Friend's Tire Shop Practice Set Orientation -
Prepare Adjustments, Adjusted Trial Balance, Income Statement and Balance Sheet for Friend's Tire Shop.
The practice set should be started after you have completed Chapter 5 and Exam 1. Please read through this entire paper before you start any work on the practice set. This orientation will give you the steps to get started. Do not get overwhelmed; once you start the actual work in the practice set take it one step, one transaction at a time.
You will be required to take Practice Set Quizzes when you are working on the Practice Set. One Practice Set Quiz per week, five in total. See the calendar in Moodle for specific deadline dates. Each Practice Set Quiz will contain questions which you will answer by using the completed portion of your Practice Set through a specific transaction or step from Booklet A. To complete each quiz, the work through the given transaction/step must be finished, see the calendar in Moodle for specifics. These Practice Set Quizzes are used to keep students on task with the Practice Set and to help you complete it by the end of the semester.
1. Look through the four booklets to familiarize yourself with their contents. Page 2 of each booklet lists the contents of that booklet.
2. In Booklet A, read page A3, Company Information.
3. In Booklet A, read page A4, General Instructions.
4. In Booklet A, review pages A10 through A13. These are the financial statements for the end of the prior month.
5. In Booklet A, read over pages A5 through A9, Steps to Complete the Practice Set. Begin with Step 1, recording the transactions for the month. Each transaction for the month will be recorded in a journal. You will use five types of journals:
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Journal Name
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Type of transaction(s) for the journal
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Sales Journal
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Record all sales of merchandise on account.
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Purchases Journal
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Record all purchases of merchandise for resale.
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Cash Receipts Journal
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Record any money received by the business.
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Cash Payments Journal
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Record any money paid by the business.
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General Journal
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Use the General Journal to record any transaction that does not fit into one of the above journals.
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Transactions start in Booklet A, on page A14. In Booklet A, Step 1, you will find information to help you record each transaction in the proper place, and complete all of the steps necessary to record each transaction properly. If you follow these steps you will never run out of room in any journal, ledger, or form. If you ever run out of room STOP go back and review the Steps to Complete the Practice Set instructions.
Also, all transactions that involve a discount will tell you either "Less the Discount" which means you should take the discount on any or all of the invoices included within that transaction OR "they missed the discount period" which means do not take the discount on any or all of the invoices included within that transaction.
When entering transactions into the Cash Receipts Journal - The information recorded in the Account Credited column is as follows:
If you enter an amount into the Accounts Receivable Cr column you would write the name of the customer you received the money from.
If you enter an amount into the Other Accounts Cr column you would write the name of the general ledger account the transaction affects.
When entering transactions into the Cash Payments Journal - The information recorded in the Account Debited column is as follows:
If you enter an amount into the Accounts Payable Dr column you would write the name of the customer you paid.
If you enter an amount into the Other Accounts Dr column you would write the name of the general ledger account the transaction affects.
Everyone makes errors, so PLEASE only work in pencil in your practice set.
At the end of each week you are given a check figure for your Check Register Balance. If your check register amount does not agree with the amount given to you STOP - DO NOT continue on until your check register balance agrees. Steps to try if your balance does not agree:
- Redo the math in your check register for the section where your error lies.
- Go back through the transactions and be sure of the amounts you recorded in your check register. Double check discounts, and that you recorded all checks in the check column and deposits in the deposit column.
- If your balance is off by an amount that is evenly divisible by 9, check for a transposition in your numbers.
6. When Booklet A, Step 1 is completed, continue on with page A7, Step 2 and so forth until you have completed all 11 steps.
7. Extra Instructions for Step2, Posting:
- In the General Ledger, nothing is ever written in the Explanation column.
- The Debit and Credit columns are never totaled; a running balance is kept in each account.
- You will never run out of room in any account when you are posting. If you do, STOP, go back and re-read the posting instructions given in step 2.
8. Extra Instructions for step 4, Bank Reconciliation:
Be sure to update your check register so the ending balance there agrees with the bank reconciliation balance.
9. Extra Instructions for step 6, Worksheet:
In the link titled Worksheet Trial Balance I am giving you the correct trial balance figures for the worksheet. You should prepare the trial balance columns on the worksheet using your figures first and then compare your figures to the numbers I have given you. Make corrections as necessary to the trial balance, journals, and general ledger. If there are multiple errors on your part use the numbers I have given you to complete the practice set and then go back to make the necessary changes if time allows. Errors that are not corrected could affect your overall practice set score.
10. For step 8, examples of journalizing and posting adjusting entries can be found on pages 109-110 of your textbook. 12th Edition.
11. For step 9, examples of closing entries can be found on pages 220 and 221 of your textbook.
12. For step 10, example of a post-closing trail balance can be found on page 163 of your textbook. 12th Edition.
Attachment:- Assignment Files.rar