ACC231 A. T. Still University Week 4 Case Study Workbook This is your weekly case study. Complete using the Excel template provided for you here. Week 4 Ca

ACC231 A. T. Still University Week 4 Case Study Workbook This is your weekly case study. Complete using the Excel template provided for you here. Week 4 Case Study = CH 4 CS-1 on Workbook pp 162-167 ACC 231
CH 4 Case Study
CS-1 on workbook pp 162-167
NAME
Part a – complete the account listing
Account Name
Accounts Payable
Accounts Receivable
Cash
Equipment
Mawani, Capital
Mawani, Withdrawals
Notes Payable
Office Supplies
Prepaid Insurance
Insurance Expense
Rent Expense
Salaries Expense
Service Revenue
Unearned Revenue
Utilities Expense
Total
$
$
$
$
Balance
Account Category
6,900 liabilties
5,400
2,200
11,600
$
$
$
12,500
–
$
$
200
–
$
$
$
–
$
$
$
–
Debit
$
Credit
6,900
$
6,900
–
Part b – identify the accounting cycle steps prior to the trial balance
$
–
ACC 231
CH 4 Case Study
CS-1 on workbook pp 162-167
Part c – Prepare journal entries for March
JOURNAL
Date
3/2/2018
3/3/2018
3/4/2018
3/6/2018
3/8/2018
3/10/2018
3/13/2018
3/15/2018
3/16/2018
3/20/2018
Account Title and Explanation
Rent Expense
Cash
Paid March office rent
PR
540
101
Page 1
Credit
Debit
$
2,000
$
2,000
3/23/2018
3/29/2018
#1
3/29/2018
#2
3/30/2018
3/31/2018
Hint: make sure each journal entry balance with the
same amount on the left and same amount on the right
Hint: make sure your debit is first followed by your credit
ACC 231
CH 4 Case Study
CS-1 on workbook pp 162-167
Part c – Post to the ledger accounts
Account:
Date
Beginning
3/2/18
Cash
Account:
Date
Beginning
Accounts Receivable
Description
Account:
Date
Beginning
Prepaid Insurance
Description
Account:
Date
Beginning
Office Supplies
Description
Account:
Date
Beginning
Equipment
Account:
Date
Beginning
Accounts Payable
Description
Description
PR
DR
J1
Description
PR
PR
PR
PR
PR
$
DR
DR
DR
DR
DR
GL No:
101
Balance
$
2,200 DB
2,000 $
200 DB
CR
CR
GL No:
105
Balance
CR
GL No:
110
Balance
CR
GL No:
115
Balance
CR
GL No:
120
Balance
CR
GL No:
200
Balance
Account:
Date
Beginning
Unearned Revenue
Description
CR
GL No:
210
Balance
Account:
Date
Beginning
Notes Payable
Description
DR
CR
GL No:
215
Balance
PR
Account:
Date
Beginning
Mawani, Capital
Description
PR
DR
CR
GL No:
300
Balance
Account:
Date
Mawani, Withdrawals
Description
PR
DR
CR
GL No:
310
Balance
Account:
Date
Service Revenue
Description
PR
DR
CR
GL No:
400
Balance
Account:
Date
Rent Expense
Description
PR
DR
CR
GL No:
540
Balance
Account:
Date
Utilities Expense
Description
PR
DR
CR
GL No:
550
Balance
Account:
Date
Salaries Expense
Description
CR
GL No:
560
Balance
PR
PR
DR
DR
Hint: don’t forget the beginning balances!
Hint: some people like to print off the journal entries
on paper and check off each item as you post it in
here to the ledger accounts. Printing helps!
Hint: don’t forget the DB or CR for each line
ACC 231
CH 4 Case Study
CS-1 on workbook pp 162-167
Part d – complete the Trial Balance
Mawani Interiors
Trial Balance
As of March 31, 2018
Account Titles
Cash
Accounts Receivable
Prepaid Insurance
Office Supplies
Equipment
Accounts Payable
Unearned Revenue
Notes Payable
Mawani, Capital
Mawani, Withdrawals
Service Revenue
Rent Expense
Utilities Expense
Salaries Expense
Total
Debit
Part e – discuss the ethical ramifications of eliminating the journal
Credit
$0
$0
Hint: you will know you’ve got it, if your ending
DEBIT balance equals your ending CREDIT balance
Hint: make sure to complete all 5 parts of this case
Chapter 4
The Accounting Cycle: Journals and Ledgers
learning OBJECTIVES
LO 1
Distinguish between debits and credits
LO 5
Post journal entries to the general ledger

LO 2
Describe the accounting cycle
LO 6
Prepare a trial balance
LO 3
Explain how to analyze a transaction
LO 7
LO 4
Record transactions in the general journal

escribe ethics and internal controls relating to
D
recording and posting transactions
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Assessment Questions
AS-1
LO 1
What does the term debit refer to?
