ACC 201 Southern New Hampshire Milestone 2 Accounting Workbook Project II. Apply the accrual basis of accounting to correctly create adjusting entries in t

ACC 201 Southern New Hampshire Milestone 2 Accounting Workbook Project II. Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements: A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in the previous step to prepare the unadjusted trial balance portion of the “Trial Balance” tab in your workbook. B. Step Six: Complete the “Adjusting Entries” tab in your workbook using the Step Six data in the appendix. Note that you should take the adjusting entries from this worksheet and enter them into the “Trial Balance” tab in your workbook. C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance. Rubric Guidelines for Submission: Your completed accounting workbook should have all tabs fully and accurately populated in the provided Excel template.

Step Six Data (Click on the link to return to the prompt.)

On September 30, the following adjustments must be made:

 [Note: This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method.

 Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on $10,000 loan from parents.)

 Record insurance used for the year.

 Actual baking supplies on-hand as of September 30 are $1,100.

 Office supplies on-hand as of September 30 are $50. Print this page to use for your journal entries. Only accounts on this page can be used.
Asset Accounts
Acct #
Cash
Baking Supplies
Prepaid Rent
Prepaid Insurance
Baking Equipment
Office Supplies
Accounts Receivable
Accumulated Depreciation
Merchandise Inventory
101
102
103
104
105
106
107
108
109
This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and
journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource
for you.
ntries. Only accounts on this page can be used.
Liability Accounts
Equity Accounts
Acct #
Notes Payable
Accounts Payable
Wages Payable
Interest Payable
he appropriate accounts to record to as you are analyzing and
is nothing to complete on this page; this is simply a resource
for you.
201 Common Stock
202 Dividends
203
204
Revenue Accounts
Bakery Sales
Merchandise Sales
Expense Accounts
Baking Supplies Expense
Rent Expense
Insurance Expense
Misc. Expense
Business License Expense
Advertising Expense
Wages Expense
Telephone Expense
Interest Expense
Depreciation Expense
Office Supplies Expense
Cost of Goods Sold
s
Acct #
301
302
ts
Acct #
401
402
ts
Acct #
501
502
503
504
505
506
507
508
509
510
511
512
Peyton Approved
General Journal Entries
Jul-18
Date
Accounts
1-Jul Cash
Common Stock
1-Jul Baking Supplies
Accounts Payable
Debit
10,000.00
6,500.00
3-Jul Cash
Notes Payable
10,000.00
7-Jul Rent Expense
Prepaid Rent
Cash
1,500.00
1,500.00
10-Jul Business License Expense
Cash
375.00
11-Jul Misc. Expense
Cash
250.00
13-Jul Baking Equipment
Common Stock
6,000.00
13-Jul Advertsing Expense
Cash
200.00
14-Jul Office Supplies
Cash
300.00
