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Each of these steps is explained in detail in Chapters 1-4 of our textbook. Step 1, Analyze transactions, is covered in Chapter 1. While this step is very important, it is a thought process, the results of which do not materialize into any written action until Step 2, Journalize. Therefore, we will begin this packet with Step 2 in our quest to complete the first full accounting cycle for Blue Raider Adventure Park. The remaining pages of this packet guide you through this process to enhance your understanding of the complete accounting cycle as it relates to one business venture. This is a serial problem that will be completed over the span of three chapters - chapters 2, 3, and 4. Note that we provide "Helpful Hints" for each accounting cycle step based on our experience teaching this material to introductory accounting students. Several of these "Helpful Hints" include check figures which effectively allow you to a great extent, to check your work for accuracy. In the event that your work does not reconcile with the check figure(s) provided, our expectation is that you will seek assistance, exhausting all available resources (including the Accounting Lab tutors (N428) and your professor), to correct your work before coming to class. 2 Account Number 101 106 126 128 163 164 165 166 167 168 Account Title Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation - Equipment Sign Accumulated Depreciation - Sign Activity Courses Accumulated Depreciation - Activity Courses Accounts Payable Wages Payable Unearned Revenue Interest Payable Notes Payable M. Lapinski, Capital M. Lapinski, Withdrawals Ticket Revenue Advertising Expense Depreciation Expense Insurance Expense Interest Expense Mowing Expense 201 210 236 240 275 301 302 403 612 625 632 640 653 166 167 168 201 210 236 240 275 301 Accumulated Depreciation - Sign Activity Courses Accumulated Depreciation Activity Courses Accounts Payable Wages Payable Unearned Revenue Interest Payable Notes Payable M. Lapinski, Capital M. Lapinski, Withdrawals Ticket Revenue Advertising Expense Depreciation Expense Insurance Expense Interest Expense Mowing Expense Supplies Expense Wages Expense Income Summary 302 403 612 625 632 640 653 670 682 999 Helpful Hints ACCOUNTING CYCLE STEP 2: Journalize each of the follow transactions in the general journal; you may omit explanations. Use the general journal working papers in your packet! August 1 Matt opens a business checking account in the name of BRAP and makes an initial deposit of $5,000. Matt had previously withdrawn this $5,000 from his personal savings account. August 1 Matt is unable to borrow money from the local bank given his youth, lack of business experience, and lack of a substantial credit history. However, his grandfather fully supports Matt's efforts to become an entrepreneur, so he loans Matt $7,000 at 6% interest to be repaid in two years. Matt deposits these funds into the BRAP checking account. August 7 Matt goes to Play It Again Sports and pays $1,925 to purchase gently used canoes, paddles, lifejackets, ziplining harnesses, etc. to be used the park. (These items will collectively be identified as "Equipment" in the accounting records.) August 15 Matt purchases a large, attractive sign for the new park at a cost of $750. The sign maker knows Matt's family, so she agrees to extend credit to BRAP for 30 days. August 20 BRAP pays $300 to create, print, and distribute flyers to all the local schools and youth organizations to advertise that the new park will open on September 1. August 28 BRAP pays a total of $5,620 to have the child-appropriate obstacle and zipline courses constructed that same day, inspection and certification are included in these amounts. (These two courses will collectively be identified as "Activity Courses in the accounting records.) September 1 Matt recognizes the fact that he could be sued if a child gets hurt in the park, so BRAP pays $615 to purchase 3 months of general liability insurance for coverage from September 1 through November 30. September 7 Matt establishes a 30-day credit account at a local business on behalf of BRAP. He immediately uses the account to purchase $460 in various supplies for the park. September 10 BRAP sells 60 tickets for $15 each to local school children for admission to the park on that same day. (All ticket sales by BRAP are cash sales unless otherwise noted.) September 14 BRAP pays for the sign purchased on August 15. September 17 The Boys and Girls Club of Rutherford County brings 80 disadvantaged children to BRAP. Matt agrees to accept a reduced price of $12.00 per ticket and wait 30 days to receive payment, which will be paid Foc thhh September 1 Matt recognizes the fact that he could be sued if a child gets hurt in the park, so BRAP pays $615 to purchase 3 months of general liability insurance for coverage from September 1 through November 30. September 7 Matt establishes a 30-day credit account at a local business on behalf of BRAP. He immediately uses the account to purchase $460 in various supplies for the park. September 10 BRAP sells 60 