CASE STUDY 1 -THE COMPLETE ACCOUNTING CYCLE Name: ___________________________________

The Entire Case Study is due Sunday at Midnight Mountain time at the end of Week 3. This Case Study is worth 100 points or 10% of your final course grade. This Case Study relates to TCO's D and E and Chapters 3 and 4. MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. There are 10 Sheets in the Workbook including this one. All of the Information you need for the Project is located in this Workbook. Requirements Requirement 1 - Prepare the Journal Entries in the General Journal Requirement 2 - Post Journal Entries to the General Ledger Requirement 3 - Prepare a Trial Balance Requirement 4 - Prepare the Adjusting Entries Requirement 5 - Post Adjusting Entries to the General Ledger Requirement 6 - Prepare an Adjusted Trial Balance Requirement 7 - Prepare the Financial Statements Requirement 8 - Prepare the Closing Entries Requirement 9 - Post Closing Entries to the General Ledger Requirement 10 - Prepare the Post Closing Trial Balance Sheet in Workbook Journal Entries General Ledger Trial Balance Adjusting Entries General Ledger Adjusted TB Financial Statements Closing Entries General Ledger Post Closing TB

Hint for success: review the Week 2 Lecture 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
Hints are provided for the following balances: 1) The debits for the journal entries on the Journal Entries tab 2) The credits for the journal entries on the Journal Entries tab 3) The cash balance on the General Ledger tab 4) The debits for the trial balance on the Trial Balance tab 5) The credits for the trial balance on the Trial Balance tab 6) The debits for the adjusted trial balance on the Adjusted Trial Balance tab 7) The credits for the adjusted trial balance on the Adjusted Trial Balance tab 8) Net Income for the Income Statement on the Financial Statements tab 9) Retained earnings as of July 31 on the Financial Statements tab 10) Total assets for the Balance Sheet on the Financial Statements tab 11) Total liabilities and shareholders' equity for the Balance Sheet on the Financial Statements tab 12) The debits for the post-closing trial balance on the Post-Closing Trial Balance tab 13) The credits for the post-closing trial balance on the Post-Closing Trial Balance tab

s project. he worksheet tabs. of the cell to read the hint.

During its first month of operation, the Parkview Landscaping Corporation, which specializes in residential landscaping, completed the following transactions: July 1 Began business by making a deposit in a company bank account of $24,000, in exchange for 4,800 shares of $5 par value common stock. Debit Cash 24,000 Paid the premium on a one-year insurance policy, $2,400. Paid the current month's rent, $2,080. Prepaid Insurance (Debit) 2400 Rent Expense (Debit)

July 1 July 1 July 3

Purchased landscaping equipment from Brookwood Company, $8,800. Paid $1,200 down and the balance was placed on account. Payments will be $400.00 per month for nineteen months. The first payment is due 8/1. Note: Use Accounts Payable for the Balance Due. Debit Landscaping Equipment 8,800 Purchased landscaping supplies from Lakeside Company on credit, $780. Paid utility bill for July, $308. Debit Utility Expense 308 Debit Landscaping Supplies $780

July 8 July 12 July 16 July 19 July 31 July 31

Credit Cash 308 Debit Cash 2,724

Received cash for landscaping revenue for the first half of July, $2,724. Made payment on account to Lakeside Company, $400.

Debit Accounts Payable 400 Debit Cash 2,620

Received cash for landscaping revenue for the last half of July, $2,620. Declared and paid cash dividend of $1,600.

