Accounting System For Your Business

REVISION ONLY NEEDED
REVISION INSTRUCTIONS:
You have several errors for September. Your grade is 1/3. I did not grade assignment two, because one has to be corrected first. See the attached file
Also, in the future, please prepare the trial balance in Excel.
After earning your Accounting degree from Nicholls State University and working several years with a local CPA firm, you decided it was time to open your own Accounting practice. You decided that initially, you would start small and focus on providing quality accounting and tax services.
After much thought, you decide to organize your business as a corporation. Although, a sole proprietorship would be easier to set up, you want to eliminate any personal liability that you might be subject to if you were to organize as a sole-proprietorship. You also realize that it is more complicated to organize your business as a corporation and that you might incur more in taxes, but you feel it’s worth the extra cost.
REQUIRED:
You will need to set up an accounting system for your business. Therefore, you will have to create/use a general journal and a general ledger. You will be responsible for journalizing all transactions and posting them to the appropriate ledger accounts. At the end of each month, you will be required to prepare a trial balance. Additionally, you will be required to prepare year-end adjusting entries and an adjusted trial balance. You will also have to prepare a set of financial statements for Your Accounting Corporation. This will include, in proper format, an Income Statement, Statement of Retained Earnings, Balance Sheet, and a Statement of Cash Flows.
After preparing your financial statements, you will also be required to record and post the closing entries and prepare a post-closing trial balance. You have selected a fiscal year that matches the calendar year.
For the Month of September (3 points)
· In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts.
· Post the journal entries for the month to the general ledger accounts, use appropriate posting references.
· Prepare a trial balance for the period ending September 30.
o Using proper format, create your trial balance in Microsoft Excel. Your file name should include your name and the assignment name.
o Submit the trial balance in Moodle.
o Retain your general journals and ledgers until you have completed assignment #7.
For the Month of October (3 points)
· In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts.
· Post the journal entries for the month to the general ledger accounts, use appropriate posting references.
· Prepare a trial balance at the end of the period ending October 30.
o Using proper format, create your trial balance in Microsoft Excel.
o Submit the trial balance in Moodle.
o Retain your general journals and ledgers until you have completed assignment #7.

YOUR NAME Accounting Corporation

Financial Accounting Practice Set

(For the months September, October, November, and December)

After earning your Accounting degree from Nicholls State University and working several years with a local CPA firm, you decided it was time to open your own Accounting practice.  You decided that initially, you would start small and focus on providing quality accounting and tax services. 

After much thought, you decide to organize your business as a corporation.  Although, a sole proprietorship would be easier to set up, you want to eliminate any personal liability that you might be subject to if you were to organize as a sole-proprietorship.  You also realize that it is more complicated to organize your business as a corporation and that you might incur more in taxes, but you feel it’s worth the extra cost.

REQUIRED:

You will need to set up an accounting system for your business.  Therefore, you will have to create/use a general journal and a general ledger.  You will be responsible for journalizing all transactions and posting them to the appropriate ledger accounts.  At the end of each month, you will be required to prepare a trial balance.  Additionally, you will be required to prepare year-end adjusting entries and an adjusted trial balance.  You will also have to prepare a set of financial statements for Your Accounting Corporation.  This will include, in proper format, an Income Statement, Statement of Retained Earnings, Balance Sheet, and a Statement of Cash Flows. 

After preparing your financial statements, you will also be required to record and post the closing entries and prepare a post-closing trial balance.  You have selected a fiscal year that matches the calendar year.

The following events occurred in August and September:

8/1      YOU filed a charter with the State of Louisiana to form the YOUR Accounting Corporation.  The charter authorizes you to issue 5000 shares of $2 par common stock.  The state charged you a $75 fee to file the charter.  Since your business is not yet approved, you had to pay this fee using personal funds.

9/1      You received your charter from the State of Louisiana and officially opened your business.   Your first order of business was to become a shareholder of YOUR Accounting Corp.  To do this, you purchased 600 shares of common stock by issuing a check to YOUR Accounting Corp for $12,000.  You used this money to open a checking account at First Funds Bank.

