Journalizing and Posting Transactions and Adjustments
Mark Jacobs opened Roulstone Roofing Service on September 1. Transactions for September follow.
Apr. 1 Roulstone contributed $11,500 cash to the business in exchange for common stock.
2 Paid $6,100 cash for the purchase of a used truck.
2 Purchased $6,200 of ladders and other equipment; the company paid $1,000 cash, with the
balance due in 30 days.
3 Paid $2,880 cash for a two year (or 24 month) premium toward liability insurance.
5 Purchased $1,200 of supplies on credit.
5 Received an advance of $1,800 cash from a client for roof repairs to be done during September
and May.
12 Billed clients $5,500 for roofing services performed.
18 Collected $4,900 cash from clients toward their accounts billed on September 12.
29 Paid $675 cash for truck fuel used in April.
30 Paid $100 cash for September newspaper advertising.
30 Paid $4,500 cash for assistants’ wages earned.
30 Billed clients $4,000 for roofing services performed.
Required
a. Set up T accounts for the following accounts: cash, accounts receivable, supplies, prepaid insurance,
trucks, accumulated depreciation—trucks, equipment, accumulated depreciation—equipment, ac
counts payable, unearned roofing fees, common stock, roofing fees earned, fuel expense, advertising
expense, wages expense, insurance expense, supplies expense, depreciation expense—trucks, and
depreciation expense—equipment.
b. Record these transactions for September using journal entries.
c. Post the journal entries from part b. to their T accounts (reference transactions in T accounts by date).
d. Prepare journal entries to adjust the following accounts: insurance expense, supplies expense, de
preciation expense—trucks, depreciation expense—equipment, and roofing fees earned. Supplies
still available on September 30 amount to $200. Depreciation for September was $125 on the truck and $35 on
equipment. One fourth of the roofing fee received on September 5 was earned by September 30.
e. Post the adjusting journal entries from part d. to their T account
Journalizing and Posting Transactions and Adjustments
Mark Jacobs opened Roulstone Roofing Service on September 1. Transactions for September follow.
Apr. 1 Roulstone contributed $11,500 cash to the business in exchange for common stock.
2 Paid $6,100 cash for the purchase of a used truck.
2 Purchased $6,200 of ladders and other equipment; the company paid $1,000 cash, with the
balance due in 30 days.
3 Paid $2,880 cash for a two year (or 24 month) premium toward liability insurance.
5 Purchased $1,200 of supplies on credit.
5 Received an advance of $1,800 cash from a client for roof repairs to be done during September
and May.
12 Billed clients $5,500 for roofing services performed.
18 Collected $4,900 cash from clients toward their accounts billed on September 12.
29 Paid $675 cash for truck fuel used in April.
30 Paid $100 cash for September newspaper advertising.
30 Paid $4,500 cash for assistants’ wages earned.
30 Billed clients $4,000 for roofing services performed.
Required
a. Set up T accounts for the following accounts: cash, accounts receivable, supplies, prepaid insurance,
trucks, accumulated depreciation—trucks, equipment, accumulated depreciation—equipment, ac
counts payable, unearned roofing fees, common stock, roofing fees earned, fuel expense, advertising
expense, wages expense, insurance expense, supplies expense, depreciation expense—trucks, and
depreciation expense—equipment.
b. Record these transactions for September using journal entries.
c. Post the journal entries from part b. to their T accounts (reference transactions in T accounts by date).
d. Prepare journal entries to adjust the following accounts: insurance expense, supplies expense, de
preciation expense—trucks, depreciation expense—equipment, and roofing fees earned. Supplies
still available on September 30 amount to $200. Depreciation for September was $125 on the truck and $35 on
equipment. One fourth of the roofing fee received on September 5 was earned by September 30.
e. Post the adjusting journal entries from part d. to their T account
Assignment #1
Part 1 – Accounting Cycle
Mark Jacobs established Jacobs Services in August by contributing $30,000 cash from his personal savings to the business in exchange for 100% of the common stock. Jacobs Services had the following transactions in September.
September 1 Purchased equipment with a price of $15,000 by paying $5,000 cash and signing a note for the remaining balance.
September 2 Paid $2,400 cash for a one year (or 12 month) premium toward insurance.
September 3 Paid September rent of $3,000.
September 5 Purchased $4,000 of supplies on credit.