AS-2
LO 1
True or False: A credit will always be an increase to any account.
AS-3
LO 1
Which three types of accounts use the debit side of the T-account to increase their value?
AS-4
LO 1
Which three types of accounts use the credit side of the T-account to increase their value?
AS-5
LO 1
What is the normal balance of an asset?
121
Chapter 4
AS-6
The Accounting Cycle: Journals and Ledgers
LO 1
What is the normal balance of a liability?
AS-7
LO 5
Explain the purpose of a chart of accounts.
AS-8
LO
2 3 4 5 6
List and describe the first four steps of the accounting cycle.
AS-9
LO 4
In the accounting cycle, what is the purpose of creating journals?
AS-10
LO 5
In the accounting cycle, what is the purpose of the general ledger?
AS-11
LO 6
In the accounting cycle, what is the purpose of the trial balance?
AS-12
LO 4
In the journal, what information is entered in the PR (posting reference) column?
122
The Accounting Cycle: Journals and Ledgers
AS-13
Chapter 4
LO 5
What is the relationship between the closing balance and the opening balance for an asset?
AS-14
LO 6
If the trial balance balances, were all transactions correctly recorded? Explain.
AS-15
LO 6
If an error is found in a journal entry that has already been prepared and posted to the general ledger, how
should the error be corrected?
AS-16
LO 7
Does using a computerized accounting information system automatically mean that accounting information is
reliable and accurate? Explain.
123
Chapter 4
The Accounting Cycle: Journals and Ledgers
Application Questions Group A
AP-1A
LO 1 3
Esteem Fitness provides fitness services for its customers. During June 2018, Esteem Fitness had the following
transactions.
Jun
Jun
Jun
Jun
Jun
Jun
Jun
1
3
6
10
15
20
26
Sold one-month memberships to customers for $4,500 on account
Received a telephone bill for $250, which will be paid next month
Paid an employee’s salary of $1,200
Received $3,000 cash from customers paying in advance for upcoming one-year memberships
Paid $6,000 cash in advance for six months of rent
Received a $10,000 loan from the bank
Purchased equipment with $8,000 cash
Complete the table to analyze each transaction.
Account Name
Category
Increase or Decrease
Debit or Credit
Jun 1
Jun 3
Jun 6
Jun 10
Jun 15
Jun 20
Jun 26
AP-2A
LO 1 3
Have-a-Bash, owned by Finn Tymes, provides party planning services. During October 2018, Have-a-Bash had the
following transactions.
Oct 1
Finn invested $5,000 cash into the business
Oct 2
Planned a party for a customer and received $900 cash
Oct 4
Received a $500 utilities bill, which will be paid later
Oct 10
Paid $200 cash for maintenance for the month
Oct 12
Paid $400 towards the bank loan principal
Oct 18
Received cash from a customer who owed $1,100
Oct 22
Paid the utilities bill received earlier
Oct 28
Paid $3,000 cash in advance for office rent
Complete the table to analyze each transaction.
124
The Accounting Cycle: Journals and Ledgers
Account Name
Chapter 4
Category
Increase or Decrease
Debit or Credit
Oct 1
Oct 2
Oct 4
Oct 10
Oct 12
Oct 18
Oct 22
Oct 28
AP-3A
LO 1
For the following list of accounts, indicate which side of the T-account causes an increase or decrease. The first
account has been done for you.
Account Title
Cash
Debit
Credit
Increase
Decrease
Advertising Expense
Service Revenue
Unearned Revenue
Accounts Receivable
Accounts Payable
Owner’s Capital
Owner’s Withdrawals
Prepaid Rent
Rent Expense
AP-4A
LO 3 4
Kick-off Sports Training helps train children in various sporting activities. During May 2018, the following
transactions took place.
May
May
May
May
May
May
May
May
3
3
4
4
10
10
11
15
Received a maintenance bill for $500, which will be paid next month
Received $2,750 cash for training services provided
Borrowed $4,000 cash from the bank
Received $220 from a customer who owed money on training services already provided
Prepaid $1,200 cash for insurance for one year
Paid telephone expenses of $150 for the month with cash
Paid $700 cash to reduce the amount owed to a supplier
Paid $25 interest on the bank loan
Prepare the journal entries for the transactions.
