Equipment $194.00Accounts Payable $3,990.00Income Taxes Payable $40.00Common Stock $12,000.00Accum Dep -Repair Equipment $70.00Retained Earnings $272.00

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Project 1 Rubric - StudentsCriteria Excellent Good Poor

Parts: 90% to 100% 70% to 89% 50% to 69%Step 1 -Journal Entries (25pts)

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.

Step 2&3 -Posted and Unadjusted Trial Balance. (5pts)

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.

Step 4 -Adjusting Journal Entries (10pts)

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.

Step 5&6 -Posted and Adjusted Trial Balance. (5pts)

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.

Step 7 -Financial Statements (15pts)

All four Financial Statements are prepared accurately and in an appropriate format.

Three of four Financial Statements are prepared accurately and mostly in an appropriate format, one statement has some errors.

Two of four Financial Statements are prepared accurately and mostly in an appropriate format, two statements have some errors.

Step 8 -Closing Journal Entries (10pts)

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.

Step 9&10 -Posted and Post-closingTrial Balance. (5pts)

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.

Very PoorLess than 50%

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.

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.

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.