1: Venture Consultants, Power and Demolition Company, and Warnerwood Accounting Cases
Complete all three accounting cases: Venture Consultants, Power and Demolition Company, and Warnerwood. You will then present Parts 1, 2, and 3 of the Portfolio Project in Excel as journal entries, following the exact instructions that accompany each part.
Part 1:
Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March:
March 1: Brooks invested $150,000 cash along with $22,000 of office equipment in the company.
March 2: Venture Consultants pre-paid $6,000 cash or six months' rent for their office.
March 3: Venture Consultants made credit purchases for office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.
March 6: Venture Consultants completed services for a client and immediately received $4,000 cash.
March 9: Venture Consultants completed a $7,500 project for a client who must pay within 30 days.
March 12: Venture Consultants paid $4,200 cash to settle the account payable created on March 3.
March 19: Venture Consultants paid a $5,000 cash premium on a 12-month insurance policy.
March 22: Venture Consultants received $3,500 cash as a partial payment for the work completed on March 9.
March 25: Venture Consultants completed work for another client for $3,820 on credit.
March 29: Brooks withdrew $5,100 cash from the company for personal use.
March 30: Venture Consultants purchased $600 of additional office supplies on credit.
March 31: Venture Consultants paid $500 cash for this month's utility bill.
Instructions:
Prepare journals for the above economic transactions. Use the file called "Assignment Template" in the assignment section for Part #1, Venture Capital Consultants. Enter your journals to the general ledger using the same file name.
Part 2:
The following unadjusted trial balance is for Power and Demolition Company as of year-end for the April 30, 2015 fiscal year. The April 30, 2015 credit balance of the owner's equity account is $46,900, and the owner invested $40,000 cash in the company during 2015.
|
NO.
|
Account Title
|
Debit
|
Credit
|
|
101
|
Cash
|
$7,000
|
|
|
126
|
Supplies
|
$16,000
|
|
|
128
|
Pre-paid insurance
|
$12,600
|
|
|
167
|
Equipment
|
$200,000
|
|
|
168
|
Accumulated depreciation - equipment
|
|
$14,000
|
|
201
|
Accounts payable
|
|
$6,800
|
|
251
|
Long-term notes payable
|
|
$30,000
|
|
301
|
Bonn, equity
|
|
$86,900
|
|
302
|
Bonn, withdrawals
|
$12,000
|
|
|
401
|
Demolition fees earned
|
|
$187,000
|
|
623
|
Wage expense
|
$41,400
|
|
|
633
|
Interest expense
|
$3,300
|
|
|
640
|
Rent expense
|
$13,200
|
|
|
683
|
Property tax expense
|
$9,700
|
|
|
684
|
Repairs expense
|
$4,700
|
|
|
690
|
Utilities expense
|
$4,800
|
|
|
|
|
|
|
|
|
TOTALS
|
$324,700
|
$324,700
|
Instructions:
a) Journalize the following adjusting entries as of fiscal year-end April 30, 2015.
b) Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
c) Create financial statements.
- The supplies available at the end of fiscal 2015 year are at a cost of $7,900.
- The cost of expired insurance for the fiscal year is $10,600.
- Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 2015.
- The April utilities expense of $800 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded..
- The company's employees have earned $2000 of accrued wages in the fiscal year.
- The rent expense not yet paid or recorded in the fiscal year is $3000.
- Additional property taxes of $550 have been assessed for the fiscal year, but have not yet been paid or recorded in the accounts.
- The $300 accrued interest for April has not yet been paid and reported.
Part 3:
The Warnerwood Company uses a perpetual inventory system. It entered the following purchases and sales transactions for March into the system:
|
Date
|
Activities
|
Units Acquiredat Cost
|
Costper Unit
|
Units Sold at Retail
|
Priceper unit
|
|
March 1
|
Beginning inventory
|
100 units
|
$50
|
|
|
|
March 5
|
Purchase
|
400 units
|
$55
|
|
|
|
March 9
|
Sales
|
|
|
420
|
$85
|
|
March 18
|
Purchase
|
120 units
|
$60
|
|
|
|
March 25
|
Purchase
|
200 units
|
$62
|
|
|
|
March 29
|
Sales
|
|
|
160 units
|
$95
|
|
|
Totals
|
820 units
|
|
580 units
|
|
Instructions:
Show all of your work in an Excel spreadsheet for the following tasks:
- Compute the number of units available for sale.
- Compute the number of units in ending inventory.
- Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, and (c) weighted average. (Round the average cost per unit to 2 decimal places.)
- Compute the gross profit earned by the company for each of the three costing methods. (Round the average cost per unit to 2 decimal places.)