Accounting Cycle Review Problem

Comprehensive Accounting Cycle Review Problem
Student Name: James Fair

Complete the Comprehensive Problem, beginning on page 2, on the included work papers.
A solution to this problem is not available for your reference, by design. It is time for you to complete a problem on your
own. The following check figures are provided:
Unadjusted Trial Balance
Adjusted Trial Balance
Net Income
Total Assets
Post-Closing Trial Balance
$101,920
$102,175
$13,465
$92,260
$92,440
Comprehensive Accounting Cycle Review Problem

On December 1st Curt Williamson began an auto repair shop, Williamsons Quality Automotive. The following information
about Decembers transactions, accounts, and adjustment data is available.
Transactions
Dec.
1
1
9
10
19
22
26
28
31
31
31
31
1 Williamson contributed $50,000 cash to the business in exchange for capital.

Purchased $10,800 of equipment paying cash.
Paid $4,500 for a 9-month insurance policy starting on December 1.
Paid $18,000 cash to purchase land to be used in operations.
Purchased office supplies on account, $3,000.
Borrowed $28,000 from the bank for business use. Williamson signed a note payable to the bank in the
name of the business.
Paid $800 for advertising expenses.
Paid $1,000 on account.
The business received a bill for utilities to be paid in January, $280.
Revenues earned during the month included $17,500 cash and $2,700 on account.
Paid employees' salaries $3,600 and building rent $700. Record as a compound entry.
The business received $1,440 for auto screening services to be performed next month.
Williamson withdrew cash of $3,000.
Accounts
Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated
Depreciation-Equipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes
Payable; Williamson, Capital; Williamson, Withdrawals; Service Revenue; Salaries Expense; Rent Expense; Utilities
Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation ExpenseEquipment.
Adjustment Data
a. Office Supplies used during the month, $600.
b. Depreciation for the month, $180.
c. One month insurance has expired.
d. Accrued Interest Expense, $75.
Requirements:
Complete the following on the attached work papers
1.
2.
3.
4.
5.
Prepare the journal entries and post to the T-accounts.

Prepare an unadjusted trial balance.
Prepare the adjusting entries and post to the T-accounts.
Prepare an adjusted trial balance.
Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper
formatting techniques including headings, dollar signs, and underlining.
6.
7.
Prepare the closing entries and post to the T-accounts.

Prepare a post-closing trial balance.
GENERAL JOURNAL
DATE
ACCOUNT TITLES AND EXPLANATION
DEBIT
CREDIT
Record Transactions, Adjusting Entries, Closing Entries in this journal

Dec. 1
Dec. 1
Dec. 1
Dec. 9
Cash
Williamson Capital
Owner Contribution
$50,000
Equipment
Cash
Purchased Equipment
10,800
Pre-paid Insurance
Cash
Paid rent in advance
4,500
Land
Cash
Paid cash for land
18,000
$50,000
10,800
4,500
18,000
Dec. 10 Office Supplies

Accounts Payable
Purchased office supplies on account
3,000
Dec. 19
Cash
Notes Payable
Collected cash on note
28,000
Advertising Expense
Cash
Paid cash expense
800
Accounts Payable
Cash
Paid cash on account
1,000
Utilities Expense
Cash
Paid Cash Expense
280
Dec. 22
Dec. 26
Dec. 28
3,000
28,000
800
1,000
280
GENERAL JOURNAL
DATE
Dec. 31
Dec. 31
Dec. 31
Dec. 31
ACCOUNT TITLES AND EXPLANATION
DEBIT
Cash
Accounts Payable
Service Revenue
Performed services collected cash and account credit.
17,500
2,700
Salaries expense
Rent Expense
Cash
Paid cash expenses
3,600
700
Cash
Unearned revenue
Collected cash for future services.
1,440
Williamson, withdrawals
Cash
Owner Withdrawal
3,000
CREDIT
20,200
4,300
1,440
3,000
GENERAL LEDGER
Cash
50,000
10,800
28,000
4,500
17,500
1,440
Accounts Receivable
Office Supplies
Prepaid Insurance
2,700
4,500
3,000
18,000
800
1,000 &
280
4,300 & 3,000
Equipment
10,800
1,000
Accumulated Depreciation Equip.
Accounts Payable
18,000
3,000
Utilities Payable
Land
Interest Payable
Unearned Revenue
Notes Payable-Williamson
1,440
28,000
Capital-Williamson
50,000
Withdrawals
Service Revenue
3,000
20,200
Salaries Expense
3,600
Rent Expense
700
Insurance Expense
Utilities Expense
Advertising Expense
280
Supplies Expense
800
Interest Expense
Depreciation Exp. Equip.
Income Summary

