The Accounting Cycle, 1 thru 6: Par One Disc Golf

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Beverly Kennedy
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1 The Accounting Cycle, 1 thru 6: Par One Disc Golf SECTION I. ACCOUNTING CYCLE STEPS 1 THRU 4 Par One Disc Golf (PODG) was opened on March 1, 2015 by Brian Jones. The following selected events and transactions occurred during March: Mar. 1 Brian invested $70,000 cash in the business. Mar. 3 PODG purchased the assets of an existing mini-golf course (Geezer Golf), for $48,000 cash. (Wire transfer #FNB ) The price consists of land $20,000, a small office/storage building, $25,000, and equipment, $3,000. (Make one compound entry in the General Journal.) Mar. 5 Advertised the opening of the driving range and miniature golf course, paying advertising expenses of $1,600. Check #101. Mar. 6 Paid cash, $3,600 for a one-year insurance policy. Check #102. Mar. 10 Purchased golf discs and other equipment for $1,050 from Wheeler Company. Agreed to make payment within 30 days. Mar. 12 Purchased supplies, $250, for cash. Check #103. Mar. 18 Received $420 in cash for golf fees. Mar. 19 Sold 100 coupon $18 each. Each book contains four (4) coupons entitling the holder to play one round of disc golf. Mar. 25 Brian withdrew $800 from the business for personal use. Check #104. Mar. 30 Paid salaries of $280 and wages of $300. (Make one compound entry). Checks issued: #105, #106, #107, & #108. Mar. 30 PODG paid Wheeler Company in full, Check #109. Mar. 31 Received $200 cash for golf fees.

2 Requirements: Accounting Cycle Steps 1 thru 4 1. Analyze the transactions in Section I, and record them in the General Journal. (You will find a Chart of Accounts on the last page of this document.) 2 Do NOT record any adjusting entries in the General Journal at this time; that comes later. (Reference: pages in your textbook) 3. Post the journalized transactions on a General Ledger form, or use T- accounts form, if you prefer. (Reference: pages in textbook) 4. Calculate the unadjusted Trial Balance. (Reference: pages in textbook) 5. Continue reading Section II of this document and complete the next portion of this assignment. 2

3 SECTION II. ACCOUNTING CYCLE STEP 5 Evaluate the notes below to decide which adjusting entries are needed before completing the business first set of financial statements. The statements are to be dated March 31, a. The small office/storage building has an estimated useful life of 15 years, and a residual or salvage value of zero. b. The equipment has an estimated useful life of 3 years, and a salvage value of $50. (HINT: see the spreadsheet.) c. On March 29, a group of 10 friends each paid for a round of disc golf with coupons they had purchased on March 19 th (10 coupons were used). d. An inventory on March 31 st found $185 worth of supplies remained on hand. e. Employees had earned, but had not been paid, wages of $120 as of March 31 st. (The business s only salaried employee was on an unpaid vacation, so no additional salary was due her.) f. Examine the business s ASSETS accounts. There is one additional deferred expense that requires an adjusting entry. 3

4 Requirements: Accounting Cycle Step 5 1. Analyze the events in Section II, and record adjusting transactions in the General Journal per the instructions you will find there. (Reference: textbook pages 91-94, adjusting entries; pages 95-99, depreciation) 2. Post the adjusting transactions onto the Trial Balance Worksheet, or use a Trial Balance Form if you prefer (Reference: textbook pages ) 3. Calculate the Adjusted Trial Balance. (Reference: textbook page 101.) 4. Continue reading Section III of this document for the final portion of this assignment. NOTES: 1. Use straight-line depreciation. 2. Do not depreciate an asset below its salvage value. 3. Remember that to calculate MONTHLY depreciation, you will need to divide the YEARLY depreciation by The depreciation for the equipment has been calculated for you on the Excel worksheet tab Depreciate Equipment. You must transfer the appropriate information to the accounting documents. 5. You must figure the depreciation for the building and enter those adjusting entries in the accounting documents. 4

5 SECTION III: PREPARE FINANCIAL STATEMENTS (ACCOUNTING CYCLE STEP 6) Requirements: Accounting Cycle Step 6 1. Using figures from the Adjusted Trial Balance Worksheet, prepare the Income Statement first (reference pages in your textbook) 2. Next, prepare the Statement of Owner s Equity (Reference pages in your textbook) 3. Finally, prepare the Balance Sheet (Reference pages in your textbook). 5

6 APPENDIX I: PAR ONE DISC GOLF CHART OF ACCOUNTS: Acct # Account Title Assets 1001 Cash 1002 Accounts Receivable 1003 Prepaid Insurance 1004 Supplies 1105 Equipment 1106 Accumulated Depreciation, Equipment 1110 Land 1115 Buildings 1116 Accumulated Depreciation, Buildings Liabilities 2001 Accounts Payable 2002 Unearned Revenue Equity 3001 Brian Jones, Capital 3002 Brian Jones, Drawing Revenues 4001 Service Revenue Expenses 6005 Advertising Expense 6010 Depreciation Expense 6015 Insurance Expense 6020 Salaries Expense 6025 Wages Expense Supplies Expense 6

Disco Dave s Dance Club Continuing the Accounting Cycle: Journal, Ledger, Trial Balance, Adjustments, Worksheet

Disco Dave s Dance Club Continuing the Accounting Cycle: Journal, Ledger, Trial Balance, Adjustments, Worksheet Overview One of your friends, Disco Dave, just started a new club called. Chart of Accounts These are the account names and numbers that you should use throughout the problem. Some of these accounts will