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ACCOUNTING CYCLE BY THAWBAN BAIG
| Date post: | 19-Jun-2015 |
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ACCOUNTING CYCLE
BY THAWBAN BAIG
TABLE OF CONTENTS
• QUESTION # 2• SOLUTION
• JOURNAL GENERAL• LEDGER T-ACCOUNTS• ADJUSTMENTS• ADJUSTED TRIAL BALANCE• INCOME STATEMENT• STATEMENT OF RETAINED EARNINGS
TABLE OF CONTENTS
• CLOSING ENTRIES• AFTER CLOSING TRIAL BALANCE
JOURNAL GENERAL
DEC 1 CASH 200,000 CAPITAL STOCK 200,000
ISSUED 2000 SHARES OF CAPITAL STOCK
DEC 1 EQUIPMENT 240,000 NOTES PAYABLE 100,000
CASH 140,000
PURCHASED EQUIPMENT AND
ISSUED NOTES PAYABLE
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 1 PREPAID RENT 12000 CASH 12000
PAID ADVANCE RENT
DEC 4 OFFICE SUPPLIES 1000 AC.PAYABLE 1000 PURCHASED OFFICE
SUPPLIES ON ACCOUNT
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 8 CASH 8000 UNEARNED RENTAL FEE 8000
RECEIVED UNEARNED FEE
DEC 12 SALARIES EXPENSE 5200 CASH 5200
PAID SALARIES EXPENSE
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 15 CASH 12000ACCOUNTS RECEIVABLE 6000
EARNED RENTAL FEE 18000 EARNED FEE RECEIVED
DEC 17 MAINTENANCE EXPENSE 600 ACCOUNTS PAYABLE 600
PAID MAINTENANCE EXPENSE
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 23 CASH 2000 ACCOUNTS RECEIVABLE 2000
COLLECTED ACCOUNTS RECV.
DEC 23 ACCOUNTS RECEIVABLE 5250 UNEARNED RENTAL FEE 5250
RENTED A BACKHOE
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 26 SALARIES EXPENSE 5200CASH 5200
PAID BIWEEKLY SALARIES
DEC 27 ACCOUNTS PAYABLE 600 CASH 600PAID ACCOUNTS PAYABLE
DATE PARTICULARS Dr Cr
JOURNAL GENERAL
DEC 28 DIVIDENTS 2000DIVI.PAYABLE
2000 10 CEN PER SHARE DIVIDENT DEC 29 UNEXPIRED INSURANCE 9600
CASH 9600 PURCHASED INSUR. POLICY
DATE PARTICULARSDr Cr
JOURNAL GENERAL
DEC 31 UTILITIES EXPENSE 700 A.PAYABLE 700 RECEIVED UTILITIES BILL
DEC 31 CASH 15600 ACCOUNTS RECEIVABLE 4400
EARNED RENTAL FEE 20000 EARNED EQ. RENTAL FEE
DATE PARTICULARS Dr Cr
LEDGER T-ACCOUNTS
Dr Cr
200,000 140,000
8,000 12,000
12,000 5,200
2,000 5,200
15,600 600
9,600
172,600
65,000
237600
237600 237,600
Dr Cr
200,000
200,000
200,000 200,000
Cash capital stock
LEDGER T-ACCOUNTS
Dr Cr
240,000
240,000
240,000 240,000
Dr Cr
12,000
12,000
12,000 12,000
Rental equipment prepaid rent
LEDGER T-ACCOUNTS
Dr Cr
100,000
100,000
100,000 100,000
Dr Cr
1,000
1,000
1,000 1,000
Notes payable office supplies
LEDGER T-ACCOUNTS
Dr Cr
2,000
2,000
2,000 2,000
Dr Cr
2,000
2,000
2,000 2,000
Dividends Dividend payable
LEDGER T-ACCOUNTS
Dr Cr
8,000
5,250
13,250
13,250 13,250
Dr Cr
600 1,000
600
700
17,00
2,300 2,300
unearned rental fee accounts payable
LEDGER T-ACCOUNTS
Dr Cr
5,200
5,200
10,400
10,400 10,400
Dr Cr
600
600
600 600
Salaries expense maintenance expense
LEDGER T-ACCOUNTSDr Cr
700
700
700 700
Dr Cr
6,000 2,000
5,250
4,400
13,650
15,650 15,650
Utilities expense accounts recievable
LEDGER T-ACCOUNTSDr Cr
18,000
20,000
38,000
38,000 38,000
Dr Cr
9,600
9,600
9,600 9,600
earned rental fee unexpired insurance
ADJUSTMENTSDATE PARTICULARS Dr Cr
A RENT EXPENSE 4000
PREPAID RENT 4000
ADVANCE PAYMENT OF RENT
ADJUSTMENTSDATE PARTICULARS Dr Cr
B INTEREST EXPENSE 6000
INTEREST PAYABLE 6000
THE ANNUAL INTEREST RATE ON NOTES PAYABLE
