CASE STUDY 1 -THE COMPLETE ACCOUNTING CYCLE Name: ___________________________________

The Entire Case Study is due Sunday at Midnight Mountain time at the end of Week 3. This Case Study is worth 100 points or 10% of your final course grade. This Case Study relates to TCO's D and E and Chapters 3 and 4. 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 Requirement 1 - Prepare the Journal Entries in the General Journal Requirement 2 - Post Journal Entries to the General Ledger Requirement 3 - Prepare a Trial Balance Requirement 4 - Prepare the Adjusting Entries Requirement 5 - Post Adjusting Entries to the General Ledger Requirement 6 - Prepare an Adjusted Trial Balance Requirement 7 - Prepare the Financial Statements Requirement 8 - Prepare the Closing Entries Requirement 9 - Post Closing Entries to the General Ledger Requirement 10 - Prepare the Post Closing Trial Balance Sheet in Workbook Journal Entries General Ledger Trial Balance Adjusting Entries General Ledger Adjusted TB Financial Statements Closing Entries General Ledger Post Closing TB

Hint for success: review the Week 2 Lecture 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: 1) The debits for the journal entries on the Journal Entries tab 2) The credits for the journal entries on the Journal Entries tab 3) The cash balance on the General Ledger tab 4) The debits for the trial balance on the Trial Balance tab 5) The credits for the trial balance on the Trial Balance tab 6) The debits for the adjusted trial balance on the Adjusted Trial Balance tab 7) The credits for the adjusted trial balance on the Adjusted Trial Balance tab 8) Net Income for the Income Statement on the Financial Statements tab 9) Retained earnings as of March 31 on the Financial Statements tab 10) Total assets for the Balance Sheet on the Financial Statements tab 11) Total liabilities and shareholders' equity for the Balance Sheet on the Financial Statements tab 12) The debits for the post-closing trial balance on the Post-Closing Trial Balance tab 13) The credits for the post-closing trial balance on the Post-Closing Trial Balance tab

s project. he worksheet tabs. of the cell to read the hint.

Prepare journal entries to record the March transactions in the General Journal below. General Journal Description(Account Name) Debit Credit Cash 72,000 Common stock (7,200 @$10) 72,000 Rent expense Cash Prepaid Insurance Cash Prepaid for 1 year Supplies Accts. Payable (Parkview Co.) Salaries Expense Cash (paid to date) Equipment Cash (down payment) Accts. Payable (Hammond Co.) $375/month for 12months Cash Landscapping Revenue 4,500 4,500 3,300 3,300

Use the following account names for journal entries. Chart of Accounts: Account Title (Normal Balance) Assets Cash (Debit) Prepaid Insurance (Debit) Supplies (Debit) Equipment (Debit) Accumulated Depreciation -Equipment (Credit) Liabilities Accounts Payable (Credit) Income Tax Payable (Credit)

Date 1-Mar

1-Mar

1-Mar

7-Mar

900 900 2,200 2,200 9,000 1,500 7,500 Expenses 4,896 4,896 450 450 5,304 5,304 1,000 1,000 103,550 103,550 Rent Expense (Debit) Salaries Expense (Debit) Insurance Expense (Debit) Supplies Expense (Debit) Depreciation Expense (Debit) Income Tax Expense (Debit) Clearing Account Income Summary Stockholders Equity Common Stock (Credit) Retained Earnings (Credit) Dividends (Debit) Revenue Landscaping Revenue (Credit)

10-Mar

14-Mar

15-Mar

19-Mar Accts. Payable (Parkview Co.) Cash 31-Mar Cash Landscapping Revenue Dividends Cash Declared and Paid cash dividends

31-Mar

1-Mar 72,000 15-Mar 4,896 31-Mar 5,304

Cash (111) 1-Mar 1-Mar 10-Mar 14-Mar 19-Mar 31-Mar

4,500 3,300 2,200 1,500 450 1,000

31-Mar

Landscaping Revenue (411) 10,200 15-Mar 4,896 31-Mar 5,304 Bal. 10,200 Bal. -

Bal.

