its an accounting cycle

read the last picture first, then go and read the first pic

Create a T-Account for all accounts listed below. Don't forget to put them in color!!! Karla's Kurvy Kite's Chart of Accounts Ledger # Ledger # 101 102 Account ASSETS Cash Accounts Receivable Inventory Supplies Prepaid Insurance Land Building Accum Depr.- Building Kite Machine Accum Depr. - Kite Machine Account LIABILITIES Accounts Payable Notes Payable Interest Payable Salaries Payable Income Tax Payable 201 202 203 204 103 104 105 106 107 205 108 109 OWNER'S EQUITY Common Stock Retained Earnings Dividends 301 302 304 110 REVENUES Sales Sales Returns & Allowances Sales Discounts 401 402 403 EXPENSES Cost of Goods Sold Salaries Expense Freight-Out Depr. Exp. - Building Utilities Expense Supplies Expense Depr. Exp. - Kite Machine Interest Expense Insurance Expense Income Tax Expense 501 502 503 504 505 506 507 508 509 510 Karla's Kurvy Kite's Transactions January 1: Stockholder's invest $156,050 into the company in exchange for Billy Bob's Bikes common stock 2. January 1: Karla C. bought some land in her hometown for $51,666. January 1: Karla C. purchased a building for $323,575 using $23,575 cash and then borrowing the rest from the bank. The loan from the bank will be paid off over the next 24 years (1124 of the principal will be paid off at the end of each year). The loan carries an interest rate of 8.88%. Interest accrued will be paid off at the end of every year. The building has an expected life of 55 years, a salvage value of $269,455, and will be depreciated using the straight-line method salvage value of sidor at the end of es eur). The loan carries an inte2 years (1249 4. January 1: Karla C. paid in advance for a 10-month insurance policy, which will begin today. She paid $4,680 cash for the policy. January 7: Karla C. purchased 175 kites from Kite's of Bargains. Each kite cost $5.60 and the credit terms are 5/15, n/30. (Note: Kites are considered Inventory) 6. January 8: Kite's of Bargains paid FedEx S27 cash to ship the kites to Karlac 7. January 13: Karla C. purchased $179 worth of supplies from Dirt Cheap Supplies paying cash 8. January 17: Karla C. sold 102 kites to Super Kite's for $22.50 each with credit terms of 2/10, n/30. The total cost of the kites was figured out to be $571. 9. January 18: Karla C. paid UPS $33 cash to ship the kites to Super Kite's. 10. January 21: Karla C. paid off the balance due from Kite's of Bargains. 11. January 24: Super Kite's returned ten of the kites because they were tom. The cost of the kites to Karla C. was figured out to be $56. 12. February 1: Karla C. purchased 757 more kites from Kite's of Bargains. Each kite cost S6 and the credit terms are 5/10 EOM, n/90. 13. February 1: Karla C, paid UPS S54 cash to ship the kites she bought from Kite's of Bargains. 14. February 1: Karla C. bought a Kite Making Machine for $49,500 using $4,500 cash and then borrowing the rest from the bank. The loan will be paid ofl over the next 6 years (1/6 of the principal will be paid at the end of each year). The loan carries an interest rate of 7.20 percent. Interest accrued will be paid off at the end of every year. The Kite Making Machine has an expected life of 10 years, no salvage value and will be depreciated using the straight-line method. 15. February 6: Karla C. retumed 17 of the kites she bought from Kite's of Bargains. They credited $102 to her account. 16. February 12: Super Kite's paid their balance off for the kites they purchased. 17. February 19: Karla C's Day period ends and she salaries will be paid on March 5. wes her employees S656 in salanes. es 18. February 22: Karia's Kurvy Kite's paid cash dividends of S175. 19. February 25: Karla Chires Karl Kiter for promotional purposes. She estimates his salary to be $10/hour. He will probably work 8 hours a week. 20. February 28: Karla C. sold 800 kites to Be Flying Kites for $27 each with credit terms of 3/20, n/60. The cost of the kites was determined to be $4,607. 21. February 28: Big Flying Kites paid FedEx S144 to ship the kites they just bought 22. March 5: Karla C. paid her employees the $656 in salaries owed. 23. March 8: Karla C. paid a utilities bill in the amount of $576. 24. March 9: Karla C. paid off the balance due from Kite's of Bargains. 25. March 15: Big Flying Kites paid their balance off for the kites they purchased. 26. March 22: Karla C. purchased 1,864 kites from Kites R' Us. Each kite cost $6.25 and the credit terms are 1/10 EOM, n/90. 27 March 23: Karla C. paid FedEx S180 to have the kites shipped to her. 28 March 28: Karla C. sells 1,580 kites to The Kite Surplus Store for $31.75 each with credit terms of 3/10, n/30. The cost of the kites was determined to be $10,011. 