Acc 201 Peyton

Step 1:Complete the following in the “July Journal Entries” tab in your workbook (be sure to look for the July Journal Entries tab at the bottom of the Peyton Approved Student Workbook). The following events occur in July 2014:July 1 – You take $15,000 from your personal savings account and buy common stock in Peyton               Approved. July 1-Purchase $8500 in baking supplies from vendor, on accountJuly 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 10thJuly 31 – Pay $1,200 for a 12-month insurance policy. Policy effective dates August 1, 2014 through July 31st, 2015July 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 receivableStep 2:Complete the following transactions in the August Journal Entries tab in your workbookAugust 5-paid employee for period ending 7/31August 8-Receive payments from customers towards accounts receivable in amount of $3200.August 10 – paid July telephone billAugust 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 $1500August 18-Receive payments from customers towards accounts receivable in amount of $1000August 20- paid $8500 toward baking supplies vendor payableAugust 20- pay employee for period ending 8/15August 22- $300 in misc. supplies purchasedAugust 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                    (Wage calculations table provided below)August bakery sales total $20,000.  $7,500 of this total on accounts receivable.Step 5: Prepare the Unadjusted Trial BalanceUse the t account balances completed in the previous step to prepare the unadjusted trial balance portion of the Trial Balance tab in your workbook.Step 6:You will use the “Adjusting Entries” tab in your workbook to complete the following entries. See sample for Depreciation of Baking Equipment.  Take the adjusting entries from this worksheet and enter them into the trial balance on the Steps 5 and 7 Trial Balance tab.  On September 30, the following adjustments must be made:Depreciation of baking equipment transferred to company on 7/13. Assume ½ month of depreciation in July using the straight-line method. Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.Record insurance used for the year.Actual baking supplies on-hand as of September 30th is $1100.Misc. supplies on-hand as of September 30th is $50.Step 7: Apply adjusting entries to the trial balance to create the adjusted trial balance.Adjusting entries from Step 6 will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance.Step 8:Prepare the financial statementsUse your adjusted trial balance to prepare the income statement, statement of owner’s equity, and balance sheet. You must complete these statements in this order, as there are interdependencies among them.Step 9:You will use the “Closing Entries” tab in your workbook to do the following: Close all temporary income statement accounts and create closing entries.Step 10You will use the Post Closing Trial Balance tab in your workbook to do the following: Prepare the post-closing trial balance for the next accounting period.Step 11”You will use the “Reversing Entries” tab in your workbook to do the following: Prepare reversing entries.This completes your workbook!Wage calculation data: >MonthHoursRatePay31-Jul101212015-Aug401248031-Aug351242015-Sep381245630-Sep4012480Step 3:Many customers have been asking for more hypo-allergenic products, so in September you start carrying a line of hypo-allergenic shampoos on a trial basis. The following information relates to the purchase and sales of the shampoo: You use the perpetual inventory method. You are uncertain as to which valuation method to use—FIFO, LIFO, or weighted average, so you calculate inventory using all three and then decide which one you would like to choose. Please see the Inventory Valuation tab in your workbook, to review application of costs using the FIFO, LIFO, and average methods based on purchase and sales information. You will choose the method you feel most appropriate, and bring the journal entries from the inventory valuation page into your journal for the month of September, to ensure the impact of merchandising is reflected in your reporting.Complete the following transactions in the September Journal Entries tab in your workbook. September 1- paid dividends to self in amount of $3000September 5-pay employee for period ending 8/31September 7-Purchase merchandise for resale. See inventory valuation tab for details.September 8- Receive payments from customers toward accounts receivable in amount of                          $4000September 10- pay August telephone billSeptember 11-purchase baking supplies in amount of $ 7,000 from vendor on account.September 13- Paid on supplies vendor account in amount of $5000September 15- Accrue employee wages for period of September 1st through September 15thSeptember 15- Pay rent on bakery space $1500September 15-Record merchandise sales transaction. See inventory valuation tab for details.September 15-Record impact of sales transaction on COGS and the inventory asset.                            See inventory valuation tab for details.September 20- Pay employee for period ending 9/15September 20-Purchase merchandise inventory for resale to customers.                            See inventory valuation tab for details.September 24- Record sales of merchandise to customers.                            See inventory valuation tab for details.September 24- Record impact of sales transaction on COGS and the inventory asset.                            See inventory valuation tab for details.September 30- Purchase merchandise inventory for resale to customers.                            See inventory valuation tab for details.September 30-Accrue employee wages for period of September 16th through September 30thTotal September bakery sales $25,000. $6,000 of these sales on accounts receivable.Step 4: Post entries to t accounts. Use the t accounts page in your workbook to post all journal entries to the appropriate ledger account and calculate account balances as of September 30th.