9/1     You rented an office for YOUR Accounting Corp.  The monthly rent is $500, with the first             month’s rent due immediately.  You issue check #100 to Office Builders for the first         month’s rent.

9/1     You turned on utilities with Max Power Co. and WaterWorks #1. Max Power Co. collected a                    $50 deposit. Waterworks #1 collected a $20 deposit. You issued check #’s 101 and 102, respectively.

9/2      You then went to the Apple store and purchased a new computer system for your business.  Your Mac Pro cost $3000 and your new printer cost $500.  You set up a 30-day account with Apple to make this purchase.

9/2      You purchased office furniture from Business World Supplies in the amount of $1750. You issued check #103 to pay for the items. NOTE: The total for the office furniture is below the capitalization threshold.

9/4      You decided to purchase a new vehicle for your business.  Upon visiting Pro-Auto, you decide on a new SUV at a cost of $55,000.  This vehicle will be used 100% for business purposes.  You finance the vehicle with Pig E Bank at a rate of 5% for 5 years.  Your first monthly payment is due on October 4.

            NOTE:  You will need to create a loan amortization schedule to determine the amount of the monthly note and the interest expense for each month.  You can use a website such as www.bankrate.com to create the schedule.  When recording your journal entries, round all amounts to the nearest dollar.

9/5     You purchased supplies from KEM Supply for your business at a cost of $600.  KEM opened      a customer charge account for you.  The payment terms on your account will be 2/10, net            30.  The time period for determining the payment amount begins on the purchase date.

9/5     Leah Legality, your attorney, filed for your Occupational License with the parish. She will             invoice you the bill.

9/6     You purchased a one-year auto insurance policy from InsureMart for $1200.  InsureMart           gave you an invoice for the policy.  YOUR Accounting Corporation capitalizes the insurance      policy and records an expense at year-end for the expired portion of the policy.

9/10   Your first client, Red Fische, came in today needing assistance with filing the appropriate paperwork to start his new seafood restaurant.  You issued invoice #1 to Red Fische and he paid you an initial $2,000 Engagement Fee. Red Fische also agreed to contract with you to provide accounting services for $2,500 per month.

9/12   You issue check #105 to YOUR Accounting Corp to establish a $600 Petty Cash Fund.  You will use this account to make small cash purchases.

9/12   You reimburse yourself for the filing fees associated with forming your corporation.

9/14   You paid KEM Supply by issuing check #106.

9/15   You hire an administrative assistant, Mandi Handi, she will be paid a monthly salary of $1500.  You have decided that all pay periods will end on the last day of the month and that checks will be issued on the 5^th 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 insurance rates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages per employee.  The employer FICA rate is 7.65%.

9/20   You visited a new client, Anita Cooke, to set up a Quickbooks accounting system for her new business, Cooking For You.  You gave Anita and invoice #2 for the Engagement Fee and she paid you by issuing a check in the amount of $2,000.  Anita also agreed to a monthly fee of $1,500 for you to handle her ongoing accounting needs.

9/22   You purchased $50 of fuel for your new SUV from Get ‘n Go.  You charged this to your Get ‘n Go account.

9/25   You really don’t like cleaning, so you contracted with Clean Machine for weekly janitorial             services. You will be invoiced $100 per month after services are performed.

9/30   First Funds Bank drafted $15 from your bank account for service charges.

9/30   Mandi sent pro-rated invoices, #3 & #4, to Red Fische and Cooking For You for Monthly Accounting Services.  The payment terms are 1/10, net 30.

9/30   You accrued interest on the Pig E. Bank note.  Accrue interest based on the number of days in the month.

9/30   You computed and accrued the payroll for September.

9/30   You received monthly bills for the following: 

                        Max Power Company - $100, terms n/30

                        WaterWorks #1 - $20, terms n/30.

The following events occurred in October:

10/1   You paid the monthly office rent of $500 by issuing check #107.

10/1   Pest Away began bi-monthly services today. Fees are to be paid at the time of service. You             issued check #108 in the amount of $35.

10/2   You received and paid the bill from the Apple Store by issuing check #109.

10/2   You received and paid invoice #674 from Leah Legality. The $275 bill is for $175 in         attorney fees and $100 for the cost of the Occupational License. You issued check #110.