tickets for $15 each to local school children for admission to the park on that same day. (All ticket sales by BRAP are cash sales unless otherwise noted.) September 14 BRAP pays for the sign purchased on August 15. September 17 The Boys and Girls Club of Rutherford County brings 80 disadvantaged children to BRAP. Matt agrees to accept a reduced price of $12.00 per ticket and wait 30 days to receive payment, which will be paid by the Club rather than by the children. September 18 BRAP pays $75 to have the grass mowed at the park. September 22 BRAP sells 45 tickets for $15 each for children in two local Boy Scout troops for admission to the park on that same day. September 24 BRAP receives a check from the Boys and Girls Club of Rutherford County in the amount of $450 to partially pay for the tickets purchased on September 17. September 25 BRAP pays wages in the amount of $365 to two of Matt's friends who worked on days when children were in the park to assist the children with the various activities. September 28 Matt is satisfied that BRAP has more than a sufficient amount of operating cash in its checking account, so he writes himself a company check for $800 and deposits it into his own personal checking account. September 30 BRAP receives a check in the amount of $345 from Ms. Hughes, a local teacher, to purchase tickets for her 2nd graders. She plans to bring them to BRAP for a field trip on October 3. Chapter 3 (Accounting Cycle Steps 5, 6, & 7) $ ACCOUNTING CYCLE STEP 5: Adjust the appropriate accounts of BRAP based on the following information. This step involves journalizing the adjusting entries in the general journal and posting them to the general ledger, using the cross-reference procedure described in accounting cycle step 3. (Note: Add these transactions to the general journal and general ledger that you began in the Chapter 2 section of this packet.) September 30 One month of the general liability insurance coverage that began on September 1 has now expired. September 30 Accrue interest on the $7,000, 6% loan issued on August 1 even though payment on the principal and interest will not be made until the note matures in two years. (Round to the nearest dollar, if necessary.) September 30 Matt determined that $182 of the supplies purchased on September 7 remained unused. September 30 You consult with a fellow student who has already completed ACTG 2110, and he helps you calculate depreciation as follows: Equipment - $32: Sign - $13, and Activity Courses - $94. (Note: use separate Accumulated Depreciation accounts for each asset, but report the total amount of Depreciation Expense in a single account.) September 30 Accrue wages of $120. The employees earned these wages in September, but will not be paid until October Helpful Hints Chapter 4 (Accounting Cycle Steps 8 & 9) ACCOUNTING CYCLE STEP 8: Prepare journal entries to close all the temporary accounts. This step includes journalizing the closing entries in the general journal and posting them to the appropriate general ledger accounts, using the cross-reference procedure described in Step 3. Use the same general journal and general ledger that you used in the previous steps. Helpful Hints: The temporary accounts to be closed are the revenue accounts, expense accounts, and the owner's withdrawal (a.k.a. drawing) account. Note that the owner's capital account before the closing process does not equal the ending owner's capital we reported on the statement of owner's equity and on the balance sheet. The closing process, when properly completed, will update the owner's capital account balance in the general ledger so that it reconciles with the ending owner's equity balance we reported on the financial statements. The closing process will also reduce all temporary accounts to a zero balance clearing the way for the accumulation of revenues, expenses, and withdrawals for the next accounting period. Revenue accounts must be DEBITED to remove their credit balances and expense accounts and the owner's withdrawal account must be CREDITED to remove their debit balances. * ACCOUNTING CYCLE STEP 9: Prepare a post-closing trial balance. Just like the unadjusted trial balance and the adjusted trial balance, this trial balance is simply a listing of the general ledger accounts and their balances in financial statement order with the debit and credit columns summed. - pare your solution electronically, be sure to bring a hardcopy to class Helpful Hints: This trial balance confirms that general ledger debits and credits are equal before beginning a new accounting cycle. Given that all the temporary account balances were reduced to zero during the closing process, the temporary accounts may be omitted from this trial balance. Check Figure: Debits and Credits must each equal $13,317. ACCOUNTING CYCLE STEP 10: Preparing reversing entries is an optional step in the accounting cycle that will not be covered in this course. Account Supplies Date Item Post. Debit Ref Credit Balance Credit Debit 1 Account Prepaid Insurance 53 Date Item Post Ref Debit Credit 55 56 Debit Balance Credit 57 General Journal General Ledger