ACCOUNTING

COMPREHENSIVE PROBLEM 1: THE ACCOUNTING CYCLE

Bob Night opened, “The General’s Favorite Fishing Hole.”  The fishing camp is open from April through September and attracts many famous college basketball coaches during the off-season.  Guests typically register for one week, arriving on Sunday afternoon and returning home the following Saturday afternoon.  The registration fee includes room and board, the use of fishing boats, and professional instruction in fishing techniques.  The chart of accounts for the camping operations is provided below.

The General’s Favorite Fishing Hole: Chart of Accounts

 

Assets   Revenues  
101 Cash 401 Registration Fees
142 Office Supplies    
144 Food Supplies Expenses  
145 Prepaid Insurance 511 Wages Expense
181 Fishing Boats 521 Rent Expense
181.1 Accum. Depr.–Fishing Boats 523 Office Supplies Expense
    524 Food Supplies Expense
Liabilities   525 Telephone Expense
202 Accounts Payable 533 Utilities Expense
219 Wages Payable 535 Insurance Expense
    536 Postage Expense
Owner’s Equity 542 Depr. Exp.–Fishing Boats
311 Bob Night, Capital    
312 Bob Night, Drawing    
313 Income Summary    

 

The following transactions took place during April 2015

Day Trans# Desc

1 1101 Night invested cash in business, $90,000.

1 1102 Paid insurance premium for six-month camping season, $9,000.

2 1103 Paid rent for lodge and campgrounds for the month of April, $40,000.

2 1104 Deposited registration fees, $35,000.

2 1105 Purchase ten fishing boats on account for $60,000. The boats have estimated useful lives of five years, at which time they will be donated to a local day camp. Arrangements were made to pay for the boats in July.

3 1106 Purchase food supplies from Acme Super Market on account, $7,000.

5 1107 Purchase office supplies from Gordon Office Supplies on account, $500.

7 1108 Deposited registration fee, $38,600.

10 1109 Purchased food supplies from Acme Super Market on account, $8,200

10 1110 Paid wages to fishing guides, $10,000

14 1111 Deposited registration fees, $30,500

16 1112 Purchased food supplies from Acme Super Market on account, $9,000

17 1113 Paid wages to fishing guides, $10,000

18 1114 Paid postage, $150.

21 1115 Deposited registration fees, $35,600

24 1116 Purchased food supplies from Acme Super Market on account, $8,500

24 1117 Paid wages to fishing guides, $10,000

28 1118 Deposited registration fees, $32,000.

29 1119 Paid wages to fishing guides, $10,000

30 1120 Purchased food supplies from Acme Super Market on account, $6,000.

30 1121 Paid Acme Super market on account, $32,700.

30 1122 Paid utilities bill, $2,000.

30 1123 Paid telephone bill, $1,200.

30 1124 Bob Night withdrew cash for personal use, $6,000.

 

 

 

Adjustment information for the end of April is provided below.

 

Office supplies remaining on hand, $100.

Food supplies remaining on hand, $8,000.

Insurance expired during the month of April, $1,500.

Depreciation on the fishing boats for the month of April, $1,000.

Wages earned, but not yet paid, at the end of April, $500.

 

Required:

Enter the transactions in a general journal. Enter transactions from April 1-5 on pages 1, April 7-18 on page 2, April 21-29 and the first two entries for April 30 on page 3, and the remaining entries for April 30 on page 4.

Post the entries to the general ledger.(if you are not using the working papers that accompany this text, you will need to enter the account titles and account numbers in the general leger accounts).

Prepare a trial balance on a work sheet.

Complete the work sheet.

Journalize the adjusting entries (page 5)

Post the adjusting entries to the general ledger.

Prepare the income statement.

Prepare the statement of owner’s equity

Prepare the balance sheet.

Journalize the closing entries (page 5 and 6)

Post the closing entries to the general ledger.

Prepare a post-closing trial balance.

COMPREHENSIVE PROBLEM 1, PERIOD 2: THE ACCOUNTING CYCLE

During the month of May 2015, The General’s Favorite Fishing Hold engaged in the following transactions.  These transactions required an expansion of the chart of accounts as showing below

 

The General’s Favorite Fishing Hole

 

Assets   Revenues  
101 Cash 401 Registration Fees
122 Accounts Receivable 404 Vending Revenue
142 Office Supplies    
144 Food Supplies Expenses  
145 Prepaid Insurance 511 Wages Expense
146 Prepaid Subscriptions 512 Advertising Expense
161 Land 521 Rent Expense
171 Building 523 Office Supplies Expense
171.1 Accum. Depr.–Buildings 524 Food Supplies Expense
181 Fishing Boats 525 Telephone Expense
181.1 Accum. Depr.–Fishing Boats 533 Utilities Expense
182 Surround Sound System 535 Insurance Expense
182.1 Accum. Depr.–Surround Sound Sys. 536 Postage Expense
183 Big Screen TV 537 Repair Expense
183.1 Accum. Depr.–Big Screen TV 540 Depr. Exp.–Buildings
    541 Depr. Exp.–Surround Sound Sys.
Liabilities   542 Depr. Exp.–Fishing Boats
202 Accounts Payable 543 Depr. Exp.–Big Screen TV
219 Wages Payable 546 Satellite Programming. Exp.
    548 Subscriptions Expense
Owner’s Equity    
311 Bob Night, Capital    
312 Bob Night, Drawing    
313 Income Summary

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