10/4   You make the first monthly payment to Pig E Banks by issuing check #111.

10/5   Igotta Troubles came to your office looking for assistance with cleaning up her accounting problems.  You agree to assist her and agree upon an Engagement Fee of $2,000 plus an hourly charge of $250 for Hourly Accounting Services to be billed on the 15^th and 30^th of each month with payment due in 15 days.  Igotta writes you a check for the engagement fee in the amount of $2,000 in payment of invoice #5.

10/5   You issued check #112 to Mandi Handi for the September payroll.

10/7   You received a check from Red Fische in full payment of invoice #3.

10/9   You decide that it is time to purchase a business cell phone.  You visit the Apple store and purchase an Iphone 11 for a total purchase price of $1000.  You pay for the phone by issuing check #113.

10/12 You issued check #114 to Max Power and check #115 to WaterWorks #1 in payment of September utility bills.

10/14 You sent invoice #6 to Igotta Troubles for 25 hours of Hourly Accounting Services,

            terms 1/10, n30.

10/15 You made an online purchase of $180 with YOUR Accounting Corp.’s bank debit card to             YourSuppliesOnline. There were no sales tax collected on the purchase. There is a parish           sales tax of 4.5% and a state sales tax of 5.5% that is due before the 21^st of next month.            Totals should be rounded to the nearest dollar.  The sales taxes will be recorded and paid    on 11/12.

10/16 You paid the fuel bill from Get ‘n Go for the fuel purchased on 9/22 by issuing check #116.

10/18 Ima Payne comes to you needing assistance with depositing the monthly payroll taxes for her business.  You perform this service and hand her invoice #7 in the amount of $600 for Tax Services.  Ima pays you in cash.

10/19 Paul’s Plumbing was called out to fix the bathroom toilet. He left an invoice for $220 to be          paid within 30 days.

10/20 You received a check from Cooking For You in full payment of Invoice #4.

10/25 You Accounting Corp. declared and paid dividends of $2 per share to its shareholders of record.  The dividends are paid by issuing check #117.

10/25 Check #118 was issued to Clean Machine in the amount of $100 for services rendered from       9/25-10/25.

10/30 You sent the following invoices, terms 1/10, net 30:

                        #8 to Igotta Troubles for 10 hours of Hourly Accounting Services

                        #9 to Red Fische for Monthly Accounting Services, and

                        #10 to Cooking For You for Monthly Accounting Services.

10/30 You accrued interest on the Pig E. Bank note.  Accrue interest based on the number of days in the month.

10/30 You computed and accrued the payroll for October.

10/30 First Funds Bank drafted $15 from your bank account for service charges.

10/30 You received monthly bills for the following:

                        Max Power Company - $200, terms n/30

                        WaterWorks #1 - $20, terms n/30

                        Great Coverage Cellular - $50, terms n/3

The following events occurred in November:

11/1   You purchase a 6-month liability insurance policy for YOUR Accounting Corp. by issuing check #119 in the amount of $300.  YOUR Accounting Corporation capitalizes the insurance policy and records an expense at year-end for the expired portion of the policy.

11/1   You paid the monthly office rent of $500 by issuing check #120.

11/2   You make the second monthly payment to Pig E Banks by issuing check #121.

11/3   You issued check #122 to pay Paul’s Plumbing.

11/4   You purchase breakfast for the office from Cooking For You.  You pay for breakfast by taking $20 out of the petty cash fund.

11/5   You issue check #123 to Mandi Handi for the October payroll.

11/6   You receive a $4,000 check from Igotta Troubles.

11/7   You received full payment of invoice #10 from Cooking For You.

11/8   You issued check #124 to Max Power and check #125 to WaterWorks #1 and check #126 to Great Cellular Coverage in payment of October utility bills and Telephone bill.

11/10 You contracted Signs R Us to design and fabricate a sign to place on your office to help advertise your business.  Signs R Us gave you a bill totaling $600, payment is due upon delivery and installation of the sign.

11/12 You received full payment of invoice #9 from Red Fische.