Each of these steps is explained in detail in Chapters 1-4 of our textbook. Step 1, Analyze transactions, is covered in Chapter 1. While this step is very important, it is a thought process, the results of which do not materialize into any written action until Step 2, Journalize. Therefore, we will begin this packet with Step 2 in our quest to complete the first full accounting cycle for Blue Raider Adventure Park. The remaining pages of this packet guide you through this process to enhance your understanding of the complete accounting cycle as it relates to one business venture. This is a serial problem that will be completed over the span of three chapters - chapters 2, 3, and 4. Note that we provide "Helpful Hints" for each accounting cycle step based on our experience teaching this material to introductory accounting students. Several of these "Helpful Hints" include check figures which effectively allow you to a great extent, to check your work for accuracy. In the event that your work does not reconcile with the check figure(s) provided, our expectation is that you will seek assistance, exhausting all available resources (including the Accounting Lab tutors (N428) and your professor), to correct your work before coming to class. 2 Account Number 101 106 126 128 163 164 165 166 167 168 Account Title Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation - Equipment Sign Accumulated Depreciation - Sign Activity Courses Accumulated Depreciation - Activity Courses Accounts Payable Wages Payable Unearned Revenue Interest Payable Notes Payable M. Lapinski, Capital M. Lapinski, Withdrawals Ticket Revenue Advertising Expense Depreciation Expense Insurance Expense Interest Expense Mowing Expense 201 210 236 240 275 301 302 403 612 625 632 640 653 166 167 168 201 210 236 240 275 301 Accumulated Depreciation - Sign Activity Courses Accumulated Depreciation Activity Courses Accounts Payable Wages Payable Unearned Revenue Interest Payable Notes Payable M. Lapinski, Capital M. Lapinski, Withdrawals Ticket Revenue Advertising Expense Depreciation Expense Insurance Expense Interest Expense Mowing Expense Supplies Expense Wages Expense Income Summary 302 403 612 625 632 640 653 670 682 999 Helpful Hints ACCOUNTING CYCLE STEP 2: Journalize each of the follow transactions in the general journal; you may omit explanations. Use the general journal working papers in your packet! August 1 Matt opens a business checking account in the name of BRAP and makes an initial deposit of $5,000. Matt had previously withdrawn this $5,000 from his personal savings account. August 1 Matt is unable to borrow money from the local bank given his youth, lack of business experience, and lack of a substantial credit history. However, his grandfather fully supports Matt's efforts to become an entrepreneur, so he loans Matt $7,000 at 6% interest to be repaid in two years. Matt deposits these funds into the BRAP checking account. August 7 Matt goes to Play It Again Sports and pays $1,925 to purchase gently used canoes, paddles, lifejackets, ziplining harnesses, etc. to be used the park. (These items will collectively be identified as "Equipment" in the accounting records.) August 15 Matt purchases a large, attractive sign for the new park at a cost of $750. The sign maker knows Matt's family, so she agrees to extend credit to BRAP for 30 days. August 20 BRAP pays $300 to create, print, and distribute flyers to all the local schools and youth organizations to advertise that the new park will open on September 1. August 28 BRAP pays a total of $5,620 to have the child-appropriate obstacle and zipline courses constructed that same day, inspection and certification are included in these amounts. (These two courses will collectively be identified as "Activity Courses in the accounting records.) September 1 Matt recognizes the fact that he could be sued if a child gets hurt in the park, so BRAP pays $615 to purchase 3 months of general liability insurance for coverage from September 1 through November 30. September 7 Matt establishes a 30-day credit account at a local business on behalf of BRAP. He immediately uses the account to purchase $460 in various supplies for the park. September 10 BRAP sells 60 tickets for $15 each to local school children for admission to the park on that same day. (All ticket sales by BRAP are cash sales unless otherwise noted.) September 14 BRAP pays for the sign purchased on August 15. September 17 The Boys and Girls Club of Rutherford County brings 80 disadvantaged children to BRAP. Matt agrees to accept a reduced price of $12.00 per ticket and wait 30 days to receive payment, which will be paid Foc thhh September 1 Matt recognizes the fact that he could be sued if a child gets hurt in the park, so BRAP pays $615 to purchase 3 months of general liability insurance for coverage from September 1 through November 30. September 7 Matt establishes a 30-day credit account at a local business on behalf of BRAP. He immediately uses the account to purchase $460 in various supplies for the park. September 10 BRAP sells 60 tickets for $15 each to local school children for admission