30-Jul Telephone Expense
Accounts Payable
31-Jul Prepaid Insurance
Cash
31-Jul Wages Expense
Wages Payable
31-Jul Cash
Accounts Receivable
75.00
2,400.00
120.00
10,000.00
5,000.00
Bakery Sales
Total
54,220.00
108,440.00
Put entries in shaded cells
Credit
10,000.00
6,500.00
10,000.00
3,000.00
375.00
250.00
6,000.00
200.00
300.00
75.00
2,400.00
120.00
15,000.00
54,220.00
108,440.00
Peyton Approved
General Journal Entries
Aug-18
Date
5-Aug Wages Payable
Cash
Accounts
Debit
120.00
8-Aug cash
AccountsPayable
3,800.00
10-Aug Accounts Payable
Cash
75.00
15-Aug Baking Supplies
Accounts Payable
5,000.00
15-Aug Wages Expense
Wages Payable
480.00
15-Aug Rent Expense
Cash
1,500.00
18-Aug Cash
Accounts Receivable
3,000.00
20-Aug Accounts Payable
Cash
8,500.00
20-Aug Wages Payable
Cash
480.00
22-Aug Office Supplies
Cash
300.00
31-Aug Telephone Expense
Accounts Payable
31-Aug Wages Expense
Wages Payable
31-Aug Cash
Accounts Receivable
Bakery Sales
75.00
420.00
12,500.00
7,500.00
Total
43,750.00
Put entries in shaded cells
Credit
120.00
3,800.00
75.00
5,000.00
480.00
1,500.00
3,000.00
8,500.00
480.00
300.00
75.00
420.00
20,000.00
$ 43,750.00
Peyton Approved
General Journal Entries
Sep-18
Date
1-Sep Dividends
Cash
Accounts
5-Sep Wages Payable
Cash
7-Sep Merchandise Inventory (10 x$6)
Cash
8-Sep Cash
Accounts Receivable
Debit
10,000.00
10,000.00
420.00
420.00
60.00
60.00
4,000.00
4,000.00
10-Sep Accounts Payable
Cash
75.00
11-Sep Baking Supplies
Accounts Payable
7,000.00
13-Sep Accounts Payable
Cash
5,000.00
15-Sep Wages Expense
Wages Payable
15-Sep Rent Expense
Cash
Credit
75.00
7,000.00
5,000.00
456.00
456.00
1,500.00
1,500.00
15-Sep Cash (8 x $8.50)
Merchandise Sales
68.00
15-Sep Cost of Goods
Merchandise Inventory
48.00
68.00
48.00
20-Sep Wages Payable
Cash
456.00
20-Sep Merchandise Inventory (20 x $6.10)
Cash
122.00
456.00
122.00
24-Sep Cash
Merchandise Sales
153.00
24-Sep Cost of Goods Sold ( 2 x $6)+(16 x $6.10)
Merchandise Inventory
109.60
30-Sep Merchandise Inventory (25 x $6.05)
Cash
151.25
30-Sep Wages Expense
Wages Payable
480.00
30-Sep Cash
Accounts Receivable
Bakery Sales
Total
153.00
109.60
151.25
480.00
14,000.00
6,000.00
50,098.85
20,000.00
50,098.85
Put entries in shaded cells
FIFO
USE THIS ONE FOR THE SEPTEMBER ENTRIES
Date
Purchases
7-Sep
10 $ 6.00 $
60.00
15-Sep
20-Sep
20 $
6.10 $
25 $
7-Sep
6.05 $
151.25
$
333.25
Purchases
10 $ 6.00 $
24-Sep
6.10 $
2
2
20
22
26
6.00 $
6.10 $
$
$
12.00
97.60
109.60
157.60
60.00
4
4
25
29
29
10
8 $
20 $
48.00
Sales
15-Sep
20-Sep
6.00 $
122.00
2 $
16 $
55
LIFO
10
8 $
24-Sep
30-Sep
Sales
6.00 $
48.00
122.00
2
2
20
22
18 $
6.10 $
109.80
2
2
4
30-Sep
25 $
55
weighted average
7-Sep
6.05 $
151.25
$
333.25
Purchases
10 $ 6.00 $
6.10 $
10
55
48.00
6.05 $
151.25
$
333.25
2
2
20
22
18 $
25 $
6.00 $
122.00
24-Sep
30-Sep
157.80
60.00
8 $
20 $
$
Sales
15-Sep
20-Sep
26
2
2
25
29
29
26
6.09 $
109.62
157.62
4
4
25
29
$
Ending Inventory
6.00 $
60.00
$
6.00 $