Williamson Quality Automotive
Month End December 31st
Debits
Cash
Office Supplies
Prepaid Insurance
Equipment
Land
Accounts Payable
Rent Expense
Unearned revenue
Credits
$54,260
3,000
4,500
10,800
18,000
2000
800
1,440
28,000
50,000
Capital - Capital-Williamson
Williamson (Withdrawals)
Service Revenue
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Total
3,000
20,200
3,600
800
280
2700
$101,920 $101,920

Debits
Cash
Office Supplies
Prepaid Insurance
Accumulated Depreciation - Insurance
Equipment
Accumulated Depreciation Equipment
Land
Accounts Payable
Unearned revenue
Credits
$54,260
2,400
4,500
500
10,800
180
18,000
2,000
1,440
28,000
50,000
Williamson (Withdrawals)
Service Revenue
Rent Expense
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Depreciation Expense - Insurance
Depreciation Expense Equipment
-Supplies Expense
Interest Expense
Total
3,000
20,200
800
3,600
800
280
2700
500
180
600
75
$102,175 $102,175
Income Statement

Income Statement
Revenues:
Service Revenue
20,200
Expenses:
Salaries expense
Advertising Expense
Utilities expense
Accounts Receivable
Depreciation Expense - Insurance
Depreciation Expense Equipment
Supplies Expense
Interest Expense
Rent Expense
Total Expenses
Net Income
3,600
800
280
2700
500
180
600
75
800
$9,535
$10,665
Statement of Changes in Owners Equity

Owners Equity
Williamson Capital December 1

Owner Contribution
Net Income for the month
0
50,000
10,665
60,665
(3,000)
$57,665
Owner Withdrawal
Williamson Capital December 31
Balance Sheet
Balance Sheet
Assets
Cash
Office Supplies
Prepaid Insurance
Accum. Dep. Insurance
Land
Equipment
Accum. Dep. Equipment
Total Assets
$54,260
2,400
4,500
(500)
18,000
10,800
(180)
$89,280
Liabilities
Accounts Payable
2,000
Unearned
revenue
1,440
28,000
5
0
Total Liabilities
$31,440
Owners Equity
Williamson Capital
Total Liabilities & Owners Equity
$57,665
$89,280

Debits
Cash
Office Supplies
Prepaid Insurance
Accumulated Depreciation - Insurance
Equipment
Accumulated Depreciation Equipment
Land
Accounts Payable
Unearned revenue
Credits
$54,260
2,400
4,500
500
10,800
180
18,000
Total:
$92,440
10
2,000
1,440
28,000
50,000
$92,440

Accounting Cycle Review Problem

Uploaded by

Copyright:

Available Formats

Accounting Cycle Review Problem

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Accounting Cycle Review Problem

Uploaded by

Copyright:

Available Formats

Comprehensive Accounting Cycle Review Problem

Student Name: James Fair

Comprehensive Accounting Cycle Review Problem

1 Williamson contributed $50,000 cash to the business in exchange for capital.

Prepare the journal entries and post to the T-accounts.

Prepare the closing entries and post to the T-accounts.

ACCOUNT TITLES AND EXPLANATION

Record Transactions, Adjusting Entries, Closing Entries in this journal

Dec. 10 Office Supplies

ACCOUNT TITLES AND EXPLANATION

4,300 & 3,000

Accumulated Depreciation Equip.

Depreciation Exp. Equip.

Unadjusted Trial Balance

Adjusted Trial Balance

Williamson Quality Automotive

Statement of Changes in Owners Equity

Williamson Capital December 1

Post-Closing Trial Balance

You might also like