CELEBRITY CONSULTANTS, INC. THE ACCOUNTING CYCLE Accounting Cycle Analyze Transactions 1. Journalize (Record in Journal) 2. Post (to General Ledger/T-accounts) Work Sheet Use Work Sheel to collect, summarize info, prepare adjusting entries and aid in preparing financial statements (steps 4-7) 3. Prepare Unadjusted TRIAL BALANCE (use work sheet) 4. Prepare Adjusting Entries (use work sheet) 5. Prepare Adjusted TRIAL BALANCE (use worksheet) 6a. Use worksheet to compute Income or Loss in Income Statement column & Balance sheet account totals) Prepare Financial Statements 6. Prepare Financial Statements a. Income Statement b. Statement of Retained Earnings c. Balance Sheet Closing Process 7. Close Temporary Accounts (Revenues, Expenses, Dividends, Income Summary) Post-Closing Trial Balance (n. 114 P5) 8. Prepare Post-closing TRIAL BALANCE 9. Record Reversing entries (optional) CELEBRITY CONSULTANTS, INC. INSTRUCTIONS: Complete the following steps in the order given. 1. Analyze each of the following transactions for Celebrity Consultants for the firm's first month of business (January 1-31) 2. Record the transactions noted below in the General Journal Note: Use the account titles and numbers in the chart of accounts provided and round all calculations to the nearest whole dollar. 3. Post the transactions to the General Ledger accounts. 4. Prepare a 10-column worksheet using your knowledge of what has taken place during January to prepare an Unadjusted Trial Balance 5. Record all Adjusting entries necessary at January 31 in General Journal. Post January 31 adjustments to General Ledger accounts & update the 10-column worksheet by recording in adjustment column. 6. Prepare Adjusted Trial Balance by updating the 10 column worksheet. 7. Prepare Financial Statements in proper form: a. Income Statement b. Statement of Retained Earnings c. Balance Sheet Note: Blank statements are not provided, may use a spreadsheet program to prepare the required statements 8. Record journal entries to close Temporary Accounts (Revenue, Expenses, Income Summary) and post to General Ledger Accounts. 9. Prepare a Post-closing Trial Balance (Blank form not provided, may use spreadsheet program to prepare). 10. Prepare a Written Reflection: Reflection and sharing of you experience with this assignment is an important part of internalizing the skills and knowledge for this course. As part of this assignment, students will complete a written reflection discussing how the assignment strengthened your understanding of course content, assess performance in completing each step of the practice set, and how you will use the skills and knowledge learned in the future. I'll provide prompts to assist with the reflection. Your experience with the assignment will be shared in a class debrief over the assignment CELEBRITY CONSULTANTS, INC. TRANSACTIONS: Transaction January 1 Owner, Tom Ford, invested $260,000 cash along with office equipment that had a $90,000 market value in exchange for 35,000 shares of Sio par value common stock in Celebrity Consultants, Inc. January 1 Purchased land and an office building for $140.000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes) January 1 Purchased a one-year insurance policy, effective January 1, for $2,400. Purchased office supplies of $3,600 on account from Office Depot January 3 January 5 Established a petty cash fund of $400. January 7 Placed an order with the LA Times newspaper for advertising, which will run during January, February and March. The advertising, which cost $1,800, was paid for on this date in order to obtain a lower price January 10 January 12 Completed consulting job for Brad Pitt, and billed him total of $12,000, due in 30 days. Completed consulting job totaling $18.500 for Beyonce Knowles, and collected $10,000 cash with the balance due in 30 days January 15 Paid the semi-monthly payroll, which totaled $8,000, to the firm's workers, all of which are