September 8 Performed serviced and received $1,000 cash.
September 10 Billed clients $8,500 for services performed.
September 12 Received an advance of $3,000 cash from a client for a project to be delivered in November.
September 18 Collected $8,500 cash from clients toward their accounts billed on September 10.
September 24 Paid $4,000 for the supplies purchased on September 5.
September 30 Paid $100 cash for newspaper advertising to be aired in October.
September 30 Paid $5,000 September salaries.
September 30 Billed clients $6,000 for services performed.
September 30 Declared and paid cash dividends of $2,000.
Required
Record the effects of each using the financial
statement effects template.
1. Shareholders contribute $
1. Record the effects of each of above transactions for September using the financial statement effects template (note, some accounts have balances on September 1).
2. Continue in the FSET to record the effects of the following adjustments to the following accounts: insurance expense, supplies expense, depreciation expense and interest expense. Supplies still available on September 30 amount to $2,200. Depreciation on equipment for September was $300. The annual interest on the note is 6% and interest is paid when the note is due.
3. Record the about transactions for September using journal entries.
4. Set up T accounts for the following accounts: cash, accounts receivable, supplies, prepaid insurance, prepaid ad, equipment, accumulated depreciation, accounts payable, unearned revenue, common stock, retained earnings, dividends, service revenue, rent expense, salaries expense, insurance expense, supplies expense, depreciation expense, and interest expense. Enter the balances at the as of August 31, if applicable.
5. Post the journal entries from part 3 to their T accounts (reference transactions in T accounts by date).
6. Prepare adjusting journal entries and post them to the T-accounts, using the information in Part 2
7. Prepare Jacobs Services’ income statement and statement of stockholders’ equity for the month of September.
8. December 31 and its balance sheet as of December 31. There were no stock issuances or repurchases
during the year.
b. Prepare journal entries to close Beneish’s temporary accounts.
c. Set up T accounts for each account and post the closing entrie
Prepare Beneish Corporation’s income statement and statement of stockholders’ equity for year end
December 31 and its balance sheet as of December 31. There were no stock issuances or repurchases
during the year.
b. Prepare journal entries to close Beneish’s temporary accounts.
c. Set up T accounts for each account and post the closing entrie
9. Prepare the income statement and statement of stockholders’ equity for month of September and the balance sheet as of September 30.
10. Prepare journal entries to close the temporary accounts.
11. Post the closing entries to the T-accounts set up in part 4 that have the postings from parts 5 and 7.
(You may use the blank FSET below for parts 1 and 2 of this project)
Balance Sheet
Income Statement
Transaction Cash Asset + Noncash Assets = Liabil-
ities + Contrib. Capital + Earned
Capital Rev-enues – Expenses = Net
Income
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Part 2 – Statement of Cash Flows
Tax Consultants Inc. began operations on January 1, 2019, when it issued 20,000 common shares for $20,000 cash. The company performed tax consulting services throughout its first two years. For 2020, the comparative statements of financial position, income statement, and additional information are presented below (including an analysis of the change in SFP accounts from 2019 to 2020).
Comparative Balance Sheets (Statements of Financial Position)
Assets Dec. 31, 2020 Dec. 31, 2019 Change Increase/Decrease
Cash $ 69,000 $10,000 (a) 49,000 increase
Accounts receivable 46,000 10,000 (b) 36,000 increase
Equipment (net) 40,000 50,000 (c) 10,000 decrease
$155,000 $70,000
Liabilities and Shareholders’ Equity
Accounts payable $ 35,000 $30,000 (d) 5,000 increase
Common shares 80,000 20,000 (e) 60,000 increase
Retained earnings 40,000 20,000 (f) 20,000 increase
$155,000 $70,000
Income Statement
For the Year Ended December 31, 2020
Revenues $125,000
Operating expenses other than depreciation 75,000
Depreciation expense 10,000
Income before income taxes 40,000
Income tax expense 6,000
Net income $ 34,000
Note: Tax Consultants Inc. did not purchase of sell any equipment during 2020.
Required:
1. Prepare a statement of cash flows using the direct approach for Tax Consultants Inc. for 2020.
2. Determine the cash collected from customers and dividends paid during 2020.
3. After completing the statement of cash flows, discuss the key factors that led to the cash increase or decrease by type of activity (operating, investing, and financing)
