Accounting 2301<\/p>\n
Purpose: This project is designed to walk a student through all of the steps in the Accounting Cycle for a business. It is both practice and an evaluation of the student\u2019s knowledge and application of accounting. <\/p>\n
Overview: Transactions are provided for a pretend business, \u201cDavis Designs.\u201d Instructions are provided to the student throughout the project. Read instructions carefully and compare what is being asked of you to what you have learned in your chapter material and homework assignments. If you have questions, you may email your teacher at any time <\/p>\n
Resources: In addition to this file, there are PDF files for template journal entries, ledgers, and trial balances. Please be sure to use these templates to complete your assignment.<\/p>\n
PROJECT INFORMATION<\/p>\n
Maya Davis is a landscape designer. She has training in botany and the artistic aspects of designing flower, vegetable, and mixed-use gardens. She has decided to form her own company, Davis Designs. She has hired you as the accountant. <\/p>\n
PART 1: TRANSACTIONS AND LEDGERS<\/p>\n
Record the following transactions as journal entries in the journal. Post the transactions to the ledger accounts. Find the month end balance for each ledger account.<\/p>\n
11\/1\/2020: Maya Davis forms Davis Designs company by contributing $28,000 cash and $12,000 worth of computer and design software equipment in exchange for Common Stock.<\/p>\n
11\/1\/2020: Davis Designs signs a lease with a lessor for some business office space. The company pays $2,700 for the first 3 months rent.<\/p>\n
11\/2\/2020: Davis Designs buys $540 of supplies for drawing \/ sketching \/ printing, etc.<\/p>\n
11\/2\/2020: Davis Designs pays $900 for a 12-month insurance contract covering the company\u2019s legal liability and office asset insurance coverage.<\/p>\n
11\/3\/2020: Davis Designs receives $3,500 from the customer Sketcher Logistics for a design sketch and a plant list that Davis Designs drew up and delivered the same day.<\/p>\n
11\/6\/2020: Davis Designs bills its customer BRX Corporation $1,800 for a sketch performed and submitted that day. The payment terms offered to BRX Corporation are 2\/10, Net\/45. <\/p>\n
11\/10\/2020: Davis Designs borrows $50,000 from their bank, in order to have money to pay for things. The note payable is for 180 days, at 4% interest, and will be paid back with the interest at the maturity date.<\/p>\n
11\/15\/2020: Davis Designs purchases, on account, a large copy\/print machine from Office Worx for $2,600. The payment terms for Davis Designs are 2\/10, Net 30.<\/p>\n
11\/16\/2020: Davis Designs bills its customer Epicenter Construction $1,700 for a design and plant list drawn and delivered that day. The payment terms offered to Epicenter Construction are 2\/10, Net 45.<\/p>\n
11\/19\/2020: Davis Designs pays $1,460 to Make It Market advertising agency for a website design, business cards, and some other advertising items.<\/p>\n
11\/21\/2020: Davis Designs bills its customer, Hanover Engineering, $2,800 for a design drawn and delivered that day. The terms offered to Hanover Engineering are 2\/10, Net 30.<\/p>\n
11\/29\/2020: Davis Designs receives the full payment from BRX Corporation.<\/p>\n
11\/30\/2020: Davis Designs receives and records the bill for the bundled utility services (electric, phone, and internet) for the office; the bill is $380. Davis Designs will pay it next month.<\/p>\n
11\/30\/2020: Davis Designs pays Maya Davis $3,000 in dividend distributions. As of yet, Davis Designs does not have any employees. (You did advise Maya that she needs to be \u201cemployed\u201d as an employee of the company, and start receiving a regular paycheck because the IRS always frowns upon privately-owned companies that do not have regular payroll and payroll taxes\u2026. She said she will think about this.)<\/p>\n
11\/30\/2020: You bill Davis Designs for your services, $450. You are not an employee, but instead a business that bills clients by the hour.<\/p>\n
PART 2: TRANSACTIONS AND LEDGERS \u2013 DECEMBER 2020<\/p>\n