125
Chapter 4
The Accounting Cycle: Journals and Ledgers
Date
AP-5A
Account Title and Explanation
PR
Debit
Credit
LO 3 4
Rejuvenation Spa is a sole proprietorship owned by Claire Sawyer. During the month of July 2018, the following
transactions took place.
July 3
Provided services to a customer on account worth $3,600
July 4
Borrowed $2,000 cash from the bank
July 6
Provided services to a customer and received $2,400 in cash
July 10
Received a telephone bill for $250, which will be paid later
July 11
Paid $600 cash to reduce the amount owed to a supplier
July 15
Collected $1,800 cash from customers owing on account
July 20
Paid the telephone bill from July 10
July 21
Paid a portion of the bank loan principal with $1,500 cash
July 31
Paid salaries for the month with $1,600 cash
July 31
Purchased equipment for $1,900, which will be paid later
Prepare the journal entries for the above transactions.
126
The Accounting Cycle: Journals and Ledgers
Date
Account Title and Explanation
Chapter 4
PR
Debit
Credit
127
Chapter 4
AP-6A
The Accounting Cycle: Journals and Ledgers
LO 3 4
Noel Dy opened an automobile repair shop. The following transactions occurred during the month of March
2018.
Mar
Mar
Mar
Mar
Mar
Mar
Mar
Mar
Mar
Mar
Mar
Mar
1
3
5
7
8
15
18
19
20
29
31
31
Noel Dy invested $10,000 cash and $8,000 worth of equipment in the business
Paid $1,000 cash to rent the shop space
Purchased $1,200 worth of shop tools using cash
Received $2,000 cash for repair work done for MJ Gonzales
Purchased $1,000 worth of shop tools from Adrian Cruz on account
Paid half of the amount due to Adrian Cruz with cash
Paid $200 cash to a local publication for advertising
Paid salaries with $1,000 in cash
Noel Dy withdrew $1,500 cash for personal use
Bought $1,000 worth of chairs and tables for the shop on account
Noel Dy personally invested additional equipment worth $5,000 for business use
Received $3,000 cash from various customers for repairs done on their automobiles
Prepare journal entries for the above transactions.
Date
128
Account Title and Explanation
PR
Debit
Credit
The Accounting Cycle: Journals and Ledgers
Date
AP-7A
LO
Chapter 4
Account Title and Explanation
PR
Debit
Credit
3 4 5 6
Thomas Topology provides surveying services to construction companies and municipalities. The company is
owned and operated by Thomas Edwards. The closing balances at the end of March 2018 and the chart of
accounts are shown below.
Thomas Topology
Balance Sheet
As at March 31, 2018
Assets
Cash
Liabilities
$22,000 Accounts Payable
$10,500
Accounts Receivable
9,000 Unearned Revenue
4,500
Equipment
8,000 Notes Payable
6,000
Total Liabilities
21,000
Owner’s Equity
Edwards, Capital
Total Assets
$39,000 Total Liabilities and Owner’s Equity
18,000
$39,000
129
Chapter 4
The Accounting Cycle: Journals and Ledgers
Account Description
Account #
ASSETS
Account Description
Account #
REVENUE
Cash
Accounts Receivable
Prepaid Insurance
Equipment
101
105
110
120
LIABILITIES
400
Service Revenue
EXPENSES
515
520
540
545
550
555
Insurance Expense
Interest Expense
Rent Expense
Accounts Payable
Unearned Revenue
Notes Payable
200
210
215
Salaries Expense
Telephone Expense
Travel Expense
OWNER’S EQUITY
Edwards, Capital
Edwards, Withdrawals
300
310
During the month of April, Thomas Topology had the following transactions.
Apr 1
Purchased office equipment on account worth $7,000
Apr 2
Received $25,000 cash for services provided
Apr 3
Paid $1,000 cash for April’s rent
Apr 4
Prepaid $1,200 for insurance for one year
Apr 10
Paid $200 cash to reduce the balance of accounts payable
Apr 14
Paid $8,000 cash for employee’s salaries
Apr 22
Received a telephone bill for $250, which will be paid next month
Apr 24
Recorded travel expenses for $8,000 to be paid next month
Apr 30
Paid $4,550 to bank for the bank loan principal and interest; interest was $50 and the
remainder was principal
Required
a)
Prepare the journal entries for the month of April.
Date
130
Account Title and Explanation
PR
Debit
Credit
The Accounting Cycle: Journals and Ledgers
Date
Chapter 4
Account Title and Explanation
PR
Debit
Credit
b) Post the journal entries to the ledger accounts.