ADJUSTMENTSDATE PARTICULARS Dr Cr
C DEP. EXPENSE :RENTAL EQUIPMENT 2500
ACCUMULATED DEP:RENT EQUIP 2500
THE RENTAL EQUIPMENT BEING DEPRICIATED OVER PERIOD OF 8 YEARS
ADJUSTMENTSDATE PARTICULARS Dr Cr
D SUPPLIES EXPENSE 400
OFFICE SUPPLIES 400
OFFICE SUPPLIES ON HAND AT 31 DEC
ADJUSTMENTSDate Particulars DR CR
E UNEARNED RENTAL FEE 3700
EARNED RENTAL FEE 3700
THE COMPANY EARNED 3700 RENTAL FEE PAID IN ADVANCE
ADJUSTMENTSDATE PARTICULARS Dr Cr
F UNEARNED RENTAL FEE 1500
EARNED RENTAL FEE 1500
6 DAYS RENT ON BACKHOE HAS BEEN EARNED
ADJUSTMENTSDATE PARTICULARS Dr Cr
G SALARIES EXPENSE 1400
SALARIES PAYABLE 1400
SALARIES EARNED BY EMPLOYEES
ADJUSTMENTSDATE PARTICULARS Dr Cr
H INCOME TAX EXPENSE 10520
INCOME TAX PAYABLE 10520
COMBINED STATE AND FEDERAL INCOME TAX
Dr Cr
1,000 400
600
1000 1000
OFFICE SUPPLIES
Dr Cr
12,000 4000
8000
12,000 12000
PREPAID OFFICE RENT
T-ACCOUNTS AFTER ADJUSTMENTS
Dr Cr
2,500
2,500
2,500 2,500
Dr Cr
6,000
6,000
6,000 6,000
T-ACCOUNTS AFTER ADJUSTMENTSACCUMULATED DEP: OFFICE EQUIP INTEREST PAYABLE
Dr Cr
10,520
10,520
10,520 10,520
Dr Cr
1,400
1,400
1,400 1,400
T-ACCOUNTS AFTER ADJUSTMENTSINCOME TAX PAYABLE SALARIES PAYABLE
Dr Cr
8,000
5200 5,250
8050
13250 13250
Dr Cr
2,000
2,000
2,000 2,000
UNEARNED RENTAL FEE DIVIDENDST-ACCOUNTS AFTER ADJUSTMENTS
Dr Cr
18,000
20,000
5200
43200
43200 43200
T-ACCOUNTS AFTER ADJUSTMENTS
Dr Cr
5,200
5,200
1400
11800
11800 11800
Earned rental fee Salaries expense
Dr Cr
6,000
6,000
6,000 6,000
Dr Cr
10520
10520
10520 10520
T-ACCOUNTS AFTER ADJUSTMENTSInterest expense Income tax expense
Dr Cr
4000
4000
4000 4000
Dr Cr
400
400
400 400
T-ACCOUNTS AFTER ADJUSTMENTSRENT EXPENSE SUPPLIES EXPENSE
Dr Cr
2500
2500
2500 2500
T-ACCOUNTS AFTER ADJUSTMENTSDEP.EXP:RENTAL EQUIPMENT
INCOME STATEMENTREVENUE: RENTAL FEE REVENUE………………………………………………………………………………43200EXPENSES: MAINTENANCE EXPENSE 600 UTILITIES EXPENSE 700 SALARIES EXPENSE 11,800 INTEREST EXPENSE 6,000 RENT EXPENSE 4,000 SUPPLIES EXPENSE 400 DEP EXPENSE: RENTAL EQUIPMENT 2500 INCOME TAXES EXPENSE 10520
NET INCOME 6680
STATEMENT RETAINED EARNINGREVENUE: RENTAL FEE REVENUE………………………………………………………………………………43200EXPENSES: MAINTENANCE EXPENSE 600 UTILITIES EXPENSE 700 SALARIES EXPENSE 11,800 INTEREST EXPENSE 6,000 RENT EXPENSE 4,000 SUPPLIES EXPENSE 400 DEP EXPENSE: RENTAL EQUIPMENT 2500
DIVIDENDS 2000 RETAINED EARNINGS 4680
CLOSING ENTRIES
CLOSING ENTRIES AND THERE LEDGERS
RENTAL FEE EARNED 43200 INCOME SUMMARY 43200
RENTAL FEE EARNED
43200
INCOME SUMMARY
43200
CLOSING ENTRIES AND THERE LEDGERS
INCOME SUMMARY…………………………………36520 MAINTENANCE EXP 600 UTILITIES EXPENSE 700 SALARIES EXP 11800 INTEREST EXP 6000 INCOME TAX EXP 10520 RENT EXP 4000 SUPPLIES EXP 400
DEP EXP:EQUIPMENT 2500
CLOSING ENTRIES AND THERE LEDGERS
EXPENSE ACCOUNT INCOME SUMMARY
36520 36520
CLOSING ENTRIES AND THERE LEDGERS
INCOME SUMMARY ……………………………………6680 RETAINED EARNINGS………………………………6680
INCOME SUMMARY RETAINED EARNING
43200(REV) 36520(EXP)
6680 6680(income)
6680(income)
CLOSING ENTRIES AND THERE LEDGERS
CLOSING THE DIVIDENDS ACCOUNTS
RETAINED EARNINGS……………………………………2000 DIVIDENDS………………………………………………..2000
DIVIDEND RETAINED EARNINGS
200020002000 6680(income)
4680
worksheet
• WORK SHEET ACCOUNTING.xls
