PROJECT #1 -THE COMPLETE ACCOUNTING CYCLE

Name: _____Andrea Boatman______________________________

Due Dates:
Part A - Sunday at Midnight MST at the end of Week 3.
Part B - Sunday at Midnight MST at the end of Week 5.
Project 1 is worth at Total of 75 Points, which is 7.5% of your Grade in the Course.
Part A = 30 points and Part B = 45 points
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
Part A - Due in Week 2 - Requirement 1, 2 and 3
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
Part B - Due in Week 5 - Requirements 4 - 10
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
Jounral Entries
General Ledger
Trial Balance
Adjusting Entries
General Ledger
Adjusted TB
Financial Statements
Closing Entries
General Ledger
Post Closing TB

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs,
completed the following transactions:
Oct. 1

Began business by making a deposit in a company bank account of $12,000, in exchange

for 1,200 shares of $10 par value common stock.

Oct. 1

Paid the premium on a one-year insurance policy, $1,200.

Oct. 1

Paid the current month's rent, $1,040.

Oct. 3

Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance was
placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.
Note: Use Accounts Payable for the Balance Due.

Oct. 8

Purchased repair supplies from McKenna Company on credit, $390.

Oct. 12

Paid utility bill for October, $154.

Oct. 16

Cash bicycle repair revenue for the first half of October, $1,362.

Oct. 19

Made payment to McKenna Company, $200.

Oct. 31

Cash bicycle repair revenue for the last half of October, $1,310.

Oct. 31

Declared and paid cash dividend of $800.

Prepare journal entries to record the October transactions in the General Journal below.

Date
Oct. 1
Oct. 1
Oct. 1
Oct. 1
Oct. 1
Oct. 1
Oct. 3
Oct. 3
Oct. 3
Oct. 8
Oct. 8
Oct. 12
Oct. 12
Oct. 16
Oct. 16
Oct. 19

General Journal
Description(Account Name)
Debit
Credit
Cash
12000
Common Stock
12000
Insurance Expense
1200
Cash
1200
Rent Expense
1040
Cash
1040
Repair Equipment
4400
Cash
600
Accounts Payable
3800
Repair Supplies
390
Accounts Payable
390
Utility Expenses
154
Cash
154
Bicycle Repair Revenue
1362
Bicycle Repair Revenue
1362
Accounts Payable
200

This Sheet will be used for Requirements 2, 5 and 9

REQUIREMENT #2:
Post the October journal entries to the following T-Accounts and compute ending balances.

Cash (111)
12,000
1,362 $
1,310 $
$
$
$
$

$
$
$

Bicycle Repair Revenue (411)

$
1,362
$
1,310
2672

1,200
1,040
600
154
200
800

Bal. $10678

Bal. $0

Prepaid Insurance (117)

Store Rent Expense (511)

1,040

$
$1,100

1040

Bal. $0
Repair Supplies (119)
390

Utility Expense (512)

154

$
196

Bal. $194

154

Bal. $0
Repair Equipment (144)
4,400

Insurance Expense (513)

1,200

Bal. $4400

1100
$100

Bal. $0

Accum. Depr.-Repair Equipment (145)

Repair Supplies Expense (514)

70

bal

Accounts Payable (212)

$
3,800
$
390
$
Bal. $3990

70

196

bal

196

Depr. Exp.-Repair Equipment (515)

70
200
bal 0

70

Income Taxes Payable (213)

Income Taxes Expense (516)

40

bal 40
Common Stock (311)
$

bal 0

12,000

Bal. $12000
Retained Earnings (312)
800

1072

bal 272
Dividends (313)

$
Bal. $0

800

40

800

40

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

Rawls Repair Corporation

Trial Balance
October 31
Account Title
Cash
Equipment
Supplies
Accounts Payable
Insurance Expense
Rent Expense
Utility Expense
Service Revenue
Common Stock
Dividends

Debit

Credit
10678
4400
390
3990
1200
1040
154
2672
12000
800

18662

18662

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 repair supplies is $194.
c) The estimated depreciation on repair equipment is $70.
d) The estimated income taxes are $40.

