Week 4: Case Study
Case Study
The Case Study is due this week!
Full Case Study details are available in the Case Study Excel documentLinks to an external site.Open this document with ReadSpeaker docReader .
Instructions
| CASE STUDY – THE COMPLETE ACCOUNTING CYCLE | |
| Name: ___________________________________ | |
| This Case Study is worth 100 points, or 10% of your final course grade. | |
| This Case Study relates to TCOs E and F, and Chapters 3 and 4. | |
| MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. | |
| There are 10 sheets in the Workbook, including this one. | |
| All of the information that you need for the project is located in this Workbook. | |
| Requirements | Sheet in Workbook |
| Requirement 1—Prepare the Journal Entries in the General Journal | Journal Entries |
| Requirement 2—Post Journal Entries to the General Ledger | General Ledger |
| Requirement 3—Prepare a Trial Balance | Trial Balance |
| Requirement 4—Prepare the Adjusting Entries | Adjusting Entries |
| Requirement 5—Post Adjusting Entries to the General Ledger | General Ledger |
| Requirement 6—Prepare an Adjusted Trial Balance | Adjusted Trial Balance |
| Requirement 7—Prepare the Financial Statements | Financial Statements |
| Requirement 8—Prepare the Closing Entries | Closing Entries |
| Requirement 9—Post Closing Entries to the General Ledger | General Ledger |
| Requirement 10—Prepare the Post Closing Trial Balance | Post-Closing Trial Balance |
| Hint for success: Review the Week 2 and 3 Activities prior to starting this project. | |
| You can hover over the red pointer at the top right-hand corner of the cell to read the hint. | |
| Hints are provided for the following balances: | |
| 1) The debits for the journal entries are on the Journal Entries tab. | |
| 2) The credits for the journal entries are on the Journal Entries tab. | |
| 3) The cash balance is on the General Ledger tab. | |
| 4) The debits for the trial balance are on the Trial Balance tab. | |
| 5) The credits for the trial balance are on the Trial Balance tab. | |
| 6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab. | |
| 7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab. | |
| 8) Net income for the income statement is on the Financial Statements tab. | |
| 9) Retained earnings as of July 31 are on the Financial Statements tab. | |
| 10) Total assets for the balance sheet are on the Financial Statements tab. | |
| 11) Total liabilities and shareholders' equity for the balance sheet are on the Financial Statements tab. | |
| 12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab. | |
| 13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab. |
Journal Entries
| Requirement #1: | |||||||||||||
| During its first month of operation, the True Consulting Corporation, which specializes in management consulting, | |||||||||||||
| completed the following transactions. | |||||||||||||
| July 1 | Issued 15,000 shares of the company's common stock in exchange for $15,000. | ||||||||||||
| July 3 | Purchased a truck for $8,000. A down payment of $3,000 was made, with the balance on account. | ||||||||||||
| July 5 | Paid $1,200 to cover rent from July 1 through September 30. | ||||||||||||
| July 7 | Purchased $2,000 of supplies on account. | ||||||||||||
| July 10 | Billed customers for consulting services performed, $3,700. | ||||||||||||
| July 14 | Paid $500 toward the amount owed for the supplies purchased on July 7. | ||||||||||||
| July 15 | Paid $1750 in cash for employee wages. | ||||||||||||
| July 19 | Collected $1600 in cash from customers that were billed on July 10. | ||||||||||||
| July 21 | Received $4,200 cash from customers for services performed. | ||||||||||||
| July 31 | Paid $350 in cash for truck repairs. | ||||||||||||
| July 31 | Declared and Paid $700 in cash dividends. | ||||||||||||
| Prepare journal entries to record the July transactions in the General Journal below. | Use the following account names for journal entries. | ||||||||||||
| General Journal | Chart of Accounts | ||||||||||||
| Date | Description(Account Name) | Debit | Credit | Category | Account Title | Normal Balance | |||||||
| Assets | |||||||||||||
| Cash | Debit | ||||||||||||
| Accounts Receivable | Debit | ||||||||||||
| Supplies | Debit | ||||||||||||
| Prepaid Rent | Debit | ||||||||||||
| Equipment | Debit | ||||||||||||
| Accumulated Depreciation – Equipment | Credit | ||||||||||||
| Liabilities | |||||||||||||
| Accounts Payable | Credit | ||||||||||||
| Income Tax Payable | Credit | ||||||||||||
| Stockholders' Equity | |||||||||||||
| Common Stock | Credit | ||||||||||||
| Retained Earnings | Credit | ||||||||||||
| Dividends | Debit | ||||||||||||
| Revenue | |||||||||||||
| Service Revenue | Credit | ||||||||||||
| Expenses | |||||||||||||
| Rent Expense | Debit | ||||||||||||
| Wages Expense | Debit | ||||||||||||
| Repairs & Maintenance Expense | Debit | ||||||||||||
| Supplies Expense | Debit | ||||||||||||
| Depreciation Expense | Debit | ||||||||||||
| Income Tax Expense | Debit | ||||||||||||
| Clearing Account | |||||||||||||
| Income Summary | |||||||||||||
| 0 DeVry: Debits equal $39,000 |
0 DeVry: Credits equal $39,000 |
||||||||||||
| Note: Remember that debits must equal credits—All of your journal entries should balance. | |||||||||||||
General Ledger
| This Sheet will be used for Requirements 2, 5, and 9. | |||
| Requirement #2: | |||
| Post the July journal entries to the following T-accounts and compute ending balances. | |||
| Cash DeVry: The balance of the Cash account after posting all journal entries should be $13300. |
Service Revenue | ||
| Accounts Receivable | Rent Expense | ||
| Supplies | |||
| Wages Expense | |||
| Prepaid Rent | |||
| Repairs & Maintenance Expense | |||
| Equipment | |||
| Supplies Expense | |||
| Accumulated Depreciation-Equipment | |||
| Depreciation Expense | |||
| Accounts Payable | |||
| Income Tax Expense | |||
