Overview - Background information
Assume it is currently June 30, 20XX.
You are working for the temporary accounting employment agency known as Tempters. Today you have been asked to work at Moondollars, a small coffee supplies store that operates in the city and is owned by Adrian Bartos. Your task here is to complete the accounting cycle for Moondollars for the month of June 20XX. To assist you in this task, Adrian tells you to read the company's accounting policies and procedures. Note that you will be required to follow these policies and procedures when completing the accounts for Moondollars.
Instructions
Now that you have reviewed information about Moondollars, you are ready to complete the accounting cycle for Moondollars for the month of June. To start with, Adrian gives you the transaction list for the month of June and all the journals, ledgers and final statements you will need to complete this task. He also mentions that you will be required to record reversing entries at the beginning of July.
Adrian provides the following list of tasks you are required to perform for June and the beginning of July:
1. Transactions
a. Record all transactions in the relevant journals. Note that special journals must be used where applicable. Any transaction that cannot be recorded in a special journal should be recorded in the general journal.
b. Post entries recorded in the journals to the appropriate ledger accounts according to the company's accounting policies and procedures.
Remember to enter all answers to the nearest whole dollar. When calculating a discount, if a discount is not a whole number, round the discount to the nearest whole dollar. Then, to calculate the Cash amount, subtract the discount from the original amount.
2. End of month posting
a. Total the columns in the special journals.
b. Post the totals of the columns in the special journals to their corresponding ledger accounts. To confirm that the posting has been performed, a posting reference is recorded in the last row of the special journals. If the total of a column is not required to be posted (because the entries in that column have already been posted on a daily basis) you need to record an X in the post reference field for that column.
3. Bank reconciliation
a. Prepare the bank reconciliation statement as at June 30.
b. Identify and record the relevant reconciling items in the general journal, and post them to the relevant accounts.
4. Unadjusted trial balance
Complete the unadjusted trial balance as at June 30 on the worksheet provided.
5. Worksheet
a. Use the following information to record adjustments in the Adjustments column of the worksheet:
- furniture: Depreciation on the furniture owned by the business for the month of June is $156.
- equipment: Depreciation on the equipment owned by the business for the month of June is $366.
- Electricity expense for the month of June is estimated to be $874.
- The water usage for the month of June is estimated to be $235.
- The amount of wages incurred during the month of June but not yet paid to sales staff is $1,320.
- Interest expense incurred during the month of June but not yet paid to MRMC Bank for the bank loan is $275.
- Interest earned from short-term investments in BitiBank for the month of June is $100.
- The value of office supplies used during the month of June is $4,037.
- $3,000 worth of prepaid rent expired during the month of June.
- $3,000 worth of prepaid advertising was used up in June.
- $590 worth of prepaid insurance expired during the month of June.
b. Complete the remaining columns of the worksheet. After taking a physical count of inventory, the balance of inventory on hand as at June 30 is $60,857. You will need to use this information to complete both the Income Statement and the Balance Sheet columns of the worksheet. Note that Merchandise Inventory is recorded in the Income Statement columns. Hint: This information will assist you in calculating cost of goods sold under the periodic inventory system.
6. Adjusting entries
Use the worksheet to help journalize adjustments for June.
a. Record adjusting entries in the general journal.
b. Post the adjusting entries from the general journal to the relevant ledgers.
7. Schedules of accounts
a. Create a schedule of accounts receivable balances as at the end of June.
b. Create a schedule of accounts payable balances as at the end of June.
8. Financial statements
a. Prepare an income statement for the month of June.
b. Prepare a statement of stockholders' equity for the month of June.
c. Prepare a balance sheet as at the end of June.
9. Closing entries
a. Journalise closing entries in the general journal.
b. Post the closing entries from the general journal to the relevant ledger accounts.
10. Post-closing trial balance
Prepare a post-closing trial balance as at the end of June.
11. Reversing entries
a. On the first day of July, record in the general journal any entries that are required to reverse the following adjusting entries from the month of June:
- Water expense incurred but not paid
- Electricity expense incurred but not paid
- Wages owed to the employees but have not yet been paid in cash
- Interest expense incurred but not paid to the lender
- Interest earned but not received in cash
b. Post the reversing entries from the general journal to the relevant general ledger accounts.
Attachment:- Assignment.rar