29. March 29: Karla C. paid FedEx 5202 to ship the kites to The Kite Surplus Store Karla's Adjustments On March 31, you notice the following: a) You have $44 worth of supplies on hand b) You need to recognize depreciation on the building c) You need to recognize interest accumulated on the 2 bank loans (do as one entry) d) You need to recognize insurance used e) You need to recognize depreciation on the kite making machine f) You have accrued salaries of $477 g) You need to recognize/accrue federal income taxes of 25%. Round to the nearest dollar if needed. Hint: compute adjusted income based on all preceding information, and then determine and record income tax expense. The Accounting Cycle 1. Analyze business transactions 2 Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 5. Journalize and post adjusting entries 6. Prepare an adjusted trial balance 7. Prepare the financial statements (L/S, Stmt of RE, B/S) 8. Journalize and post closing entries 9. Prepare a post-closing trial balance Congratulations, you have just been hired by Karla C. to do her accounting work is a strict boss and likes her stuff done right, which is why she only hires bright accounting students (that's why she hired YOU). Please, don't let her down! You will work as her accountant during the first quarter of the year. Karla told you during the interview that her company uses a perpetual inventory system. You are so excited!!! She told you that she would like the following completed: Colored Joumal Entries from steps 2, 5, and 8 of the accounting cycle Colored Ledger Accounts (T-Accounts) from steps 3, 5, and 8 of the accounting cycle A Completed Worksheet in color for steps 4, 5, 6, and 7 of the accounting cycle Colored Financial Statements. This should include a multi-step income statement, a statement of retained earnings, and a classified statement of financial position. A post-closing trial balance in color. Additional things to consider: Karla's Kurvy Kite's prepares adjusting and closing entries, as well as, her financial statements on a quarterly basis. This is her first quarter of operations. Only IT-Account needs to be created for each account. See Chart of Accounts. When doing journal entries, remember that debits come before credits and that both must equal Remember, each time you post to the ledger account, you should put the reference number in your general journal. Assume the year is 2020 for your transactions and financial statements. Do not procrastinate; it will only make things harder on you!! Grading: . This is an individual project, however, you are always encouraged to work with a friend. DO NOT simply copy your friends work, do your own work!! This accounting cycle is worth a total of 90 points. On Wednesday, April 8th you will be required to turn in your project at the start of class. Late Fees turned in late, but during class - 3 points; after class, but before Noon - 10 points; after Noon, but before handed back-20 points. Failure to use color will cost you up to 30 points. This accounting cycle should be organized in the same order that the other accounting cycles were. Failure to organize correctly will cost you up to 20 points. Create a T-Account for all accounts listed below. Don't forget to put them in color!!! Karla's Kurvy Kite's Chart of Accounts Ledger # Ledger # 101 102 Account ASSETS Cash Accounts Receivable Inventory Supplies Prepaid Insurance Land Building Accum Depr.- Building Kite Machine Accum Depr. - Kite Machine Account LIABILITIES Accounts Payable Notes Payable Interest Payable Salaries Payable Income Tax Payable 201 202 203 204 103 104 105 106 107 205 108 109 OWNER'S EQUITY Common Stock Retained Earnings Dividends 301 302 304 110 REVENUES Sales Sales Returns & Allowances Sales Discounts 401 402 403 EXPENSES Cost of Goods Sold Salaries Expense Freight-Out Depr. Exp. - Building Utilities Expense Supplies Expense Depr. Exp. - Kite Machine Interest Expense Insurance Expense Income Tax Expense 501 502 503 504 505 506 507 508 509 510 Karla's Kurvy Kite's Transactions January 1: Stockholder's invest $156,050 into the company in exchange for Billy Bob's Bikes common stock 2. January 1: Karla C. bought some land in her hometown for $51,666. January 1: Karla C. purchased a building for $323,575 using $23,575 cash and then borrowing the rest from the bank. The loan from the bank will be paid off over the next 24 years (1124 of the principal will be paid off at the end of each year). The loan carries an interest rate of 8.88%. Interest accrued will be paid off at the end of every year. The building has an expected life of 55 years, a salvage value of $269,455, and will be depreciated using the straight-line method salvage value of sidor at the end of es eur). The loan carries an inte2 years (1249 4. January 1: Karla C. paid in advance for a 10-month insurance policy, which will begin today. She paid $4,680 cash for the policy. January 7: Karla C. purchased 175 kites from Kite's of Bargains. Each kite cost $5.60 and the credit terms are 5/15, n/30. (Note: Kites are considered Inventory) 6. January 8: Kite's of Bargains paid FedEx S27 cash to ship the kites to Karlac 7. January 13: Karla C. purchased $179 worth of supplies from Dirt Cheap Supplies paying cash 8. January 17: Karla C. sold 102 kites to Super Kite's for $22.50 each with credit terms of 2/10, n/30. The total cost of the kites was figured out to be $571. 9. January 18: Karla C. paid UPS $33 cash to ship the kites to Super Kite's. 10. January 21: Karla C. paid off the balance due from Kite's of Bargains. 11. January 24: Super Kite's returned ten of the kites because they were tom. The cost of the kites to Karla C. was figured out to be $56. 12. February 1: Karla C. purchased 757 more kites from Kite's of Bargains. Each kite cost S6 and the credit terms are 5/10 EOM, n/90. 