We have a project here to complete and have to use some sort of software, i never took or had anything to do with accounting before, and am having trouble figuring this project out
First we have to journalize 1 month of information, and then make adjusting entries
This is what i have so far. Checking account = cash account
Dec. 1 Issued 20,000 shares of capital stock to Edward Alvarez in exchange for a total of $200,000
cash.
Debit checking account 200,000.00 and Credit Capital Stock 200,000.00
Dec. 1 Paid $12,000 to Buggy Realty for 6 month’s rent paid in advance.
Debit Prepaid Rent 12,000.00 and Credit Checking Account 12,000.00
Dec. 1 Purchased a Computer, Equipment & Furniture from Staples for $75,000 (use the account
Office Equipment). Paid $25,000 in cash with the balance due on a Note Payable (principal and interest due in 6 months)
Debit Office Equipment 75,000.00 and Credit Checking Account 25,000.00 and Credit Notes Payable 50,000.00
Dec. 5 Purchased office supplies on Account from Office Maxx for $4,500. Payment is due in 15
days. These supplies are expected to last for several months.
Debit Office Supplies 4,500.00 and Credit Accounts Payable 4,500.00
Dec. 6 Purchased a 12 month business Insurance Policy for $4,800 from the Lakeside Agency.
Debit Unexpired Insurance 4,800.00 and Credit Checking Account 4,800.00
Dec. 7 Received $10,000 cash as advance payment for pest control services to be provided to
Shady Acres Retirement Community. (Use the Liability account: Unearned Exterminating
Fees.)
Debit Checking Account 10,000.00 and Credit Unearned Exterminating Fees 10,000.00
Dec. 18 Paid employee salaries for the first two weeks of December, $5000.
Debit Wages and Salaries 5,000.00 and Credit Checking Account 5,000.00
Dec. 18 Earned $30,000 in fees for exterminating services provided for the first two weeks of
December. $10,000 was received in cash and the remainder was billed to EEI’s customers
on Account (due in 10 days.)
Debit Accounts Receivable 20,000.00 and Debit Checking Account 10,000.00 and Credit Exterminating Fees Earned 30,000.00
Dec. 20 Paid the amount due to Office Maxx on account from the Dec. 5th
purchase.
Debit Accounts Payable 4,500.00 and Credit Checking Account 4,500.00
Dec. 27 EEI, Inc. was named, along with The Sunset Farm Condominium Complex , as a co-
defendant in a $30,000 lawsuit filed on behalf of Jenna Jeffries. Jeffries claims to have
gotten ill after EEI had sprayed the complex. The extent of the Corporation’s legal and
financial responsibility, if any, can not be determined at this time. (Note: this event does
not need a journal entry at this time, but may require disclosure in the notes accompanying
the financial statements.
Nothing at this time
Dec. 28 Received amount due on account from the December 18th
billing.
Debit Checking Account 20,000.00 and Credit Accounts Receivable 20,000.00
Dec. 30 Received a phone bill for the month of December from Verizon in the amount of $350.
The amount is due on January 18, 2013.
Debit Telephone and Internet 350 and Credit Accounts Payable 350
Dec. 30 Declared a cash dividend of 10 cents per share, payable on January 15, 2013.
Debit Dividends 2,000.00 and Credit Dividends Payable 2,000.00
Dec. 31 Earned $45,000 in fees for services apartment management services provided for the
second two weeks of December. $21,500 was received in cash and the remainder was
billed to EEI’s customers on Account (due in 12 days.)
Debit Accounts Receivable 23,500.00 and Debit Checking Account 21,500.00 and Credit Exterminating Fees Earned 45,000.00
Then we had to make Adjusting Entries
a. The advance payment for rent on December 1 covered a period of 6 months
Debit Rent 2,000.00 and Credit Prepaid Rent 2,000.00 (rent was 12,000.00 for a 6m period)
b. The Insurance Policy is for 12 months
Debit Insurance 400, and Credit Unexpired Insurance 400 (Insurace was 4800 for a 12m period)
c. The annual interest rate on the Note Payable to Staples is 6%
Debit Interest Expense 250 and Credit Interest Payable 250 ((50,000.00 X .06) / 12)
d. The Office Equipment is being depreciated by the straight-line method for a period of 10 years.
Debit Depreciation 625 and Credit Accumulated Depreciation Office Equipment 625 (75,000.00 / 120)
e. Office Supplies on hand on December 31 are estimated at $750.
Debit Office Supplies Expense 3,750.00 and Credit Office Supplies 3,750.00
f. During December, EEI, Inc. earned $1000 of the cleaning fees paid in advance by Shady Acres
Retirement Community on December 7th
Debit Unearned Exterminating Fees 1,000.00 and Credit Exterminating Fees Earned 1,000.00
g. Salaries earned by employees since last payroll are $5,500. The Salaries will be paid on 1/3/13.
Debit Wages and Salaries 5,500.00 and Credit Wages Payable 5,500.00
h. The Accountant estimates that the amount of Income Tax Payable will be $9500. These taxes
will be paid in 2013
Debit Income Tax Expense 9,500.00 and Credit Income Tax Payable 9,500.00
Total income = 76,000.00
Total Expenses = 17,000.00
Total Operating Profit = 59,000.00
Total Other Expenses = 10,375.00
Net Profit = 48,625.00
My Net profit should = 59,625.00
Can anyone help me find out where i messed up? I can not seem to find it :/
This post was edited by Garciaparra on Nov 25 2013 12:34am