Date
a

General Journal
Description(Account Name)
prepaid insurance
insurance expense

Debit

Credit
1100
1100

repair supplies expense

repair supplies

196

depreciation expense
accumulated depreciation

70

tax expense
tax payable

40

196

70

40

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.
Rawls Repair Corporation
Adjusted Trial Balance
October 31

Debit
Cash
Equipment
Supplies
Accounts Payable
Insurance Expense
Rent Expense
Utility Expense
Service Revenue
Common Stock
Dividends
accumulated depreciation
depreciation expense
supplies expense
prepaid insurance
tax expense
tax payable

Credit
10678
4400
194
3990
100
1040
154
2672
12000
800
70
70
196
1100
40
18772

40
18772

Requirement #7:
Prepare the financial statements for Rawls Repair Corporation as of October 31 in the space below.
You will only be preparing the Income Statement, Statement of Retained Earning and the Balance Sheet.
The Statement of Cash Flows is a required Financial Statement, but is not required for this Project.
Rawls Repair Corporation
Income Statement
For the Month Ending October 31
Revenues:
Bicycle Repair Revenue

2,672

Expenses:
Store Rent Expense
Utility Expense
Insurance Expense
Repair Supplies Exp.
Depreciation Exp.
Income Taxes Exp.
Total Expenses

1,040
154
100
196
70
40
1,600

Net Income

$1,072

Rawls Repair Corporation

Statement of Retained Earnings
For the Month Ending October 31
Retained Earnings, October 1
Add: Net Income
Subtotal
Less: Dividends
Retained Earnings, October 31

$ 1,072
-800
$272

n the space below.

and the Balance Sheet.
ed for this Project.
Rawls Repair Corporation
Balance Sheet
October 31
Assets:
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Less: Accum. Depr.
Total Assets
Liabilities:
Accounts Payable
Income Taxes Payable
Total Liabilities
Stockholders' Equity:
Common Stock
Retained Earnings
Total Stockholders' Equity
Total Liabilities &
Stockholders' Equity

10,678
1,100
194
4,400
-70
16,302

16,302

3,990
40
4,030

272
12,000
$16,302

Requirement #8:
Prepare the closing entries at October 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)

Date

Debit

Credit

Bicycle Repair Revenue

income summary

2672

income summary
Store Rent Expense
Utility Expense
Insurance Expense
Repair Supplies Exp.
Depreciation Exp.
Income Taxes Exp.

1600

income summary
retained earning

1072

retained earning
dividend

2672

1,040
154
100
196
70
40

1072
800
800

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 October 31 in the space below.

Rawls Repair Corporation

Post-Closing Trial Balance
October 31

Cash
Equipment
Supplies
Accounts Payable
Common Stock
accumulated depreciation
prepaid insurance
tax payable
retained earnings
total

10678
4400
194
3990
12000
70
1100

16372

40
272
16372

Project 1 Rubric - Students

Criteria

Good
70% to 89%

Poor
50% to 69%

Step 1
Journal Entries use
-Journal
accurate accounts
Entries (25pts) and amounts; and
debits and credits
are used correctly.

Journal Entries
mostly use
accurate accounts
and amounts; and
debits and credits
are used correctly.

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

Step 2&3

Posting is correct
leading to an
accurate trial
balance.

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

Posting has several

errors leading to a
trial balance with
several errors.

Journal Entries use

accurate accounts
and amounts; and
debits and credits
are used correctly.

Journal Entries
mostly use
accurate accounts
and amounts; and
debits and credits
are used correctly.

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

Posting is correct
leading to an
accurate trial
balance.

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

Posting has several

errors leading to a
trial balance with
several errors.

Three of four
Financial
Statements are
prepared
accurately and
mostly in an
appropriate
format, one
statement has
some errors.

Two of four
Financial
Statements are
prepared
accurately and
mostly in an
appropriate format,
two statements
have some errors.

Parts:

-Posted and
Unadjusted
Trial Balance.
Step 4
-Adjusting
Journal Entries
(10pts)

Step 5&6

Excellent
90% to 100%

-Posted and
Adjusted Trial
Balance. (5pts)
Step 7
All four Financial
Statements are
-Financial
prepared
Statements
accurately and in
(15pts)
an appropriate
format.

Step 8
-Closing
Journal Entries
(10pts)

Journal Entries use

accurate accounts
and amounts; and
debits and credits
are used correctly.

Journal Entries
mostly use
accurate accounts
and amounts; and
debits and credits
are used correctly.

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

Step 9&10

Posting is correct
leading to an
accurate trial
balance.

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

Posting has several

errors leading to a
trial balance with
several errors.

-Posted and
PostclosingTrial

Very Poor
Less than 50%
Journal Entries
have some errors
in use of accounts
and amounts; and
debits and credits
are not used
correctly.
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
Journal Entries
have some errors
in use of accounts
and amounts; and
debits and credits
are not used
correctly.
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
One or fewer of
four Financial
Statements are
prepared
accurately and
mostly in an
appropriate format,
three or all
statements have
some errors.
Journal Entries
have some errors
in use of accounts
and amounts; and
debits and credits
are not used
correctly.
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.