to the park on that same day. (All ticket sales by BRAP are cash sales unless otherwise noted.) September 14 BRAP pays for the sign purchased on August 15. September 17 The Boys and Girls Club of Rutherford County brings 80 disadvantaged children to BRAP. Matt agrees to accept a reduced price of $12.00 per ticket and wait 30 days to receive payment, which will be paid by the Club rather than by the children. September 18 BRAP pays $75 to have the grass mowed at the park. September 22 BRAP sells 45 tickets for $15 each for children in two local Boy Scout troops for admission to the park on that same day. September 24 BRAP receives a check from the Boys and Girls Club of Rutherford County in the amount of $450 to partially pay for the tickets purchased on September 17. September 25 BRAP pays wages in the amount of $365 to two of Matt's friends who worked on days when children were in the park to assist the children with the various activities. September 28 Matt is satisfied that BRAP has more than a sufficient amount of operating cash in its checking account, so he writes himself a company check for $800 and deposits it into his own personal checking account. September 30 BRAP receives a check in the amount of $345 from Ms. Hughes, a local teacher, to purchase tickets for her 2nd graders. She plans to bring them to BRAP for a field trip on October 3. Chapter 3 (Accounting Cycle Steps 5, 6, & 7) $ ACCOUNTING CYCLE STEP 5: Adjust the appropriate accounts of BRAP based on the following information. This step involves journalizing the adjusting entries in the general journal and posting them to the general ledger, using the cross-reference procedure described in accounting cycle step 3. (Note: Add these transactions to the general journal and general ledger that you began in the Chapter 2 section of this packet.) September 30 One month of the general liability insurance coverage that began on September 1 has now expired. September 30 Accrue interest on the $7,000, 6% loan issued on August 1 even though payment on the principal and interest will not be made until the note matures in two years. (Round to the nearest dollar, if necessary.) September 30 Matt determined that $182 of the supplies purchased on September 7 remained unused. September 30 You consult with a fellow student who has already completed ACTG 2110, and he helps you calculate depreciation as follows: Equipment - $32: Sign - $13, and Activity Courses - $94. (Note: use separate Accumulated Depreciation accounts for each asset, but report the total amount of Depreciation Expense in a single account.) September 30 Accrue wages of $120. The employees earned these wages in September, but will not be paid until October Helpful Hints Chapter 4 (Accounting Cycle Steps 8 & 9) ACCOUNTING CYCLE STEP 8: Prepare journal entries to close all the temporary accounts. This step includes journalizing the closing entries in the general journal and posting them to the appropriate general ledger accounts, using the cross-reference procedure described in Step 3. Use the same general journal and general ledger that you used in the previous steps. Helpful Hints: The temporary accounts to be closed are the revenue accounts, expense accounts, and the owner's withdrawal (a.k.a. drawing) account. Note that the owner's capital account before the closing process does not equal the ending owner's capital we reported on the statement of owner's equity and on the balance sheet. The closing process, when properly completed, will update the owner's capital account balance in the general ledger so that it reconciles with the ending owner's equity balance we reported on the financial statements. The closing process will also reduce all temporary accounts to a zero balance clearing the way for the accumulation of revenues, expenses, and withdrawals for the next accounting period. Revenue accounts must be DEBITED to remove their credit balances and expense accounts and the owner's withdrawal account must be CREDITED to remove their debit balances. * ACCOUNTING CYCLE STEP 9: Prepare a post-closing trial balance. Just like the unadjusted trial balance and the adjusted trial balance, this trial balance is simply a listing of the general ledger accounts and their balances in financial statement order with the debit and credit columns summed. - pare your solution electronically, be sure to bring a hardcopy to class Helpful Hints: This trial balance confirms that general ledger debits and credits are equal before beginning a new accounting cycle. Given that all the temporary account balances were reduced to zero during the closing process, the temporary accounts may be omitted from this trial balance. Check Figure: Debits and Credits must each equal $13,317. ACCOUNTING CYCLE STEP 10: Preparing reversing entries is an optional step in the accounting cycle that will not be covered in this course. Account Supplies Date Item Post. Debit Ref Credit Balance Credit Debit 1 Account Prepaid Insurance 53 Date Item Post Ref Debit Credit 55 56 Debit Balance Credit 57 General Journal General Ledger

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