Record the transactions below in the journal; post the entries to the ledgers; find the 12\/31\/2020 ending balances for each account. <\/p>\n
12\/1\/2020: Davis Design receives $2,900 from its customer, Bradley Earl Inc., for work that Davis Designs will perform on December 19th.<\/p>\n
12\/2\/2020: Davis Designs pays the bundled utility bill.<\/p>\n
12\/3\/2020: Davis receives payment from its customer, Epicenter Construction.<\/p>\n
12\/4\/2020: Purchased $630 of office supplies on account, terms 2\/10, net 30.<\/p>\n
12\/10\/2020: Invoiced the customer Belt and Boots LLC $650 for a design drawn and delivered that day, terms 2\/10, net 30.<\/p>\n
12\/11\/2020: Paid for the office supplies purchased on the 4th of December. <\/p>\n
12\/12\/2020: Invoiced the customer Greer Inc. $1,045 for a design drawn and delivered that day, receiving payment immediately.<\/p>\n
12\/14\/2020: Took a prospective client to lunch, $68.<\/p>\n
12\/15\/2020: Davis Designs pays your accounting invoice.<\/p>\n
12\/15\/2020: Received payment from Hanover Engineering.<\/p>\n
12\/21\/2020: Paid for the copier that was bought on 11\/15\/2020.<\/p>\n
12\/30\/2020: Received and recorded the bundled utility bill for December, $416.<\/p>\n
12\/31\/2020: Davis Designs pays Maya Davis a salary of $5,000 for the month of December. The federal income withholding tax withheld from Maya\u2019s paycheck was $860. FICA-OASDI is 12.4%, of which half is withheld from Maya\u2019s pay, and the other half is paid by the Employer. Also, FICA-Medicare is 2.9%, and the same rule applies: half comes from Maya\u2019s paycheck and half paid by Davis Designs. FUTA is .6% (decimal form, .006). Ignore SUTA. The payment to the IRS for the payroll taxes will be made 1\/20\/2021.<\/p>\n
PART 3: UNADJUSTED TRIAL BALANCE, ADJUSTING ENTRIES, ADJUSTED TRIAL BALANCE<\/p>\n
Prepare the Unadjusted Trial Balance. Make the Adjusting Entries and update ledger accounts. Prepare the Adjusted Trial Balance. <\/p>\n
Davis Designs will use the \u201cPercentage of Credit Sales\u201d estimation method for estimating the uncollectible customer accounts. The percentage Davis thinks is appropriate is 2%.<\/p>\n
Depreciation: the company will depreciate assets straight-line for 6 years, with NO residual (ie, salvage or trade-in) value. Remember to take into consideration the timing of when the assets were received and adjust for part-year, and part-month. Round to the nearest whole dollar.<\/p>\n
Took a count of office supplies; the office supplies on hand at 12\/31 were $160.<\/p>\n
Look at the Unadjusted trial balance. What other accounts need to be adjusted?<\/p>\n
PART 4: FINANCIAL STATEMENTS, CLOSING ENTRIES, POST-CLOSING TRIAL BALANCE<\/p>\n
From the Adjusted Trial Balance in Part 3 of this project, prepare the Financial Statements (Multi-step Income Statement, Statement of Retained Earnings, Classified Balance Sheet, Statement of Cash Flows, indirect method). Next, prepare the closing journal entries. Finally, update the Ledgers and prepare the Post-Closing Trial Balance.<\/p>\n
Everything that you need for this final part of the project is in chapter 3, and see also chapter 12 for the Statement of Cash Flows.<\/p>\n","protected":false},"excerpt":{"rendered":"
Accounting 2301 Purpose: This project is designed to walk a student through all of the steps in the Accounting Cycle for a business. It is both practice and an evaluation of the student\u2019s knowledge and application of accounting. Overview: Transactions are provided for a pretend business, \u201cDavis Designs.\u201d Instructions are provided to the student throughout […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[10],"class_list":["post-78760","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-writing"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/78760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=78760"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/78760\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=78760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=78760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=78760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}