69,250

Prepaid Insurance (117) 1-Mar 3,300 31-Mar 275 Bal. Bal. 3,300 3,025 (31-Mar)

1-Mar Bal. Bal.

Rent Expense (511) 4,500 31-Mar 4,500 4,500 -

7-Mar 900 Bal. Bal. 900 475

Supplies (119) 31-Mar

425

10-Mar Bal. Bal.

Salaries Expense (512) 2,200 31-Mar 2,200 -

2,200

(31-Mar)

Equipment (144) 14-Mar 9,000 Bal. 9,000

31-Mar Bal. Bal.

Insurance Expense (513) 275 31-Mar 275 275 -

Accumulated Depreciation-Equipment (145) 31-Mar 150 Bal. 150

31-Mar Bal. Bal.

Supplies Expense (514) 425 31-Mar 425 425 -

19-Mar

Accounts Payable (212) 450 7-Mar 900 14-Mar 7,500 Bal. 7,950

31-Mar Bal. Bal.

Depreciation Expense (515) 150 31-Mar 150 150 -

Income Tax Payable (213) 31-Mar 795 Bal. 795

31-Mar Bal. Bal.

Income Tax Expense (516) 795 31-Mar 795 795 -

Common Stock (311) 1-Mar 72,000 Bal. 72,000 31-Mar 31-Mar

Income Summary (517) 8,345 31-Mar 1,855

10,200

Bal. 31-Mar Retained Earnings (312) 1,000 31-Mar 1855 Bal. 855

31-Mar 1,000 Bal. 1,000

Dividends (313) 31-Mar

1,000

REQUIREMENT #3: Prepare a trial balance for March in the space below.

Flower Landscaping Corporation Trial Balance March 31

Cash Supplies Prepaid Insurance Equipment Accounts Payable Common Stock Dividends Landscaping revenue Salaries Expense Rent Expense

69,250 900 3,300 9,000 7,950 72,000 1,000 10,200 2,200 4,500

90,150

90,150

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 $475. c) The estimated depreciation on equipment is $150. d) The estimated income taxes are $795. General Journal Description(Account Name) Insurance Expense Prepaid Insurance (3,300/12=275) Supplies Expense Supplies (used during march) Depreciation Expense Accumulated Depreciation-Equip Income Tax Expense Income Tax Payable

Date 31-Mar

Debit 275

Credit 275

31-Mar

425 425 150 150 795 795

31-Mar

31-Mar

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. Flower Landscaping Corporation Adjusted Trial Balance March 31

Cash Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Income Tax Payable Common Stock Dividends Landscaping Revenue Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income tax Expense

69250 475 3025 9000 150 7950 795 72000 1000 10200 4500 2200 275 425 150 795 91095 91095

Requirement #7: Prepare the financial statements for Flower Landscaping Corporation as of March 31 in the space below. You will only be preparing the Income Statement, Statement of Retained Earnings and the Balance Sheet. The Statement of Cash Flows is a required Financial Statement, but is not required for this Project. Flower Landscaping Corporation Income Statement For the Month Ending March 31 Revenues: Landscaping Revenue Expenses: Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income Tax Expense Total Expenses Net Income Flower Landscaping Corporation Statement of Retained Earnings For the Month Ending March 31 Retained Earnings, March 1 Add: Net Income Subtotal Less: Dividends Retained Earnings, March 31 $ 1,855 1,855 1,000 $ 855

$10,200

4,500 2,200 275 425 150 795 8,345 $ 1,855

space below. Balance Sheet.

