Prepare adjusting entries for the following transactions

Instructions
CASE STUDY - THE COMPLETE ACCOUNTING CYCLE
Name: JAN PATRICK BRACEROS
This Case Study is worth 100 points, or 10% of your final course grade.
This Case Study relates to TCOs E and F, and Chapters 2 and 3.
MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.
There are 10 sheets in the Workbook, including this one.
All of the information that you need for the project is located in this Workbook.
Requirements Sheet in Workbook
Requirement 1—Prepare the Journal Entries in the General Journal Journal Entries
Requirement 2—Post Journal Entries to the General Ledger General Ledger
Requirement 3—Prepare a Trial Balance Trial Balance
Requirement 4—Prepare the Adjusting Entries Adjusting Entries
Requirement 5—Post Adjusting Entries to the General Ledger General Ledger
Requirement 6—Prepare an Adjusted Trial Balance Adjusted Trial Balance
Requirement 7—Prepare the Financial Statements Financial Statements
Requirement 8—Prepare the Closing Entries Closing Entries
Requirement 9—Post Closing Entries to the General Ledger General Ledger
Requirement 10—Prepare the Post Closing Trial Balance Post-Closing Trial Balance
Hint for success: Review the Week 2 Lesson prior to starting this project.
There are also hints contained within certain cells on some of the Worksheet tabs.
You can hover over the red pointer at the top right-hand corner of the cell to read the hint.
Hints are provided for the following balances:
1) The debits for the journal entries are on the Journal Entries tab.
2) The credits for the journal entries are on the Journal Entries tab.
3) The cash balance is on the General Ledger tab.
4) The debits for the trial balance are on the Trial Balance tab.
5) The credits for the trial balance are on the Trial Balance tab.
6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab.
7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab.
8) Net income for the income statement is on the Financial Statements tab.
9) Retained earnings as of July 31 are on the Financial Statements tab.
10) Total assets for the balance sheet are on the Financial Statements tab.
11) Total liabilities and shareholders' equity for the balance sheet are on the Financial Statements tab.
12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab.
13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab.
Sheet1
Journal Entries
Requirement #1:
During its first month of operation in July, the Quick Tax Corporation, which specializes in tax preparation,
completed the following transactions.
July 1 Began business by making a deposit in a company bank account of $40,000, in exchange
for 4,000 shares of $10 par value common stock.
July 3 Paid the current month's rent, $2,500
July 5 Paid the premium on a 1-year insurance policy, $3,600
July 7 Purchased supplies on account from Little Company, $700.
July 10 Paid employee salaries, $2,800
July 14 Purchased equipment from Lake Company, $9,500. Paid $1,500 down and the balance was
placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1.
Note: Use accounts payable for the balance due.
July 15 Received cash for preparing tax returns for the first half of July, $6,500
July 19 Made payment on account to Lake Company, $500.
July 31 Received cash for preparing tax returns for the last half of July, $8,250
July 31 Declared and paid cash dividends of $450.
Prepare journal entries to record the July transactions in the General Journal below. Use the following account names for journal entries.
Chart of Accounts: Account Title (Normal Balance)
Date Account Names Debit Credit
1-Jul Cash a/c Dr. 40,000 Assets
to common stock 40,000 Cash (Debit)
3-Jul rent expense a/c Dr 2,500 Prepaid Insurance (Debit)
to cash 2,500 Supplies (Debit)
5-Jul prepaid isurance a/c Dr. 3,600 Equipment (Debit)
to cash 3,600 Accumulated Depreciation - Equipment (Credit)
7-Jul supplies a/c/ Dr 700
to account payable 700 Liabilities
10-Jul Salary expense a/c Dr. 2,800 Accounts Payable (Credit)
to Cash 2,800 Income Tax Payable (Credit)
14-Jul Equipment A/c Dr. 9,500
To cash 1,500 Stockholders' Equity
accounts payable 8,000 Common Stock (Credit)
15-Jul cash a/c Dr. 6,500 Retained Earnings (Credit)
To serivce Revenue(tax) 6,500 Dividends (Debit)
19-Jul Account payable A/c DR. 500
cash 500 Revenue
31-Jul cash 8,250 Tax Preparation Revenue (Credit)
tax preparation revenue 8,250
31-Jul dividends 450 Expenses
cash 450 Rent Expense (Debit)
Salaries Expense (Debit)
74,800 74,800 Insurance Expense (Debit)
Supplies Expense (Debit)
Depreciation Expense (Debit)
Income Tax Expense (Debit)
Note: Remember that debits must equal credits—all of your journal entries should balance.
General Ledger
This Sheet will be used for Requirements 2, 5, and 9.
Requirement #2:
Post the July journal entries to the following T-accounts and compute ending balances.