classified as independent contractors Received $15,000 from Tiger Woods for 6 month's consulting services to begin February 1 January 18 January 19 January 20 Paid Office Depot S2.500 on the account balance Received 58,000 from Brad Pitt for services billed January 10" Completed 55,000 consulting job for Taylor Swift and received full cash payment. Received $4,000 from Beyonce Knowles for consulting services completed January 12 January 24 January 25 January 30 Received the January telephone bill from AT&T for $375, due Feb 15. January 31 January 31 January 31 Paid the payroll to firm's workers for the second half of January Received utility bills for January due Feb 16, from SWEPCO for $360&LA Water Utilities for $280. An audit of the petty cash fund determined the following Receipts Postage $24 Office supplies Mise Exp Currency and Coin Reimburse Petty Cash and record the entry from the information above January 31 Declared & paid cash dividend of S. 10 per Share to the shareholders of record on January 31. SUPPLEMENTAL ADJUSTING ENTRY INFORMATION: a. An inventory of office supplies was taken on January 31 & found that $2,100 of supplies remained on hand. b. An invoice of $280 for repair of office equipment dated January 26 had not yet been recorded. c. The building will be depreciated on a straight-line basis over 30 years with no salvage value. d. The equipment will be depreciated on a straight line basis over 10 years with no salvage value. c. Review accounts for other adjustments necessary at January 31 in addition to those indicated in items a.d. CELEBRITY CONSULTANTS, INC. 100 150 CHART OF ACCOUNTS BALANCE SHEET ACCOUNT NUMBER ACCOUNT NAME Cash 105 Petty Cash 110 Accounts Receivable 120 Office Supplies 130 Prepaid Insurance 135 Prepaid Advertising Office Equipment I55 Accumulated Depreciation, Office Equipment 160) Building I 65 Accumulated Depreciation, Building 190) Land 200 Accounts Payable 220 Uncarned Consulting Revenue 250 Notes Payable 255 Interest Payable 300 Common Stock 350 Retained Earnings 355 Dividends alta hai INCOME STATEMENT ACCOUNT NUMBER ACCOUNT NAME 400 Consulting Revenue 410 Interest Revenue 500 Payroll Expense 502 Advertising Expense 505 Insurance Expense 509 Interest Expense 520 Telephone Expense 535 Utilities Expense 530 Repairs Expense Postage Expense 540] Supplies Expense 550 Depreciation Expense, Office Equipment 560 Depreciation Expense, Building 580 Miscellaneous Expense Cash Over and Short 901 Income Summary 535 590 CELEBRITY CONSULTANTS, INC. GENERAL JOURNAL PAGE ACCOUNT TITLE DOC POST NO. REF. GENERAL DEBIT CREDIT TTTTTTTTTTTT ** | FFFFFFFFFFFFTTTTTTTTTTH" | TTT TTTT ACCOUNTING FORM TEMPLATES General Journal (make copies as needed for recording journal entries) General Ledger (made coples as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC General Ledger ACCOUNT CASH ACCOUNT NO. 100 Date Description Post Ref. Credit Balance IIIIII General Ledger ACCOUNT: PETTY CASH ACCOUNT NO. 105 Date Description POSE Ref. Debit Credit Balance General Ledger ACCOUNT: ACCTS RECEIVABLE ACCOUNT NO 110 Date Description POSL Ref. Debit Credit Balance ACCOUNTING FORM TEMPLATES General Journal (make copies as needed for recording journal entries) General Ledger (made copies as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC General Ledger ACCOUNT ACCOUNT NO Dale Post. Description Debit Balance General Ledger ACCOUNT ACCOUNT NO Description Dobil Credit Balance General Ledger ACCOUNT: ACCOUNT NO Date Description Debit Credit Balance General Ledger ACCOUNT: ACCOUNT NO Description Debit Credit Balance ACCOUNTING FORM TEMPLATES General Journal (make coples as needed for recording journal entries) General Ledger (made coples as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC. Worksheet For the month ended January 31 For the month anded lanuary Miented Trial Balance statement Talance Sheet & Statement of Owner's Equity Total Net Income/Loss Total CELEBRITY