Debit Retained Earnings 1,600

Prepare journal entries to record the July transactions in the General Journal below. General Journal for Parkview Landscaping Corporation Description(Account Name) Debit Credit

Date 2011

1-Jul Cash Common Stock 1-Jul Prepaid Insurance Cash 1-Jul Rent Expense Cash 3-Jul Landscaping Equipment Cash Accounts Payable 8-Jul Landscaping Supplies

24000 24000 2400 2400 2080 2080 8800 1200 7600 780

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 (111) 24000 2724 2620

Landscaping Revenue (411) 2400 2080 1200 308 400 1600 2724 2620

5,344.00

21,356.00

Prepaid Insurance (117) 2400

200

Rent Expense (511) 2080

2,200.00 Landscaping Supplies (119) 780

2,080.00 Utility Expense (512) 308

392

388.00 Landscaping Equipment (144) 8800

308.00 Insurance Expense (513) 200

8,800.00 Accum. Depr.-Equipment (145) 140

200.00 Supplies Expense (514) 392

140

392

Accounts Payable (212) 400

7600 780

Depreciation Expense (515) 140

7,980.00

140 Income Taxes Expense (516)

Income Taxes Payable (213)

80

80

80 Common Stock (311) 24000

80

24,000.00

Retained Earnings (312)

Dividends (313) 1600

1,600.00

REQUIREMENT #3: Prepare a trial balance for July in the space below.

Parkview Landscaping Corporation Trial Balance July 31

DR Cash Prepaid Insurance Landscaping Supplies Landscaping Equipment Accounts Payable Common Stock Landscaping Revenue Rent Expense Insurance Expense Utility Expense Dividend Paid 21356 2200 780 8800

CR

7980 24000 5344 2080 200 308 1600

37324

37324

Assets = Liabilities + [Common Stock + Retained Earnings + (Revenue - Expenses) - Dividends]

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 landscaping supplies is $388. c) The estimated depreciation on landscaping equipment is $140. d) The estimated income taxes are $80. General Journal Date Description(Account Name) 31-Jul Insurance Expense Prepaid Insurance 31-Jul Supplies Expense Landscaping Supplies 31-Jul Income Tax Expense Income Tax Payable 31-Jul Depreciation Expense Accumulated Depreciation

Debit 200

Credit 200 392 392 80 80 140 140 812 812

Requirement #5: Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances. Just add to the balances that are already listed.

Requirement #6: Prepare an Adjusted Trial Balance in the space below. Parkview Landscaping Corporation Adjusted Trial Balance July 31

Description Cash Prepaid Insurance Landscaping Supplies Landscaping Equipment Accounts Payable Income Tax Payable Accumulated Depreciation Common Stock Landscaping Revenue Dividend Paid Rent Expense Utility Expense Insurance Expense Income Tax Expense Depreciation Expense Supplies Expense

DR 21356 2200 388 8800

CR

7980 80 140 24000 5344 1600 2080 308 200 80 140 392 37544

37544

Assets = Liabilities + [Common Stock + Retained Earnings + (Revenue - Expenses) - Dividends]

Requirement #7: Prepare the financial statements for Parkview Landscaping 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 Project. Parkview Landscaping Corporation Balance Sheet July 31 Assets: Cash Prepaid Insurance Landscaping Supplies Landscaping Equipment Less: Accum. Depr. Total Assets Liabilities: Accounts Payable Income Taxes Payable Total Liabilities Stockholders' Equity: Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & Stockholders' Equity Parkview Landscaping Corporation Statement of Retained Earnings For the Month Ending July 31 Retained Earnings, July 1 Add: Net Income Subtotal Less: Dividends Retained Earnings, July 31

$ 21,356 2,200 388 8,800 -140 32,604

2,144 1,600 $ 544

7,980 80 8,060 24,000 544 24,544 $ 32,604

space below. alance Sheet. Parkview Landscaping Corporation Income Statement For the Month Ending July 31 Revenues: Landscaping Revenue Expenses: Rent Expense Utility Expense Insurance Expense Supplies Expense Depreciation Expense Income Taxes Expense Total Expenses Net Income

$ 5,344

2,080 308 200 392 140 80 3,200 $ 2,144

Requirement #8: Prepare the closing entries at July 31 in the General Journal below. Hint: use the balances for each account which appear on the Adjusted Trial Balance for your closing entries. General Journal Description (Account Name) Rent Expense Income Summary Supplies Expense Income Summary Income Tax Expense Income Summary Insurance Expense Income Summary Utility Expense Income Summary Depreciation Expense Income Summary Dividends Income Summary

Date 31-Jul 31-Jul 31-Jul 31-Jul 31-Jul 31-Jul 31-Jul

Debit 2080

Credit 2080 392 392 80 80 200 200 308 308 140 140 1600 1600 4800 4800

Requirement #9: Post the closing entries to the General Ledger T-accounts and compute ending balances. Just add to the adjusted balances already listed.

