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General JournalDateAccount Titles RefDebitCredit.docx
- 12. GENERAL LEDGER
- 17. OFFICE SUPPLIES No. 103 Date Explanation Ref Debit Credit Balance 2015
- 24. UNEARNED SERVICE REVENUE No. 202 Date Explanation Ref Debit Credit Balance 2015
- 25. WAGES PAYABLE No. 203 Date Explanation Ref
- 27. INTEREST PAYABLE No. 210 Date Explanation Ref Debit Credit Balance 2015
- 28. NOTES PAYABLE No. 220 Date Explanation Ref Debit Credit Balance 2015
- 29. CAPITAL STOCK No. 301 Date Explanation Ref Debit Credit Balance 2015
- 30. RETAINED EARNINGS No. 310 Date Explanation Ref Debit Credit Balance 2015
- 32. SERVICE REVENUE No. 401 Date Explanation Ref Debit Credit Balance 2015
- 33. WAGE EXPENSE No. 501 Date Explanation Ref Debit Credit Balance
- 34. 2015
- 35. UTILITIES EXPENSE No. 502 Date Explanation Ref Debit Credit Balance 2015
- 36. INSURANCE EXPENSE No. 505 Date Explanation Ref Debit Credit Balance 2015
- 37. SUPPLIES EXPENSE No. 506 Date Explanation Ref Debit Credit Balance 2015
- 39. INTEREST EXPENSE No. 520 Date Explanation Ref Debit Credit
- 40. Balance 2015
- 41. Herman and Sons Law Offices Unadjusted Trial Balance At December 31, 2015 Account Debit Credit
- 43. Totals Herman and Sons Law Offices Adjusted Trial Balance At December 31, 2015 Account Debit Credit
- 45. Totals
- 46. Herman and Sons’ Law Offices Statement of Income For the year ended December 31, 2015 Revenues: Expenses:
- 47. Net Income Herman and Sons’ Law Offices Statement of Changes in Stockholders’ Equity For the year ended December 31, 2015 Capital Stock Retained Earnings Total Equity Balance, January 1
- 48. Balance, December 31 Herman and Sons’ Law Offices Balance Sheet As of December 31, 2015 ASSETS: TOTAL ASSETS
- 49. LIABILITIES AND EQUITY: Total liabilities Equity: Total Equity TOTAL LIABILITIES AND EQUITY
- 50. Herman and Sons’ Law Offices Statement of Cash Flows For the year ended December 31, 2015 Operating Activities: Cash flow from operating activities Investing Activities:
- 51. Cash flow from investing activities Financing Activities: Cash flow from financing activities Change in cash for the year Beginning cash balance Ending cash balance
- 52. Herman and Sons Law Offices Post-Closing Trial Balance At December 31, 2015 Account Debit Credit
- 53. Totals
- 54. Intermediate Accounting Accounting Cycle Project You have been engaged to perform accounting services for Herman and Sons’ Law Offices. Your responsibilities include maintaining all accounting records and preparing annual financial statements. Herman and Sons’ opened on January 1, 2015. During the year, the firm had the following transactions: 1. January 2: The owners invested $325,000 into the business and acquired 25,000 shares of capital stock in return. 2. January 15: Herman and Sons’ took out a note for $100,000 from the bank to finance the purchase of an office building. 3. January 15: Herman and Sons’ bought an office building in the amount of $100,000. 4. February 12: Herman and Sons’ billed clients for $120,000 of services performed. 5. March 1: Herman and Sons’ took out a two-year insurance policy, which it paid cash for in the amount of $16,000. 6. March 10: Herman collected $20,000 from clients toward the outstanding accounts receivable balance. 7. May 13: Herman received cash payments totaling $175,000 for legal services—$70,000 was for services previously billed to customers on February 12 and the remainder was for services provided in May not yet recorded. 8. June 10: Herman purchased office supplies in the amount of $35,000, all of which it paid on credit account with the supplier. 9. July 15: Herman paid wages of $50,000 in cash to office staff workers. 10. August 8: Herman paid the $15,000 owed to a supplier for the purchase made on June 10. 11. September 3: Herman and Sons’ purchased $25,000 of office supplies in cash. 12. September 20: The company paid $9,000 cash for utilities. 13. October 1: Herman and Sons’ paid wages in the amount of
- 55. $38,000 to office workers. 14. December 1: Herman and Sons’ received cash payments from clients in the amount of $200,000 for services to be performed in the upcoming months. 15. December 31: Herman declared and paid a $8,000 dividend. Your first step is to analyze each transaction during Herman and Sons’ first year of business and enter them into the accounting system. Specifically, you first perform the following tasks. a. Journalize the transactions for the year. b. Post the transactions to the general ledger. c. Prepare an unadjusted trial balance as of December 31. Next, you begin to prepare the annual financial statements. Before preparing the statements, you identify the following additional information. · Of the cash payments received from customers on December 1, 30% of these services were performed in December and half relates to future services to be rendered in the following year. · Ten months of the insurance policy expired by the end of the year. · Depreciation for the full year should be recorded on the building purchased. The building has a 30-year life and no residual value. Depreciation will be recorded on a straight-line basis. · A total of $10,000 of supplies remains on hand at the end of the year. · Interest expense in the amount of $6,000 should be accrued on the note payable. · Wages in the amount of $25,000 must be accrued at year end to be paid in January. Using this additional information, you are able to make required
- 56. adjusting journal entries, prepare the financial statements and close the books for the year. To accomplish these tasks, you must perform the following: d. Journalize adjusting journal entries for Herman and Sons’. e. Post adjusting journal entries. f. Prepare an adjusted trial balance as of December 31. g. Prepare the financial statements including: - single-step income statement, - a statement of changes in shareholders’ equity, - a balance sheet, and - a statement of cash flows. h. Journalize and post the necessary closing entries at year- end. i. Prepare a post-closing trial balance as of December 31, 2015. You prepare the following chart of accounts for Herman and Sons’ Law Offices: Chart of Accounts Group Account # Account Title 100: Assets 101 Cash
- 57. 102 Accounts receivable 103 Office supplies 104 Prepaid insurance 110 Building 112 Accumulated depreciation - building 200: Liabilities 201 Accounts payable 202 Unearned service revenue 203 Wages payable 210 Interest payable 220 Notes payable
- 58. 300: Equity 301 Capital stock 310 Retained earnings 320 Dividends declared 400: Revenues 401 Service revenue 500: Expenses 501 Wage expense 502 Utilities expense
- 59. 503 Selling expense 504 Administrative expense 505 Insurance expense 506 Supplies expense 510 Depreciation expense 520 Interest expense 600: Other 601 Income summary Prepared by Dr. Elizabeth A. Gordon