CONSULTANTS, INC. THE ACCOUNTING CYCLE Accounting Cycle Analyze Transactions 1. Journalize (Record in Journal) 2. Post (to General Ledger/T-accounts) Work Sheet Use Work Sheel to collect, summarize info, prepare adjusting entries and aid in preparing financial statements (steps 4-7) 3. Prepare Unadjusted TRIAL BALANCE (use work sheet) 4. Prepare Adjusting Entries (use work sheet) 5. Prepare Adjusted TRIAL BALANCE (use worksheet) 6a. Use worksheet to compute Income or Loss in Income Statement column & Balance sheet account totals) Prepare Financial Statements 6. Prepare Financial Statements a. Income Statement b. Statement of Retained Earnings c. Balance Sheet Closing Process 7. Close Temporary Accounts (Revenues, Expenses, Dividends, Income Summary) Post-Closing Trial Balance (n. 114 P5) 8. Prepare Post-closing TRIAL BALANCE 9. Record Reversing entries (optional) CELEBRITY CONSULTANTS, INC. INSTRUCTIONS: Complete the following steps in the order given. 1. Analyze each of the following transactions for Celebrity Consultants for the firm's first month of business (January 1-31) 2. Record the transactions noted below in the General Journal Note: Use the account titles and numbers in the chart of accounts provided and round all calculations to the nearest whole dollar. 3. Post the transactions to the General Ledger accounts. 4. Prepare a 10-column worksheet using your knowledge of what has taken place during January to prepare an Unadjusted Trial Balance 5. Record all Adjusting entries necessary at January 31 in General Journal. Post January 31 adjustments to General Ledger accounts & update the 10-column worksheet by recording in adjustment column. 6. Prepare Adjusted Trial Balance by updating the 10 column worksheet. 7. Prepare Financial Statements in proper form: a. Income Statement b. Statement of Retained Earnings c. Balance Sheet Note: Blank statements are not provided, may use a spreadsheet program to prepare the required statements 8. Record journal entries to close Temporary Accounts (Revenue, Expenses, Income Summary) and post to General Ledger Accounts. 9. Prepare a Post-closing Trial Balance (Blank form not provided, may use spreadsheet program to prepare). 10. Prepare a Written Reflection: Reflection and sharing of you experience with this assignment is an important part of internalizing the skills and knowledge for this course. As part of this assignment, students will complete a written reflection discussing how the assignment strengthened your understanding of course content, assess performance in completing each step of the practice set, and how you will use the skills and knowledge learned in the future. I'll provide prompts to assist with the reflection. Your experience with the assignment will be shared in a class debrief over the assignment CELEBRITY CONSULTANTS, INC. TRANSACTIONS: Transaction January 1 Owner, Tom Ford, invested $260,000 cash along with office equipment that had a $90,000 market value in exchange for 35,000 shares of Sio par value common stock in Celebrity Consultants, Inc. January 1 Purchased land and an office building for $140.000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes) January 1 Purchased a one-year insurance policy, effective January 1, for $2,400. Purchased office supplies of $3,600 on account from Office Depot January 3 January 5 Established a petty cash fund of $400. January 7 Placed an order with the LA Times newspaper for advertising, which will run during January, February and March. The advertising, which cost $1,800, was paid for on this date in order to obtain a lower price January 10 January 12 Completed consulting job for Brad Pitt, and billed him total of $12,000, due in 30 days. Completed consulting job totaling $18.500 for Beyonce Knowles, and collected $10,000 cash with the balance due in 30 days January 15 Paid the semi-monthly payroll, which totaled $8,000, to the firm's workers, all of which are classified as