11/12 To pay taxes from your online purchase you issued check #127 to Parish Sales Tax Fund           and check #128 to LA Dept. of Revenue.

11/15 You sent invoice #11 to Igotta Trouble for 20 hours of Hourly Accounting Services.

11/18 Ima Payne walks into your office needing assistance with Quickbooks Online.  You pull up her business and fix her problems.  You issue invoice #12 to Ima for 6 hours of Hourly Accounting Services.  Ima pays you $1,500 in cash.

11/23 It’s Thanksgiving time! You are a big believer in giving to those less fortunate. YOUR        Accounting Corp. issued check #129 to the non-profit organization No Kids Hungry in the       amount of $300.

11/25 You remitted payment to the U.S Treasury for the federal income taxes, FICA taxes and FUTA taxes related to the September payroll with check #130.  In addition, you remitted payment to the Louisiana Department of Revenue with check #131 for the state income taxes and SUTA taxes related to the September payroll.

11/25 Check #132 was issued to Clean Machine in the amount of $100 for services rendered from             10/26-11/25.

11/30 You sent the following invoices, terms 1/10, net 30:

                        #13 to Igotta Troubles for 12 hours of Hourly Accounting Services

                        #14 to Red Fische for Monthly Accounting Services, and

                        #15 to Cooking For You for Monthly Accounting Services.

11/30 You accrued interest on the Pig E. Bank note.  Accrue interest based on the number of days in the month.

11/30 You computed and accrued the payroll for November.

11/30 First Funds Bank drafted $15 from your bank account for service charges.

11/30 You received monthly bills for the following:

                        Max Power Company - $150, terms n/30

                        WaterWorks #1 - $20, terms n/30

                        Great Coverage Cellular - $50, terms n/30.

The following events occurred in December:

12/1   You paid the monthly office rent of $500 by issuing check #133.

12/1   Pest Away was here for its bi-monthly service. You issued check #134 for $35.

12/2   You make the third monthly payment to Pig E Banks by issuing check #135.

12/5   You issue check #136 to Mandi Handi for the November payroll.

12/9   You received the following checks in the mail:

• Check #1212 from Igotta Troubles in the amount of $4,000


• Check #809 from Red Fische in the amount of $2,475


• Check #2569 from Cooking For You in the amount of $1485.

12/12 You remitted payment to the U.S Treasury for the federal income taxes, FICA taxes and FUTA taxes related to the October payroll with check #137.  In addition, you remitted payment to the Louisiana Department of Revenue with check #138 for the state income taxes and SUTA taxes related to the October payroll.

12/15 You send invoice #16 to Igotta Troubles for 10 hours of Hourly Accounting Services.

12/15 You contracted with Holly Jolly to fill in temporarily while Mandi Handi is on vacation for the holidays. Holly Jolly will work 2 weeks for a payment of $750 for her services.

12/20 Ima Payne is back and needs assistance filing Federal Tax Form 990 for her business.  You perform this service and hand her invoice #17 in the amount of $500 for Tax Services.  Ima pays you in cash.

12/22 You receive a check in the amount of $6,000 from Igotta Troubles.

12/30 You issue check #139 to Holly Jolly for services rendered.

12/30 You sent the following invoices, terms 1/10, net 30:

                        #18 to Igotta Troubles for 10 hours of Hourly Accounting Services

                        #19 to Red Fische for Monthly Accounting Services, and

                        #20 to Cooking For You for Monthly Accounting Services.

12/30 You accrued interest on the Pig E. Bank note.  Accrue interest based on the number of days in the month.

12/30 You computed and accrued the payroll for December.  In addition to paying the regular monthly salary to Mandi Handi, you also authorize a Christmas bonus of $500 for Mandi and $10,000 for yourself.

12/30 First Funds Bank drafted $15 from your bank account for service charges.

12/30 You received monthly bills for the following:

                        Max Power Company - $170, terms n/30

                        WaterWorks #1 - $20, terms n/30

                        Great Coverage Cellular - $50, terms n/30

Journalize the following year-end adjusting entries:

12/31 Journalize the depreciation expense for all Property, Plant and Equipment.  Information related to all assets is shown in the table below:

12/31 Calculate the amount of the Long-Term Note Payable to Pig E. Bank that will come due in the next fiscal year.  Prepare a journal entry to reclassify this amount as Current Maturities of Long-Term Debt. Hint:  You are reclassifying the next 12-months of principle on the note as a current liability.