Flower Landscaping Corporation Balance Sheet March 31 Assets: Cash Prepaid Insurance Supplies Equipment Less: Accum. Depr. Total Assets Liabilities: Accounts Payable Income Tax Payable Total Liabilities Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & Stockholders' Equity

$ 69,250 3,025 475 9,000 150 81,600

7,950 795 8,745 72,000 855 72,855 $ 81,600

Requirement #8: Prepare the closing entries at March 31 in the General Journal below. Hint: use the balances for each account which appear on the Adjusted Trial Balance for your closing entries. General Journal Description (Account Name) Landscaping Revenue Income Summary (To close revenue account) Income Summary Rent Expense Salaries Expense Insurance Expense Supplies Expense Depreciation Expense Income Tax Expense (To close expense account) Income Summary Retained Earnings Retained Earnings Dividends

Date 31-Mar

Debit 10,200

Credit 10200 8,345 4,500 2,200 275 425 150 795 1855 1855 1000 1000

31-Mar

31-Mar 31-Mar

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 March 31 in the space below.

Flower Landscaping Corporation Post-Closing Trial Balance March 31 Cash Prepaid Insurance Supplies Equipment Accumulated Dep.- Equipment Accounts Payable Income Tax Payable Common Stock Retained Earnings 69,250 3,025 475 9,000 150 7,950 795 72,000 855 81,750 81,750

Case Study 1 Rubric Please note that this rubric provides a general guideline but you can score anywhere between 0 and the maximum number of points for that step depending on the accuracy and completeness of your work.
Criteria

Outstanding

Good
Minor errors such as incorrect account names or credits listed prior to debits.

Poor

Very Poor

Journal - Prepared Entries use accurate Journal Entries (20 accounts and amounts; and pts) debits and credits are used correctly.

Step 1

Errors in Evidence of an attempt to complete computations that the journal entries. resulted in incorrect amounts to be debited and credited.

Step 2
-Posted to the General Ledger. (10 pts)

Step 3
-Prepared a Trial Balance (10 pts)

20 pts Posting is correct leading to accurate account balances. 10 pts Correct account names and balances so to arrive at a correct trial balance.

16 pts Posting is mostly correct but minor errors are evident. 8 pts Some minor errors such as incorrect account names or incorrect totals due to errors in prior steps. 8 pts Journal Entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

12 pts 8 pts Posting has Posting is done poorly but does show several errors that evidence of an attempt to complete. resulted in incorrect account balances. 6 pts 4 pts Errors in Evidence of an attempt to complete computations that the trial balance. resulted in incorrect amounts to be debited and credited.

10 pts Journal Entries use -Prepared accurate Adjusting accounts and Journal Entries (10 amounts; and debits and pts) credits are used correctly.

Step 4

6 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

4 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

10 pts Posting is Step 5&6 correct -Posted and Prepared an leading to an Unadjusted accurate trial balance. Trial Balance. (10 pts)

8 Posting is mostly correct leading to a mostly correct trial balance.

6 Posting has several errors leading to a trial balance with several errors.

4 pts Posting is done poorly or not at all, leading to inaccurate or no trial balance.

Prepared an Unadjusted Trial Balance. (10 pts)

Step 7
-Prepared Financial Statements (20 pts)

10 pts All three Financial Statements are prepared accurately and in an appropriate format.

8 pts Two of the three financial Statements are prepared accurately and mostly in an appropriate format, one statement has some errors. 16 pts Journal Entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

6 pts One of the three Financial Statements are prepared accurately and mostly in an appropriate format, two statements have some errors.

4 pts One or fewer of four Financial Statements are prepared accurately and mostly in an appropriate format, three or all statements have some errors.

20 pts Journal Step 8 Entries use -Prepared accurate Closing accounts and Journal Entries (10 amounts; and debits and pts) credits are used correctly. 10 pts Step 9&10 Posting is -Posted and correct leading to an Prepared accurate trial postclosingTrial balance. Balance. (10 pts) 10 pts

12 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

8 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

8 pts Posting is mostly correct leading to a mostly correct trial balance.

6 pts Posting has several errors leading to a trial balance with several errors.

4 pts Posting is done poorly or not at all, leading to inaccurate or no trial balance.

8 pts

6 pts

4 pts

Total Points Earned Out of 100 Points

ywhere between 0 and completeness

Points Awarded