Requirement #10: Prepare a post-closing trial balance as of July 31 in the space below.

Parkview Landscaping Corporation Post-Closing Trial Balance July 31 Descriptions Cash Landscaping Equipment Landscaping Supplies Prepaid Insurance Account Payables Income Tax Payables Accunulated Depreciation Common Stock Revenue DR 21356 8800 388 2200 7980 80 140 24000 544 32744 32744 CR

Case Study 1 Rubric Please note that this rubric provides a general guideline but you can score anywhere between 0 and the maximum number of points for that step depending on the accuracy and completeness of your work.
Criteria

Outstanding

Good
Minor errors such as incorrect account names or credits listed prior to debits.

Poor

Very Poor

Journal - Prepared Entries use accurate Journal Entries (20 accounts and amounts; and pts) debits and credits are used correctly.

Step 1

Errors in Evidence of an attempt to complete computations that the journal entries. resulted in incorrect amounts to be debited and credited.

Step 2
-Posted to the General Ledger. (10 pts)

Step 3
-Prepared a Trial Balance (10 pts)

20 pts Posting is correct leading to accurate account balances. 10 pts Correct account names and balances so to arrive at a correct trial balance.

16 pts Posting is mostly correct but minor errors are evident. 8 pts Some minor errors such as incorrect account names or incorrect totals due to errors in prior steps. 8 pts Journal Entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

12 pts 8 pts Posting has Posting is done poorly but does show several errors that evidence of an attempt to complete. resulted in incorrect account balances. 6 pts 4 pts Errors in Evidence of an attempt to complete computations that the trial balance. resulted in incorrect amounts to be debited and credited.

10 pts Journal Entries use -Prepared accurate Adjusting accounts and Journal Entries (10 amounts; and debits and pts) credits are used correctly.

Step 4

6 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

4 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

10 pts Posting is Step 5&6 -Posted and correct Prepared an leading to an Unadjusted accurate trial balance. Trial Balance. (10 pts)

8 Posting is mostly correct leading to a mostly correct trial balance.

6 Posting has several errors leading to a trial balance with several errors.

4 pts Posting is done poorly or not at all, leading to inaccurate or no trial balance.

Prepared an Unadjusted Trial Balance. (10 pts)

Step 7
-Prepared Financial Statements (20 pts)

10 pts All three Financial Statements are prepared accurately and in an appropriate format.

8 pts Two of the three financial Statements are prepared accurately and mostly in an appropriate format, one statement has some errors. 16 pts Journal Entries mostly use accurate accounts and amounts; and debits and credits are used correctly.

6 pts One of the three Financial Statements are prepared accurately and mostly in an appropriate format, two statements have some errors.

4 pts One or fewer of four Financial Statements are prepared accurately and mostly in an appropriate format, three or all statements have some errors.

20 pts Journal Step 8 Entries use -Prepared accurate Closing accounts and Journal Entries (10 amounts; and debits and pts) credits are used correctly. 10 pts Step 9&10 Posting is -Posted and correct leading to an Prepared accurate trial postclosingTrial balance. Balance. (10 pts) 10 pts

12 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are only somewhat used correctly.

8 pts Journal Entries have some errors in use of accounts and amounts; and debits and credits are not used correctly.

8 pts Posting is mostly correct leading to a mostly correct trial balance.

6 pts Posting has several errors leading to a trial balance with several errors.

4 pts Posting is done poorly or not at all, leading to inaccurate or no trial balance.

8 pts

6 pts

4 pts

Total Points Earned Out of 100 Points

ywhere between 0 and completeness

Points Awarded