ACC 201 Final Project Peyton Approved Instructions
For this deliverable, you will complete the accounting cycle and prepare financial statements that will provide the result you need to assess the success of business operations.
Below you will find the data required to make entries in your accounting workbook. Remember that you are following the business transactions for a three-month period from the initial stage of analysis and recording, through the reporting process. These transactions will include:
* the initial setup of the business
* cash and credit sales
* making payments to vendors
* paying store employees
* managing debt
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July 1-Purchase $8500 in baking supplies from vendor, on account
July 3 – Your parents lend the company $10,000 cash, in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.
July 7 – Pay $3000 toward lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, last month’s rent was required at time of lease agreement. Lease period is effective July 1st 2014 through June 30th, 2015.
July 10 – Pay $375 to the county for a business license.
July 11 – Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).
July 13 – You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in the bakery. You estimate that the equipment is currently worth $5,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.
July 13 – Pay $200 for business cards/flyers/posters/ads to use for advertising.
July 14 – Pay $300 for miscellaneous (use misc. supplies).
July 15 – Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry required on this date; for informational purposes only)
July 30- Received telephone bill for July in amount of $45. Payment is due on August 10th
July 31 – Pay $1,200 for a 12-month insurance policy. Policy effective dates August 1, 2014 through July 31st, 2015
July 31- Accrue wages earned for employee for period of 16th through 31st of July
(Wage calculations table is provided for you, below)
Total July bakery sales were $15,000. $5000 of these sales on accounts receivable
Complete the following transactions in the August Journal Entries tab in your workbook
August 5- paid employee for period ending 7/31
August 8-Receive payments from customers towards accounts receivable in amount of $3200.
August 10 – paid July telephone bill
August 15- Purchase additional baking supplies in amount of $5000 from vendor, on account.
August 15 – Accrue wages earned for employee from period of 1st through 15th of August
(Wage calculations table provided below)
August 15-Pay rent on bakery space $1500
August 18-Receive payments from customers towards accounts receivable in amount of $1000
August 20- paid $8500 toward baking supplies vendor payable
August 20- pay employee for period ending 8/15
August 22- $300 in misc. supplies purchased
August 31- received telephone bill for August in amount of $45. Payment is due on September 10th.
August 31- Accrue wages earned for employee for period of August 16th through August 31st