12.00
$
$
6.00 $
6.10 $
$
12.00
122.00
134.00
$
6.10 $
24.40
$
$
6.10 $
6.05 $
$
$
24.40
151.25
175.65
175.65
Ending Inventory
$ 6.00 $
60.00
$
6.00 $
12.00
$
$
6.00 $
6.10 $
$
12.00
122.00
134.00
$
$
6.00 $
6.10 $
$
12.00
12.20
24.20
7-Sep Merchandise Inventory (10 x $6)
Cash
Purchased inventory
Dr
60.00
15-Sep Cash (8 x $8.50)
Merchandise Sales
Record sale of inventory
68.00
15-Sep Cost of Goods Sold (8 X $6)
Merchandise Inventory
Recorded the cost of goods sold
48.00
20-Sep Merchandise Inventory (20 x $6.10 )
Cash
122.00
24-Sep Cash (18 x 8.50)
Merchandise Sales
Record sale of inventory
153.00
24-Sep Cost of Goods Sold (2 x $6)+(16 x $6.10)
Merchandise Inventory
Recorded the cost of goods sold
109.60
30-Sep Merchandise Inventory (25 x $6.05)
Cash
151.25
7-Sep Merchandise Inventory (10 x $6)
Cash
Purchased inventory
60.00
15-Sep Cash (8 x $8.50)
Merchandise Sales
Record sale of inventory
68.00
15-Sep Cost of Goods Sold (8 X $6)
Merchandise Inventory
Record inventory reduction due to sale
48.00
20-Sep Merchandise Inventory (20 x $6.10)
122.00
$
$
$
6.00 $
6.10 $
6.05 $
$
$
12.00
12.20
151.25
175.45
175.45
Ending Inventory
$ 6.00
$60
$
$
$
6.00 $
6.00 $
6.10 $
$
$
$
$
6.05 $
$
Cash
24-Sep Cash (18 x 8.50)
Merchandise Sales
Record sale of inventory
153.00
24-Sep Cost of Goods Sold (18 x $6.10)
Merchandise Inventory
Record inventory reduction due to sale
109.80
30-Sep Merchandise Inventory (25 x $6.05)
Cash
151.25
7-Sep Merchandise Inventory (10 x $6)
Cash
Purchased inventory
60.00
12.00
12.00
122.00 per unit
134.00 $6.09
24.38
151.25
151.25 $5.22
15-Sep Cash (8 x $8.50)
Merchandise Sales
Record sale of inventory
68.00
15-Sep Cost of Goods Sold (8 X $6)
Merchandise Inventory
Record inventory reduction due to sale
48.00
20-Sep Merchandise Inventory (20 x $6.10)
Cash
122.00
24-Sep Cash (18 x 8.50)
Merchandise Sales
Record sale of inventory
153.00
24-Sep Cost of Goods Sold (18 x $6.09)
Merchandise Inventory
Record inventory reduction due to sale
109.62
30-Sep Merchandise Inventory (25 x $6.05)
Cash
151.25
Cr
60.00
68.00
48.00
122.00
153.00
109.60
151.25
60.00
68.00
48.00
Purchases
9/7: 10 bottles purchased at $6
9/20: 20 bottles purchased at $6.10
9/30 : 25 bottles purchased at $6.05
Sales – selling price, $8.50 a bottle
9/15: 8 bottles
9/24: 18 bottles
122.00
153.00
109.80
151.25
60.00
68.00
48.00
122.00
153.00
109.62
151.25
date
1-Jul
3-Jul
Cash
10,000.00
10,000.00
31-Jul
10,000.00
8-Aug
3,800.00
18-Aug
31-Aug
8-Sep
15-Sep
24-Sep
30-Sep
Balance
11-Jul
Balance
date
3,000.00
375.00
250.00
200.00
300.00
2,400.00
7-Jul
10-Jul
11-Jul
13-Jul
14-Jul
31-Jul
120.00
5-Aug
75.00
10-Aug
1,500.00
8,500.00
480.00
300.00
15-Aug
20-Aug
20-Aug
22-Aug
10,000.00
420.00
60.00
1-Sep
5-Sep
7-Sep
75.00
5,000.00
1,500.00
10-Sep
13-Sep
15-Sep
456.00
20-Sep
122.00
20-Sep
151.25
30-Sep
date
Notes Payable
10,000
–
date
3-Jul
10,000.00
10,000.00 Balance
3,000.00
31-Jul
12,500.00
31-Aug
30-Sep
Accounts Rec.
