Accounting Cycle Workbook Instructions

Accounting Cycle Workbook Instructions

These transactions will include: the initial setup of the business cash and credit sales making payments to vendors paying store employees managing debt It will help you to print this document as you are making your entries in your workbook. Your textbook prepares you and can be used as a reference to assist you in completing this assignment. You should begin this project in Module Two. There will be novo checkpoints, along the way, at which time you will submit your progress in this workbook to your instructor for review and feedback toward correction and successful demonstration of this accounting cycle as a whole.

Your first check point will cover steps 1 through 4 of this workbook. The first checkpoint is in Module 3. The second checkpoint will have you submit your workbook completed through step 7 in Module 4. You will integrate the feedback, suggestions, and guidance your instructor provides on these steps in the cycle to ensure your success with completion of this cycle. The following steps are included: Step 1: Complete the following in the “July Journal Entries” tab in your workbook (be sure to look for the July Journal Entries tab at the bottom of the Peyote Approved Student Workbook).

The following events occur in July 2014: July 1 – You take $1 5,000 from your personal savings account and buy common stock in Peyote Approved. July 1 -Purchase $8500 in baking supplies from vendor, on account July 3 -? Your parents lend the company $10,000 cash, in exchange for a two- year, 6% note payable. Interest and the principal are repayable at maturity. July 7 -? Pay $3000 toward lease agreement for bakery space. The agreement is for 1 year. The rent is $1 ,500 per month, last month’s rent was required at time of lease agreement.

Lease period is effective July 1st 2014 through June 30th, 2015. July 10-? pay $375 to the county for a business license. July 11 – Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment-?use miss. Expo. ). July 13 – You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock.

The equipment has a 5-year useful life. July 1 3 -? pay $200 for business cards/flyers/posters/ads to use for advertising. July 14 -? Pay $300 for miscellaneous (use miss. Supplies). July 15- Hire part-time helper to be paid $12 per hour. Pay periods are the SST through the 1 5th and 1 6th through the end of the month with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry required on this date; for informational purposes only) July 30- Received telephone bill for July in amount of 545.

Payment is due on August 1 10th July 31 -? pay SSL ,200 for a 12-month insurance policy. Policy effective dates August l, 2014 through July 31st, 2015 July 31 – Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table is provided for you, below) Total July bakery sales were $15,000. 5000 of these sales on accounts receivable step 2: Complete the following transactions in the August Journal Entries tab in your workbook August 5- paid employee for period ending 7/31 August 8-Receive payments from customers towards accounts receivable in amount of 53200.

August 10 – paid July telephone bill August 15- Purchase additional baking supplies in amount of $5000 from vendor, on account. August 15 – Accrue wages earned for employee from period of 1st through 15th of August (Wage calculations table provided below) August 1 5-Pay rent on bakery space $1 500 August 1 8-Receive payments from customers towards accounts receivable In mount of $1 000 August 20- paid $8500 toward baking supplies vendor payable August 20- pay employee for period ending 8/1 5 August 22- $300 in miss. Supplies purchased August 31- received telephone bill for August in amount of 545. Payment is due on September 10th.

August 31- Accrue wages earned for employee for period of August 16th through August 31st August bakery sales total $20,000. $7,500 of this total on accounts receivable. Step 3: Many customers have been asking for more hypo-allergenic products, so in September you start carrying a line of hypo-allergenic shampoos on a trial axis. The following information relates to the purchase and sales Of the shampoo: You use the perpetual inventory method. You are uncertain as to which valuation method to use-?FIFO, LIFO, or weighted average, so you calculate inventory using all three and then decide which one you would like to choose.

Please see the Inventory Valuation tab in your workbook, to review application of costs using the FIFO, LIFO, and average methods based on purchase and sales information. You will choose the method you feel most appropriate, and bring the journal entries from the inventory valuation page onto your journal for the month of September, to ensure the impact of merchandising is reflected in your reporting. Complete the following transactions in the September Journal Entries tab in your workbook. September 1- paid dividends to self in amount of 53000 September 5-pay employee for period ending 8/31 September 7-Purchase merchandise for resale.

See inventory valuation tab for details. September 8- Receive payments from customers toward accounts receivable in amount of $4000 September 10- pay August telephone bill September 11-purchase baking supplies in amount of $ 7,000 from vendor on count. September 13- Paid on supplies vendor account in amount of $5000 September 15- Accrue employee wages for period Of September 1 SST through September 1 5th September 15- Pay rent on bakery space $ 1500 September 15-Record merchandise sales transaction. See inventory valuation tab for details.

September 15-Record impact of sales transaction on COGS and the inventory asset. See inventory valuation tab for details. September 20- Pay employee for period ending 9/15 September 20;Purchase merchandise inventory for resale to customers. September 24- Record sales of merchandise to customers. September 24- Record impact of sales transaction on COGS and the inventory See inventory valuation tab for details. September 30- Purchase merchandise inventory for resale to customers. See inventory valuation tab for details.

September 30-Accrue employee wages for period of September 16th through September 30th Total September bakery sales $25,000. $6,000 of these sales on accounts receivable. Step 4: Post entries to t accounts. Use the t accounts page in your workbook to post all journal entries to the appropriate ledger account and calculate account balances as of September Goth. Step 5: Prepare the Unadjusted Trial Balance SE the t account balances completed in the previous step to prepare the unadjusted trial balance portion of the Trial Balance tab in your workbook.

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