Question: Introductory Accounting Mechanics Quiz
Purpose of Quiz: This take home quiz has been designed as a review of the pre-requisite accounting knowledge necessary to be successful in ACTG 381. This quiz focuses on recording basic accounting transactions/journal entries, understanding T accounts, and creating a set of financial statements. It is also intended as an opportunity to practice using basic Excel functions. The accounting issues included in this quiz are assumed to have been covered in your prerequisite financial accounting course. If you need a reference, you could refer to the textbook from your pre-requisite accounting course, WileyPlus Chapter 0 Reading Assignment and Problems, or Chapter 3 in the textbook for this class. Students who are unable to successfully complete this quiz should consider taking ACTG 381 in a future term after reworking the pre-requisite material.
Background: Plush Service Corporation (Plush) was founded in 2008 by Judy and Julie Plush. The company repairs espresso machines and grinders for coffee shops and other types of clients. Judy and Julie decided to start the company when they realized it was the perfect way to combine their love of coffee and mechanical systems. Plush employs a few field technicians and sales people as well as an MBA, Suzanne Johnson. To date Suzanne has been doing all the accounting for the company. In January 2017, Plush hires you as an accounting intern.
Required: Suzanne Johnson has just provided you with the attached beginning balances for 2017. Assume this trial balance has been correctly prepared. Plush's year end is December 31st.
(A) Using the Excel General Journal spreadsheet in this file, record the 2017 transactions listed below AND the necessary year end adjusting journal entries. Label the transactions in numeric sequence corresponding to the numbers below. Each of the transactions below requires a journal entry. Note that there is a debit and credit control total at the top of the general journal so that you can check after each entry to see if you are in balance.
1. Issued an additional 10,000 shares of common stock on January 2. The stock was sold for $80,000, which equals the par value of the stock.
2. Purchased store equipment for $10,000 cash on January 3.
3. Provided services for cash of $35,000 on February 5.
4. Provided services on credit for $90,000 on February 10.
5. Received bill and paid utilities of $15,000 on February 15.
6. Paid sales salaries of $30,000 on March 1.
7. Incurred legal fees of $6,000 on April 10, but did not pay for these services.
8. Declared and paid dividends to stockholders of $2,000 on April 30.
9. Collected $25,000 for services to be provided over the coming year on June 30.
10. Paid $72,000 for a three-year insurance policy on July 10 with coverage beginning on August 1.
11. Paid $1,000 for a three-week equipment rental on September 10.
12. Collected $10,000 from the February 10 transaction on October 20.
13. Paid $1,000 of the amount owed for legal fees incurred on April 10 on November 18.
14. Sold land with cost of $100,000 for $120,000 cash on December 1.
Suzanne also provided you the following information that she thought may be helpful in preparing the year-end financial statements.
15. As of December 31, Plush has not recorded any insurance expense for the year. The only insurance policy it owns is the one purchased in #10 above.
16. Plush depreciates its store equipment at a rate of $8,000 per year. Depreciation expense has not been recorded as of December 31.
17. For the fees collected on June 30 (#9 above), Plush estimated that 30% of the service fees collected in advance had been earned by the end of the year.
18. Plush received a timesheet from a field technician indicating that services amounting to $35,000 had been provided that need to be billed to customers and recorded.
19. Plush incurs salaries of $4,000 at the end of the year. The next payroll date is January 2 of the following year. (Ignore payroll taxes and withholdings)
(B) "Post" the journal entries from the General Journal to the Excel spreadsheet of T-accounts in this file. All necessary T-accounts have been provided. This should be completed through the use of Excel formulas rather than retyping the numbers in your T-accounts. Please also place the number of each transaction next to each journal entry (see transaction ‘1' in the Excel T-Account sheet for an example). TIP: Set up your spreadsheet to have debit and credit control totals so that you can check after each entry to see if you are in balance.
(C) In Excel, prepare a balance sheet as of 12/31/17 and a SINGLE-STEP income statement for the year ended 12/31/17. This should be completed through the use of Excel formulas rather than retyping the ending balances from your T-accounts in the financial statements. Note that you do not need to record closing entries to the General Journal, just use the T-account balances to create your balance sheet and income statement. You do NOT need to prepare a Statement of Shareholders' Equity or Statement of Cash Flows. Income taxes should be ignored.
Information related to above question is enclosed below:
Attachment:- IntroQuiz_Spring2018.rar