5,000.00
3,800.00
3,000.00
7,500.00
4,000.00
6,000.00
4,000.00
Balance
18,500.00
7,700.00
10,800.00
68.00
153.00
14,000.00
67,521.00
32,236.75
35,284.25
Misc. expense
250.00
250.00
250.00
13-Jul
Balance
Baking equipment
6,000
6,000.00
6,000.00
–
8-Aug
18-Aug
8-Sep
1-Jul
15-Aug
11-Sep
Balance
7-Jul
Balance
10-Aug
20-Aug
10-Sep
13-Sep
Baking supplies
6,500
5,000
7,000
18,500.00
18,500.00
Balance
Prepaid rent
1,500
1,500.00
1,500.00
31-Jul
Balance
Accounts payable
6,500.00
75
75
5,000
8,500
75
75
7,000.00
5,000
13,650
30-Jul
31-Aug
14-Jul
22-Aug
1-Jul
30-Jul
15-Aug
150
150
–
–
Prepaid insurance
2,400
2,400.00
2,400.00
–
Wages expense
120
480
420
456
480
11-Sep
Balance
1-Sep
Balance
Balance
600.00
600.00
31-Aug
18,650
5,000 Balance
Telephone expense
75
75
31-Jul
15-Aug
31-Aug
15-Sep
30-Sep
Office supplies
300
300
1,956
1,956
–
Dividends
10,000
10,000
10,000
–
baking supplies expense
misc supplies expense
Merchandise Sales
68.00
153.00
–
15-Sep
24-Sep
221
221 Balance
Business License exp
10-Jul 375.00
Balance
375.00
375.00
Common Stock
10,000
1-Jul
6,000
13-Jul
16,000.00
16,000.00 Balance
–
Insurance expense
13-Jul
Balance
Advertising expense
200.00
200.00
200.00
–
7-Jul
15-Aug
15-Sep
Balance
Rent expense
1,500
1,500
1,500
4,500.00
4,500.00
–
Bakery Sales
15,000
31-Jul
20,000
31-Aug
20,000
30-Sep
55,000.00
55,000.00 Balance
Wages payable
5-Aug
31-Jul
480
15-Aug
420
31-Aug
456.00
15-Sep
480.00
30-Sep
120
20-Aug
480
5-Sep
420
20-Sep
120
456
1,476
1,956
480 Balance
depreciation expense
acc dep
Interest expense
15-Sep
24-Sep
Balance
7-Sep
20-Sep
30-Sep
Balance
COGS FIFO
48.00
109.60
157.60
157.60
Merch. Inv. FIFO
60.00
48.00
122.00
109.60
151.25
333.25
157.60
175.65
Interest payable
–
15-Sep
24-Sep
Account
Cash
Baking Supplies
Merchandise Inventory (FIFO)
Prepaid Rent
Prepaid Insurance
Baking Equipment
Accumulated Depreciation
Office Supplies
Accounts Receivable
Notes Payable
Interest Payable
Accounts Payable
Wages Payable
Common Stock
Dividends
Bakery Sales
Merchandise Sales
Baking Supplies Expense
Rent Expense
Interest Expense
Insurance Expense
Depreciation Expense
Misc. Expense
Office Supplies Expense
Business License Expense
Advertising Expense
Wages Expense
Telephone Expense
COGS (FIFO)
Total: (FIFO)
Peyton Approved
Trial Balance
2018
Unadjusted trial balance
Debit
Credit
32,236.75
18,500.00
175.65
1,500.00
2,400.00
6,000.00
600.00
7,700.00
10,000.00
5,000.00
480.00
16,000.00
10,000.00
55,000.00
221.00
4,500.00
250.00
375.00
200.00
1,956.00
150.00
157.60
86,701.00
86,701.00
Approved
Balance
018
Adjusting entries
Debit
Credit
250.00
250.00
250.00
250.00
Adjusted trial balance
Debit
Credit
32,236.75
18,500.00
175.65
1,500.00
2,400.00
6,000.00
250.00
600.00
7,700.00
10,000.00
5,000.00
480.00
16,000.00
10,000.00
55,000.00
221.00
4,500.00
250.00
250.00
375.00
200.00
1,956.00
150.00
157.60
86,951.00
86,951.00
Peyton Approved
Adjusting Journal Entries
2018
Date
Accounts
30-Sep Depreciation Expense
accumulated depreciation