independent contractors Received $15,000 from Tiger Woods for 6 month's consulting services to begin February 1 January 18 January 19 January 20 Paid Office Depot S2.500 on the account balance Received 58,000 from Brad Pitt for services billed January 10" Completed 55,000 consulting job for Taylor Swift and received full cash payment. Received $4,000 from Beyonce Knowles for consulting services completed January 12 January 24 January 25 January 30 Received the January telephone bill from AT&T for $375, due Feb 15. January 31 January 31 January 31 Paid the payroll to firm's workers for the second half of January Received utility bills for January due Feb 16, from SWEPCO for $360&LA Water Utilities for $280. An audit of the petty cash fund determined the following Receipts Postage $24 Office supplies Mise Exp Currency and Coin Reimburse Petty Cash and record the entry from the information above January 31 Declared & paid cash dividend of S. 10 per Share to the shareholders of record on January 31. SUPPLEMENTAL ADJUSTING ENTRY INFORMATION: a. An inventory of office supplies was taken on January 31 & found that $2,100 of supplies remained on hand. b. An invoice of $280 for repair of office equipment dated January 26 had not yet been recorded. c. The building will be depreciated on a straight-line basis over 30 years with no salvage value. d. The equipment will be depreciated on a straight line basis over 10 years with no salvage value. c. Review accounts for other adjustments necessary at January 31 in addition to those indicated in items a.d. CELEBRITY CONSULTANTS, INC. 100 150 CHART OF ACCOUNTS BALANCE SHEET ACCOUNT NUMBER ACCOUNT NAME Cash 105 Petty Cash 110 Accounts Receivable 120 Office Supplies 130 Prepaid Insurance 135 Prepaid Advertising Office Equipment I55 Accumulated Depreciation, Office Equipment 160) Building I 65 Accumulated Depreciation, Building 190) Land 200 Accounts Payable 220 Uncarned Consulting Revenue 250 Notes Payable 255 Interest Payable 300 Common Stock 350 Retained Earnings 355 Dividends alta hai INCOME STATEMENT ACCOUNT NUMBER ACCOUNT NAME 400 Consulting Revenue 410 Interest Revenue 500 Payroll Expense 502 Advertising Expense 505 Insurance Expense 509 Interest Expense 520 Telephone Expense 535 Utilities Expense 530 Repairs Expense Postage Expense 540] Supplies Expense 550 Depreciation Expense, Office Equipment 560 Depreciation Expense, Building 580 Miscellaneous Expense Cash Over and Short 901 Income Summary 535 590 CELEBRITY CONSULTANTS, INC. GENERAL JOURNAL PAGE ACCOUNT TITLE DOC POST NO. REF. GENERAL DEBIT CREDIT TTTTTTTTTTTT ** | FFFFFFFFFFFFTTTTTTTTTTH" | TTT TTTT ACCOUNTING FORM TEMPLATES General Journal (make copies as needed for recording journal entries) General Ledger (made coples as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC General Ledger ACCOUNT CASH ACCOUNT NO. 100 Date Description Post Ref. Credit Balance IIIIII General Ledger ACCOUNT: PETTY CASH ACCOUNT NO. 105 Date Description POSE Ref. Debit Credit Balance General Ledger ACCOUNT: ACCTS RECEIVABLE ACCOUNT NO 110 Date Description POSL Ref. Debit Credit Balance ACCOUNTING FORM TEMPLATES General Journal (make copies as needed for recording journal entries) General Ledger (made copies as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC General Ledger ACCOUNT ACCOUNT NO Dale Post. Description Debit Balance General Ledger ACCOUNT ACCOUNT NO Description Dobil Credit Balance General Ledger ACCOUNT: ACCOUNT NO Date Description Debit Credit Balance General Ledger ACCOUNT: ACCOUNT NO Description Debit Credit Balance ACCOUNTING FORM TEMPLATES General Journal (make coples as needed for recording journal entries) General Ledger (made coples as needed for setting up all accounts) 10 column worksheet CELEBRITY CONSULTANTS, INC. Worksheet For the month ended January 31 For the month anded lanuary Miented Trial Balance statement Talance Sheet & Statement of Owner's Equity Total Net Income/Loss Total