12/31 Calculate the amount of the prepaid insurance that has expired during the year.  Prepare the appropriate adjusting entry.

12/31 A physical count of the supplies on hand indicates that you have $168 of supplies remaining.

YOUR Accounting Corporation

 PRACTICE SET

(For the Months of September, October, November, & December)

You are required to:

Assignment #1:  For the Month of September (3 points)

• In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry.  Use only the accounts shown in the chart of accounts. 


• Post the journal entries for the month to the general ledger accounts, use appropriate posting references. 


• Prepare a trial balance for the period ending September 30. 
  
  
  
  • Using proper format, create your trial balance in Microsoft Excel.  Your file name should include your name and the assignment name. 
  
  
  • Submit the trial balance in Moodle. 
  
  
  • Retain your general journals and ledgers until you have completed assignment #7. 
  
  
  
  

Assignment #2:  For the Month of October (3 points)

• In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry.  Use only the accounts shown in the chart of accounts. 


• Post the journal entries for the month to the general ledger accounts, use appropriate posting references. 


• Prepare a trial balance at the end of the period ending October 30. 
  
  
  
  • Using proper format, create your trial balance in Microsoft Excel. 
  
  
  • Submit the trial balance in Moodle. 
  
  
  • Retain your general journals and ledgers until you have completed assignment #7. 
  
  
  
  

Assignment #3:  For the Month of November (3 points)

• In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry.  Use only the accounts shown in the chart of accounts. 


• Post the journal entries for the month to the general ledger accounts, use appropriate posting references. 


• Prepare a trial balance at the end of the period ending November 30. 
  
  
  
  • Using proper format, create your trial balance in Microsoft Excel. 
  
  
  • Submit the trial balance in Moodle. 
  
  
  • Retain your general journals and ledgers until you have completed assignment #7. 
  
  
  
  

Assignment #4:  For the Month of December (3 points)

• In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry.  Use only the accounts shown in the chart of accounts. 


• Post the journal entries for the month to the general ledger accounts, use appropriate posting references. 


• Prepare a trial balance at the end of the period ending December 30. 
  
  
  
  • Using proper format, create your trial balance in Microsoft Excel. 
  
  
  • Submit the trial balance in Moodle. 
  
  
  • Retain your general journals and ledgers until you have completed assignment #7. 
  
  
  
  

Assignment #5:  Year-end Adjusting Entries (3 points)

• In proper General Journal format, record the year-end adjusting entries; include descriptions of each transaction with your journal entry.  Use only the accounts shown in the chart of accounts. 


• Post the journal entries for the month to the general ledger accounts, use appropriate posting references. 


• Prepare an adjusted trial balance for the period ending December 31. 
  
  
  
  • Using proper format, create your trial balance in Microsoft Excel. 
  
  
  • Submit the trial balance in Moodle. 
  
  
  • Retain your general journals and ledgers until you have completed assignment #7. 
  
  
  
  

Assignment #6:  Financial Statements (5 points)

• Prepare Year-End Financial Statements for YOUR Accounting Corporation.  This includes the Income Statement, Statement of Stockholder’s Equity, Balance Sheet and Statement of Cash flows.
  
  
  
  • Using proper format, create your financial statements in Microsoft Excel.  Do Not Use templates in the preparation of your financial statements. 
  
  
  • Submit the financial statements in Moodle. 
  
  
  
  

Assignment #7:  Closing Entries (5 points)

• In proper General Journal format prepare the closing entries for YOUR Accounting Corporation. 


• Post the closing entries to the General Ledger Accounts, use appropriate posting references.


• Prepare a post-closing trial balance.
  
  
  
  • Using proper format, create your post-closing trial balance in Microsoft Excel. 
  
  
  • Submit the post-closing trial balance in Moodle. 
  
  
  • Submit your general journals and general ledgers in class. 
  
  
  
  

CHART OF ACCOUNTS