Debit
250
Credit
250.00
30-Sep
30-Sep
30-Sep
30-Sep
250.00
250.00
Put entries in shaded cells
Peyton Approved
Income Statement
For Qtr. Ending 9/30/2018
Revenues:
Total Revenues
Cost of Goods Sold
Gross Profit (FIFO)
–
Operating Expenses:
Total Operating Expenses:
–
Net Income (FIFO)
–
Peyton Approved
Statement of Retained Earnings
For Qtr. Ending 9/30/2018
Beginning Balance:
plus Net Income (FIFO)
less Dividends:
Ending Balance (FIFO):
–
–
Peyton Approved
Balance Sheet
As of September 30, 2018
Assets
Current Assets:
Total Current Assets
–
Long-Term/Fixed Assets:
Less Accumulated Depreciation
Total Long-Term/Fixed Assets
Total Assets:
–
–
Peyton Approved
Balance Sheet
As of September 30, 2018
Liabilities and Owners’ Equity
Current Liabilities:
Total Current Liabilities
–
Long-Term Liabilities:
Total Long-Term Liabilities:
–
Total Liabilities:
–
Equity:
Total Equity
–
Total Liabilities & Equity
–
Peyton Approved
Closing Entries
Qtr ending 9/30/2018
Date
Accounts
30-Sep Bakery Sales
Merchandise Sales
Income Summary
30-Sep Income Summary (FIFO)
Baking Supplies Expense
Rent Expense
Wages Expense
Office Supplies Expense
Business License Expense
Misc. Expense
Depreciation Expense
Insurance Expense
Advertising Expense
Interest Expense
Telephone Expense
COGS FIFO
30-Sep Income Summary (FIFO)
Retained Earnings FIFO
30-Sep Retained Earnings
Dividends
Debit
Credit
Peyton Approved
Post Closing Trial Balance
Qtr. Ending 9/30/2018
Account
Unadjusted Trial Balance
Debit
Cash
Baking Supplies
Merchandise Inventory (FIFO)
Prepaid Rent
Prepaid Insurance
Baking Equipment
Accumulated Depreciation
Office Supplies
Accounts Receivable
Accounts Payable
Wages Payable
Interest Payable
Notes Payable
Common Stock
Retained Earnings FIFO
Totals
–
adjusted Trial Balance
Credit
–
Peyton Approved
Reversing Entries
Qtr ending 9/30/2018
Date
Accounts
30-Sep Interest Payable
Interest Expense
Debit
150.00
These are given to you. No other entries are needed.
Credit
150.00
ACC 201 Milestone Two Guidelines and Rubric
Overview: In this milestone, you will move through the next phase of the accounting cycle by creating the trial balance, adjusting entries, and adjusted trial
balance. Completing the adjusting entries implements the matching, timing, and periodicity of the generally accepted accounting principles. Omission of this
step will show a higher net income than there actually is, which could cause users of the financial statements to make an incorrect decision and suffer financially.
Prompt: You will find the provided data for your second milestone in the appendix at the end of this document. The data have been separated from the prompt
so that you can more easily view the full scope of this assignment. Links have been provided to help you locate the information.
Specifically, the following critical elements must be addressed:
I.
II.
Incorporate the feedback that you received from your Milestone One submission on Steps 1–4.