13. February 1: Karla C, paid UPS S54 cash to ship the kites she bought from Kite's of Bargains. 14. February 1: Karla C. bought a Kite Making Machine for $49,500 using $4,500 cash and then borrowing the rest from the bank. The loan will be paid ofl over the next 6 years (1/6 of the principal will be paid at the end of each year). The loan carries an interest rate of 7.20 percent. Interest accrued will be paid off at the end of every year. The Kite Making Machine has an expected life of 10 years, no salvage value and will be depreciated using the straight-line method. 15. February 6: Karla C. retumed 17 of the kites she bought from Kite's of Bargains. They credited $102 to her account. 16. February 12: Super Kite's paid their balance off for the kites they purchased. 17. February 19: Karla C's Day period ends and she salaries will be paid on March 5. wes her employees S656 in salanes. es 18. February 22: Karia's Kurvy Kite's paid cash dividends of S175. 19. February 25: Karla Chires Karl Kiter for promotional purposes. She estimates his salary to be $10/hour. He will probably work 8 hours a week. 20. February 28: Karla C. sold 800 kites to Be Flying Kites for $27 each with credit terms of 3/20, n/60. The cost of the kites was determined to be $4,607. 21. February 28: Big Flying Kites paid FedEx S144 to ship the kites they just bought 22. March 5: Karla C. paid her employees the $656 in salaries owed. 23. March 8: Karla C. paid a utilities bill in the amount of $576. 24. March 9: Karla C. paid off the balance due from Kite's of Bargains. 25. March 15: Big Flying Kites paid their balance off for the kites they purchased. 26. March 22: Karla C. purchased 1,864 kites from Kites R' Us. Each kite cost $6.25 and the credit terms are 1/10 EOM, n/90. 27 March 23: Karla C. paid FedEx S180 to have the kites shipped to her. 28 March 28: Karla C. sells 1,580 kites to The Kite Surplus Store for $31.75 each with credit terms of 3/10, n/30. The cost of the kites was determined to be $10,011. 29. March 29: Karla C. paid FedEx 5202 to ship the kites to The Kite Surplus Store Karla's Adjustments On March 31, you notice the following: a) You have $44 worth of supplies on hand b) You need to recognize depreciation on the building c) You need to recognize interest accumulated on the 2 bank loans (do as one entry) d) You need to recognize insurance used e) You need to recognize depreciation on the kite making machine f) You have accrued salaries of $477 g) You need to recognize/accrue federal income taxes of 25%. Round to the nearest dollar if needed. Hint: compute adjusted income based on all preceding information, and then determine and record income tax expense. The Accounting Cycle 1. Analyze business transactions 2 Journalize the transactions 3. Post to ledger accounts 4. Prepare a trial balance 5. Journalize and post adjusting entries 6. Prepare an adjusted trial balance 7. Prepare the financial statements (L/S, Stmt of RE, B/S) 8. Journalize and post closing entries 9. Prepare a post-closing trial balance Congratulations, you have just been hired by Karla C. to do her accounting work is a strict boss and likes her stuff done right, which is why she only hires bright accounting students (that's why she hired YOU). Please, don't let her down! You will work as her accountant during the first quarter of the year. Karla told you during the interview that her company uses a perpetual inventory system. You are so excited!!! She told you that she would like the following completed: Colored Joumal Entries from steps 2, 5, and 8 of the accounting cycle Colored Ledger Accounts (T-Accounts) from steps 3, 5, and 8 of the accounting cycle A Completed Worksheet in color for steps 4, 5, 6, and 7 of the accounting cycle Colored Financial Statements. This should include a multi-step income statement, a statement of retained earnings, and a classified statement of financial position. A post-closing trial balance in color. Additional things to consider: Karla's Kurvy Kite's prepares adjusting and closing entries, as well as, her financial statements on a quarterly basis. This is her first quarter of operations. Only IT-Account needs to be created for each account. See Chart of Accounts. When doing journal entries, remember that debits come before credits and that both must equal Remember, each time you post to the ledger account, you should put the reference number in your general journal. Assume the year is 2020 for your transactions and financial statements. Do not procrastinate; it will only make things harder on you!! Grading: . This is an individual project, however, you are always encouraged to work with a friend. DO NOT simply copy your friends work, do your own work!! This accounting cycle is worth a total of 90 points. On Wednesday, April 8th you will be required to turn in your project at the start of class. Late Fees turned in late, but during class - 3 points; after class, but before Noon - 10 points; after Noon, but before handed back-20 points. Failure to use color will cost you up to 30 points. This accounting cycle should be organized in the same order that the other accounting cycles were. Failure to organize correctly will cost you up to 20 points.