Account:
Date
Description
PR
DR
CR
GL No:
Balance
Account:
Date
Description
PR
DR
CR
GL No:
Balance
CR
GL No:
Balance
Account:
Date
Description
PR
DR
131
Chapter 4
The Accounting Cycle: Journals and Ledgers
Account:
Date
GL No:
Description
PR
DR
CR
Description
PR
DR
CR
Account:
Date
GL No:
Account:
Date
Description
PR
DR
CR
Description
PR
DR
CR
132
Balance
GL No:
Description
PR
DR
CR
Account:
Date
Balance
GL No:
Account:
Date
Balance
GL No:
Account:
Date
Balance
Balance
GL No:
Description
PR
DR
CR
Balance
The Accounting Cycle: Journals and Ledgers
Chapter 4
Account:
Date
GL No:
Description
PR
DR
CR
Account:
Date
GL No:
Description
PR
DR
CR
Account:
Date
Description
PR
DR
CR
Description
PR
DR
CR
Description
PR
DR
CR
Balance
GL No:
Description
PR
DR
CR
Description
PR
DR
CR
Account:
Date
Balance
GL No:
Account:
Date
Balance
GL No:
Account:
Date
Balance
GL No:
Account:
Date
Balance
Balance
GL No:
Balance
133
Chapter 4
c)
The Accounting Cycle: Journals and Ledgers
Prepare a trial balance at the end of April.
AP-8A
LO
3 4 5 6
High Flying Biplane provides sightseeing tours in vintage biplanes. The company is owned by Sky Bridges. The
closing balances at the end of May 2018 and the chart of accounts are shown below.
Assets
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Total Assets
Account Description
High Flying Biplane
Balance Sheet
As at May 31, 2018
Liabilities
$8,000 Accounts Payable
6,000 Unearned Revenue
1,200 Notes Payable
60,000 Total Liabilities
Owner’s Equity
Bridges, Capital
$75,200 Total Liabilities and Owner’s Equity
Account #
ASSETS
Cash
Accounts Receivable
Prepaid Insurance
Equipment
Interest Payable
Unearned Revenue
Notes Payable
101
105
110
120
Bridges, Withdrawals
134
Service Revenue
300
310
400
EXPENSES
Advertising Expense
Insurance Expense
Interest Expense
200
205
210
215
OWNER’S EQUITY
Bridges, Capital
Account #
REVENUE
LIABILITIES
Accounts Payable
Account Description
Telephone Expense
500
515
520
550
$8,200
3,200
20,000
31,400
43,800
$75,200
The Accounting Cycle: Journals and Ledgers
Chapter 4
During the month of June, High Flying Biplane had the following transactions.
Jun
Jun
Jun
Jun
Jun
Jun
Jun
Jun
Jun
Jun
1
2
3
4
10
14
20
22
24
30
The owner invested $5,000 cash into the business
Received $1,500 cash for tours that will be provided in August
Received an advertising bill for $400, which will be paid next month
Paid the telephone bill with $200 cash
Provided tours worth $2,400 to a customer who will pay next month
Purchased equipment with $4,000 cash
Received payments totaling $1,600 from customers paying their accounts
Paid $900 towards accounts payable
Paid $1,000 towards the bank loan principal
The owner withdrew $1,200 cash for personal use
Required
a)
Prepare the journal entries for the month of June.
Date
Account Title and Explanation
PR
Debit
Credit
135
Chapter 4
The Accounting Cycle: Journals and Ledgers
b) Post the journal entries to the ledger accounts.
Account:
Date
Description
PR
DR
CR
GL No:
Balance
Account:
Date
Description
PR
DR
CR
GL No:
Balance
Account:
Date
Description
PR
DR
CR
GL No:
Balance
CR
GL No:
Balance
Account:
Date
Description
PR
DR
Account:
Date
136
GL No:
Description
PR
DR
CR
Balance
The Accounting Cycle: Journals and Ledgers
Account:
Date
Description
Chapter 4
PR
DR
CR
Account:
Date
GL No:
Description
PR
DR
CR
Description
PR
DR
CR
Account:
Date
Description
PR
DR
CR
Description
PR
DR
CR
Balance
GL No:
Description
PR
DR
CR
Account:
Date
Balance
GL No:
Account:
Date
Balance
GL No:
Account:
Date
Balance
GL No:
Account:
Date
GL No:
Balance
Balance
GL No:
Description
PR
DR
CR
Balance
137
Chapter 4
The Accounting Cycle: Journals and Ledgers
Account:
Date
GL No:
Description
PR
DR
CR
Account:
Date
GL No:
Description
PR
DR
CR
Account:
Date
c)
Balance
GL No:
Description
Prepare a trial balance at the end of June.