A. Step One: Complete the “July Journal Entries” tab in your workbook using the Step One data in the appendix.
B. Step Two: Complete the “August Journal Entries” tab in your workbook using the Step Two data in the appendix.
C. Step Three: Complete the “September Journal Entries” tab in your workbook using the Step Three data and updated scenario information in the
appendix. Note that there was an additional line of products added this month, so you must first complete the “Inventory Valuation” tab in your
workbook and copy the journal entries from the inventory evaluation page into your journal for this month to ensure the impact of
merchandising is reflected in your reporting.
D. Step Four: Transfer posted entries to T accounts.
Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements:
A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in the previous step to prepare the
unadjusted trial balance portion of the “Trial Balance” tab in your workbook.
B. Step Six: Complete the “Adjusting Entries” tab in your workbook using the Step Six data in the appendix. Note that you should take the adjusting
entries from this worksheet and enter them into the “Trial Balance” tab in your workbook.
C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected
accounts in the unadjusted trial balance to arrive at the adjusted trial balance.
Rubric
Guidelines for Submission: Your completed accounting workbook should have all tabs fully and accurately populated in the provided Excel template.
Critical Elements
Incorporate the
Feedback
Evident (100%)
Not Evident (0%)
Fully incorporates feedback from Fails to incorporate feedback
Milestone One on Steps 1–4 of
from Milestone One on Steps 1–
the workbook
4 of the workbook
Value
25
Apply the Accrual
Basis of Accounting:
Step Five
Prepares the unadjusted trial
balance
Does not prepare the unadjusted
trial balance
25
Apply Accrual Basis of Prepares the adjusting entries
Accounting: Step Six
Does not prepare the adjusting
entries
25
Apply Accrual Basis of Prepares the adjusted trial
Accounting: Step
balance
Seven
Does not prepare the adjusted
trial balance
25
Total
100%
Appendix: Workbook Data for Milestone Two
Step One Data (Click on the link to return to the prompt.)
The following events occur in July, 2018:
July 1: You take $10,000 from your personal savings account and buy common stock in Peyton Approved.
July 1: Purchase $6,500 in baking supplies from vendor, on account.
July 3: Your parents lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.
July 7: Enter into a lease agreement for bakery space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of
$1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective July 1, 2018, through June 30, 2019.
July 10: Pay $375 to the county for a business license.
July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).
July 13: You have baking equipment, including an oven and mixer, which you have been using for your home-based business and will now start using in
the bakery. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional
common stock. The equipment has a 5-year useful life.
July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising.
July 14: Pay $300 for office supplies.
July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays
being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for
informational purposes only.)
July 30: Received telephone bill for July in amount of $75. Payment is due on August 10.
July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2018, through July 31, 2019.
July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below).
July 31: Total July bakery sales were $15,000. $5,000 of these sales are on accounts receivable.
Step Two Data (Click on the link to return to the prompt.)
The following events occur in August, 2018:
August 5: Paid employee for period ending 7/31.
August 8: Receive payments from customers towards accounts receivable in amount of $3,800.
August 10: Paid July telephone bill.
August 15: Purchase additional baking supplies in amount of $5,000 from vendor, on account.
August 15: Accrue wages earned for employee from period of 1st through 15th of August (Wage calculations table provided below).
August 15: Pay rent on bakery space.
August 18: Receive payments from customers towards accounts receivable in amount of $3,000.
August 20: Paid $8,500 toward baking supplies vendor payable.
August 20: Pay employee for period ending 8/15.
August 22: $300 in office supplies purchased.
August 31: Received telephone bill for August in amount of $75. Payment is due on September 10.
August 31: Accrue wages earned for employee for period of August 16th through August 31st (Wage calculations table provided below).
August 31: August bakery sales total $20,000. $7,500 of this total is on accounts receivable.
Step Three (Click on the link to return to the prompt.)
Updated Scenario: Many customers have been asking for more hypoallergenic products, so in September you start carrying a line of hypoallergenic shampoos on
a trial basis. The following information relates to the purchase and sales of the shampoo:

You use …
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