ACCT 102 Chapter Notes - Chapter 3: Deferral, Accrual, Matching Principle
Document Summary
Get access
Related Documents
Related Questions
In proper General Journal format,record the transactions for the month; include descriptions of eachtransaction with your journal entry. Use only the accounts shown inthe chart of accounts.
8/1 YOUfiled a charter with the State of Louisiana to form the YOURAccounting Corporation. The charter authorizes you to issue 5000shares of $2 par common stock. The state charged you a $75 fee tofile the charter. Since your business is not yet approved, you hadto pay this fee using personal funds.
9/1 Youreceived your charter from the State of Louisiana and officiallyopened your business. Your first order of business wasto become a shareholder of YOUR Accounting Corp. To do this, youpurchased 500 shares of common stock by issuing a check to YOURAccounting Corp for $10,000. You used this money to open a checkingaccount at First Funds Bank.
9/1 Yourented an office for YOUR Accounting Corp. The monthly rent is$500, with the first monthâs rent due immediately. You issue check#100 to Office Builders for the first monthâs rent.
9/2 Youthen went to the Apple store and purchased a new computer systemfor your business. Your Mac Pro cost $2700 and your new printercost $450. You set up a 30-day account with Apple to make thispurchase.
9/3 Youordered business cards and stationary from Marketing Media onaccount. The order totaled $250 and will be shipped FOBDestination. (Record all purchases of supplies in the Supplies onHand account).
9/4 Youdecided to purchase a new vehicle for your business. Upon visitingPro-Auto, you decide on a new SUV at a cost of $55,000. Thisvehicle will be used 100% for business purposes. You finance thevehicle with Pig E Bank at a rate of 5% for 6 years. Your firstmonthly payment is due on October 4.
NOTE: You will need to create a loan amortization schedule todetermine the amount of the monthly note and the interest expensefor each month. You can use a website such as www.bankrate.com tocreate the schedule. When recording your journal entries, round allamounts to the nearest dollar.
9/5 Youwent to the KEM Supply to purchase supplies for your business at acost of $600. KEM opened a customer charge account for you. Thepayment terms on your account will be 2/10, net 30. The time periodfor determining the payment amount begins on the purchase date.
9/6 Youpurchased a one-year auto insurance policy from InsureMart for$1200. InsureMart will send you a bill for the policy. YOURAccounting Corporation capitalizes all insurance policies on thedate of purchase and records the necessary expense at year-end asan adjusting entry.
9/10 Your firstclient, Red Fische, came in today needing assistance with filingthe appropriate paperwork to start his new seafood restaurant. Youissued invoice #1 to Red Fische and he paid you an initial $2,000Engagement Fee. Red Fische also agreed to contract with you toprovide accounting services for $2,500 per month.
9/12 You issue check#101 to YOUR Accounting Corp to establish a $500 Petty Cash Fund.You will use this account to make small cash purchases.
9/12 You reimburseyourself for the filing fees associated with forming yourcorporation.
9/14 You paid KEM Supply by issuingcheck #102
9/15 You hire anadministrative assistant, Mandi Handi, she will be paid a monthlysalary of $1500. You have decided that all pay periods will end onthe last day of the month and that checks will be issued on the5th of each month.
NOTE: Assume the following rates when preparing the payroll:federal income tax 15%, state income tax 5%, and FICA 7.65%.
YOUR Accounting Corp. has state and federal unemployment insurancerates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages peremployee. The employer FICA rate is 7.65%.
9/16 Marketing Mediadelivered your business cards and stationary. Check #103 was issuedto pay for the supplies.
9/20 You visited anew client, Anita Cooke, to set up a Quickbooks accounting systemfor her new business, Cooking For You. You gave Anita and invoice#2 for the Engagement Fee and she paid you by issuing a check inthe amount of $2,000. Anita also agreed to a monthly fee of $1,500for you to handle her ongoing accounting needs.
9/22 You purchased$50 of fuel for your new SUV from Get ân Go. You charged this toyour Get ân Go account.
9/30 Mandi sentpro-rated invoices, #3 & #4 , to Red Fische and Cooking For Youfor Monthly Accounting Services. The payment terms are 1/10, net30.
9/30 You accruedinterest on the Pig E. Bank note. Accrue interest based on thenumber of days in the month.
9/30 You computedand accrued the payroll for September.
9/30 You receivedmonthly bills for the following:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
CHART OF ACCOUNTS:
| Cash | 105 | ||
| Petty Cash | 107 | ||
| Accounts Receivable | 110 | ||
| Supplies on Hand | 130 | ||
| Prepaid Insurance | 140 | ||
| Computer Equipment | 220 | ||
| AccoumulatedDepreciation - Computer Equipment | 221 | ||
| Cell Phone | 230 | ||
| AccoumulatedDepreciation - Cell Phone | 231 | ||
| Vehicles | 240 | ||
| AccumulatedDepreciation - Vehicles | 241 | ||
| Accounts Payable | 310 | ||
| Customer Deposits (UnearnedRevenue) | 320 | ||
| SUTA Payable | 330 | ||
| FICA Payable | 332 | ||
| FUTA Payable | 334 | ||
| Federal Income TaxPayable | 336 | ||
| State Income Tax Payable | 338 | ||
| Current Maturities ofLong-Term Debt | 375 | ||
| Notes Payable (long-term) | 410 | ||
| Interest Payable | 420 | ||
| Salaries Payable | 425 | ||
| Common Stock ($2 parvalue) | 520 | ||
| Additional Paid-in Capital onCommon Stock | 521 | ||
| Retained Earnings | 550 | ||
| Dividends | 560 | ||
| Engagement Fees | 605 | ||
| Monthly Accounting ServicesRevenue | 610 | ||
| Hourly Accounting ServicesRevenue | 620 | ||
| Tax Services Revenue | 612 | ||
| Sales Discounts | 614 | ||
| Advertising & PromotionExpense | 725 | ||
| Depreciation Expense | 727 | ||
| Rent Expense | 730 | ||
| Insurance Expense | 735 | ||
| Supplies Expense | 740 | ||
| Meals & Entertainment | 745 | ||
| Taxes & Licenses | 767 | ||
| Telephone Expense | 770 | ||
| Utilities Expense | 775 | ||
| Fuel Expense | 780 | ||
| Interest Expense | 820 | ||
| Payroll Tax Expense | 825 | ||
| Salaries Expense | 830 | ||
| Income Summary | 900 | ||