138
Balance
PR
DR
CR
Balance
The Accounting Cycle: Journals and Ledgers
AP-9A
Chapter 4
LO 6
Micro Company, owned by Steven Upton, showed these accounts and their corresponding normal balances on
May 31, 2018.
Account Title
Upton, Capital
Insurance Expense
Balance
$23,500
900
Accounts Payable
15,500
Service Revenue
8,900
Equipment
34,500
Supplies Expense
3,000
Cash
6,400
Salaries Expense
4,000
Rent Expense
3,000
Upton, Withdrawals
3,000
Utilities Expense
1,300
Notes Payable
Prepaid Insurance
10,200
2,000
Prepare Micro Company’s trial balance at May 31, 2018.
139
Chapter 4
AP-10A
The Accounting Cycle: Journals and Ledgers
LO 6
Home Circus is owned by Laura Roberts and provides acrobatic entertainment at children’s parties and other
events. Its complete general ledger for March 2018 is shown below.
Account: Cash
Date
Mar 1
GL No: 101
Description
PR
DR
CR
Balance
Opening Balance
7,800 DR
Mar 1
J1
1,800
Mar 2
J1
Mar 3
J1
1,440
7,460 DR
Mar 10
J1
10
7,450 DR
Mar 10
J1
780
6,670 DR
Mar 20
J1
2,600
9,270 DR
Mar 22
J1
800
10,070 DR
Mar 24
J1
710
9,360 DR
Mar 31
J1
2,000
7,360 DR
2,900
8,900 DR
Account: Accounts Receivable
Date
Mar 1
Description
GL No: 105
PR
DR
CR
Opening Balance
J1
800
Account: Prepaid Insurance
Mar 1
PR
DR
CR
Opening Balance
J1
1,800
1,800 DR
Account: Office Supplies
GL No: 115
Description
PR
DR
CR
Opening Balance
J1
250
890 DR
Account: Equipment
Mar 1
Mar 20
140
Balance
640 DR
Mar 4
Date
Balance
0 DR
Mar 1
Mar 1
1,660 DR
GL No: 110
Description
Date
Balance
2,460 DR
Mar 22
Date
6,000 DR
GL No: 120
Description
PR
DR
CR
Opening Balance
Balance
10,500 DR
J1
2,600
7,900 DR
The Accounting Cycle: Journals and Ledgers
Chapter 4
Account: Accounts Payable
Date
Mar 1
GL No: 200
Description
PR
DR
CR
Opening Balance
2,900 CR
Mar 4
J1
Mar 24
J1
250
710
Mar 1
GL No: 210
Description
PR
DR
CR
Opening Balance
Mar 1
GL No: 215
Description
PR
DR
CR
Opening Balance
J1
780
4,320 CR
Account: Roberts, Capital
Mar 1
GL No: 300
Description
PR
DR
CR
Opening Balance
Description
Mar 31
GL No: 310
PR
DR
CR
J1
2,000
GL No: 400
Description
Mar 2
PR
DR
J1
CR
Balance
2,900
2,900 CR
Account: Office Supplies Expense
Date
Description
Mar 10
GL No: 520
PR
DR
J1
CR
10
Mar 3
Balance
10 DR
Account: Rent Expense
Date
Balance
2,000 DR
Account: Service Revenue
Date
Balance
11,600 CR
Account: Roberts, Withdrawals
Date
Balance
5,100 CR
Mar 10
Date
Balance
1,800 CR
Account: Notes Payable
Date
3,150 CR
2,440 CR
Account: Unearned Revenue
Date
Balance
GL No: 540
Description
PR
DR
J1
1,440
CR
Balance
1,440 DR
141
Chapter 4
The Accounting Cycle: Journals and Ledgers
Prepare a trial balance. Place the accounts in the order shown in the general ledger.
AP-11A
LO 1 6
A part-time bookkeeper for Wombat Tours has created the trial balance at the end of the year and cannot get it
to balance.
Wombat Tours
Trial Balance
December 31, 2018
Account Title
Accounts Payable
Accounts Receivable
Advertising Expense
Notes Payable
Sharpe, Capital
Cash
Interest Expense
Maintenance Expense
Office Supplies
Sharpe, Withdrawals
Prepaid Insurance
Equipment
Rent Expense
Salaries Expense
Service Revenue
Telephone Expense
Unearned Revenue
Total
DR
$3,150
2,350
CR
$2,100
5,200
6,170
6,200
560
240
1,600
2,300
1,200
13,500
6,200
5,300
25,800
450
1,680
$40,830
$43,170
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