Assignment 1: Trial Balance
Listed below are the transactions for Hunter Marketing, Inc. for the month of July:
July 1 Hunter begins his marketing company and invests $50,000 cash. July 5Purchases computers and office equipment on account from OfficeMax for $10,250.July 6Pays rent for office space $800 for the month. July 6Employs a secretary, Mary Jones. July 8Purchases office supplies for cash at $960.July 9Receives $2,430 from customer for services performed. July 11Pays miscellaneous office expenses $375.July 13Bills customers $4,900 for services performed. July 15Pays Office Max $3,500 on account. July 18Pays himself a dividend of $2,000 from business for personal use. July 20Hunter appeared on the cover of a local newsmagazine. The related article extolled Hunter's expertise as well as the new company's values and customer service that it brings to companies in the community. This exposure led to increased inquiries from prospective clients, and Hunter hopes this will increase future sales. July 20Receives $1,900 from customers on account. July 23Bills customers $6,320 for services performed. July 30Pays the following expenses in cash: office salaries $2,300 and utilities $400.Use the transactions to complete the following tasks:
1. Enter the transactions shown above in appropriate general ledger accounts (use t-accounts). Use the following ledger accounts: Cash, Accounts Receivable, Supplies on Hand, Office Equipment, Accumulated Depreciation, Accounts Payable, Common Stock, Retained Earnings, Service Revenue, Rent Expense, Miscellaneous Office Expense, Office Salaries Expense, Supplies Expense, Utilities Expense, Depreciation Expense, and Income Summary.
2. Prepare an unadjusted trial balance.
3. Record depreciation using a 5-year life on the office equipment, the straight-line method, and no salvage value. Round to whole numbers. Also, record an adjustment for office supplies used in the amount of $510.
4. Prepare an adjusted trial balance.
5. Prepare an income statement, a statement of retained earnings, and an unclassified balance sheet.
6. Close the ledger.
7. Prepare a post-closing trial balance.
8. Which transaction do you think had the most or potential significant economic impact on the company? Why are all economically relevant events not recorded in the financial records? Explain.
In addition, please begin your paper by writing a short narrative, with citations and references, describing the accounting cycle.
Next, write your journal entries using proper format.
Finally, complete each step 1-8 above.
Your submission must be well organized, and written responses must be formatted according to the CSU-Global Guide to Writing and APA Requirements. Be sure to submit only one document to be graded for this assignment.
Assignment 2: The Art or Science of Making Adjusting Entries
Refer to the section of Chapter 3 entitled "Adjusting Entries." Then answer the following questions. Ensure the answers are detailed. Retain the numbering of the questions; that is, 1, 2, 3, etc. Support your points with credible sources in addition to your textbook and ensure you follow CSU-Global Guide to Writing and APA Requirements.
1. Who determines how long buildings and furniture and equipment are to last?
2. Who determines the dollar amount of accounts receivable that are doubtful?
3. Suppose we were to change asset depreciation on buildings and the furniture and equipment from 5% and 10% to 4% and 8%, respectively. What would be the effect on net income? Would it increase or decrease? Likewise, suppose our estimate of the balance in Allowance for Bad Debts was reduced from $1,100 to $ 1,000. What would be the effect on net income?
4. Is the adjusting entry process an exact science by which accountants can determine exactly how well a company has done for a period? Or is accounting an art that requires significant judgment on the part of the accountant? What are four types of adjusting entries? How are they similar and how do they differ?
5. What are the dangers for the accountant when making an estimate in an area (like bad debts) where significant judgment is required?
Your well-written paper must be two to three pages in length, in addition to the title and reference pages, and be formatted according to the CSU-Global Guide to Writing and APA Requirements. Cite at least three peer-reviewed sources, in addition to the required readings for this module.