Cash
DeVry: The balance of the Cash account after posting all journal entries should be $43,400. Tax Preparation Revenue
Service Revenue 6500 rent 2500 cash 6500
Service Revenue 8250 prepaid insurance 3600 cash 8250
salaries 2800
Advances 500 total 14750
divident 450
bal c/d 4900
total 14,750 14,750
1- August Balance b/d 4900
Prepaid Insurance Rent Expense
cash 3600 cash 3- jul Cash 2500 31 Bal 2500
2500 2500
3600 1 Aug Bal B/d 2500
Supplies Salaries Expense
cash 700 cash 2800
700
Equipment Bank A/c/
cash 900 Common Stock 40000 Balance C/d 40000
40000 40000
900 1 August Balance b/d 40000
Accumulated Depreciation - Equipment Supplies Expense
equipment(accounts payable) 2000
Accounts Payable Depreciation Expense
cash 500 equipment (cash) 10000
bal c/d 9500
total 10000 total 10000
bal b/d 9500
Income Tax Payable Income Tax Expense
Common Stock Retained Earnings
31 jul Bal c/d 40000 cash 40000
40000 40000
1-aug Bal b/d 40,000
Dividends
450
450
Trial Balance
Requirement #3:
Prepare a trial balance for July in the space below.
Quick Tax Corporation
Trial Balance
July 31
Account Names Debits Credits
cash 43,400
equipment 9,500
prepaid insurance 3,600
supplies 700
accounts payable 8,200
common stock 40,000
dividend 450
tax preparation revenue 14,750
rent expense 2,500
salaries expense 2,800
supplies
62,950
DeVry: Debits equal $62,950 62,950
DeVry: Credits equal $62,950
Adjusting Entries
Requirement #4:
Prepare adjusting entries using the following information in the General Journal
below. Show your calculations!
a) One month's insurance has expired.
b) The remaining inventory of supplies is $300.
c) The estimated depreciation on equipment is $125.
d) The estimated income taxes are $2700.
Date Account Names Debit Credit
31-Jul Prepaid Insurance 300
31-Jul Supplies 400
31-Jul Accumulated Depreiciation Equio 125
31-Jul Income Tax 2700
31-Jul Insurance Expense 300
31-Jul Supplies Expense 400
31-Jul Depreciation Expense 125
31-Jul Income Tax Expense 2,700
3,525 3,525
Requirement #5:
Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.
Adjusted Trial Balance
Requirement #6:
Prepare an adjusted trial balance in the space below.
Quick Tax Corporation
Adjusted Trial Balance
July 31
Account Names Debits Credits
cash 43,400
prepaid insurance 3,300
supplies 300
equipment 9,500
Accumulated depreciatiion Equipment 125
Account payable 8,200
income tax payable 450 2,700
common stock 40,000
Dividends 450
Service Revenue 14,750
Rent Expense 2,500
salaries Expense 2800
Insurance Expense 300
Depreciation Expense 125
Incom tax expense 2700
65825
DeVry: Debits equal $65,775 65775
DeVry: Credits equal $65,775
Financial Statements
Requirement #7:
Prepare the financial statements for the Quick Tax Corporation as of July 31 in the space below.
You will only be preparing the income statement, statement of retained earnings, and the balance sheet.
The statement of cash flows is a required financial statement, but is not required for this case study.
Quick Tax Corporation Quick Tax Corporation Quick Tax Corporation
Income Statement Statement of Retained Earnings Balance Sheet
For the Month Ending July 31 For the Month Ending July 31 July 31
Revenues: Retained Earnings, July 1 Assets:
Tax Preparation Revenue $ 14,750 Add: Net Income 5,925 Cash 43,400
Subtotal Supplies
Expenses: Less: Dividends 450 Prepaid Insurance 3,600
Rent Expense 2,500 Retained Earnings, July 31 $ 5,475
DeVry: Retained Earnings equals $5,475 Equipment
Salaries Expense 2,800 Less: Accum Depreciation 125
Insurance Expense 3,600 Total Assets 56,375
DeVry: Total assets equals $56,375
Supplies Expense 2,000
Depreciation Expense Liabilities:
Income Tax Expense Accounts Payable
Total Expenses Income Tax Payable
Total Liabilities
Net Income $ 5,925
DeVry: Net Income equals $5,925 Stockholders' Equity:
Common Stock
Retained Earnings
Total Stockholders' Equity
Total Liabilities and
Stockholders' Equity

DeVry: Total Liabilities & Stockholders' Equity equals $56,375
Closing Entries
Requirement #8:
Prepare the closing entries at July 31 in the General Journal below.
Date Account Names Debit Credit
Cash 42700
Prepaid Insurance 3600
Supplies 700
Equipments 9500
Tax Preparation Revenue 14750
Rent Expense 2500
Salaries Expense 2800
Accounts Payable 9500
Supplies Expense 2000
Common Stock 40000
Dividends 450
64250 64250
Requirement #9:
Post the closing entries to the General Ledger T-accounts and compute ending balances.
Post-Closing Trial Balance
Requirement #10:
Prepare a post-closing trial balance as of July 31 in the space below.
Quick Tax Corporation
Post-Closing Trial Balance
July 31
Account Names Debits Credits
Cash 42,700
Equipments 9,500
Prepaid Insurance 3,600
Tax Preparation Insurance 14,750
Rent Expense 2,500
Supplies 2,700
Accounts Payable 9,500
Common Stock 40,000
Dividends 450
Salaries Expense 2,800
64,250
DeVry: Debits equal $56,500 64,250
DeVry: Credits equal $56,500