Details of this Paper

Financial Accounting 1: Comprehensive Problem - Jessi's Creative Design

Description

solution


Question

Question;Financial Accounting 1Comprehensive ProblemAfter Creative Design's first month of operations your friend delivers to you a stack of invoices, check stubs, receipts and her first VISA-Business bill. You must decipher these in order to enter them into the accounts.After sorting through the source documents you make a list of transactions for the first month, April:1.Jessi invested her life savings in the company $10,000.2.Jessi purchased from Best Buy a computer and printer/ fax/ copier and monitor and software for $3500. She got a 12 month no interest credit arrangement and will make monthly payments to Best Buy. You decide this will all be equipment.3.Jessi set up a credit account with an office supply store for supplies, and purchased supplies including printer paper, CDs, and ink for the printer for $200. Jessi gave you the bill but she does not have to make a payment until month end.4.Jessi purchased a comfortable desk chair from a department store for $250. You decide this will be equipment.7.Jessi?s CPA gave her some tax advice so she decided to develop a logo and other advertising materials for her car and customers. She had them printed and had her car painted with the new logo. This cost Jessi $500. You decide this will be expensed.8.Jessi negotiated a business transaction with a local Mexican Restaurant just opening. She will work on a logo, menu, and flyers. The restaurant owner paid $200 down to be used against the first month?s bill. Jessi will bill the customer monthly based on her hours worked on the account.9.Jessi designed a flyer for a local bakery and was paid cash of $150.12.Jessi designed a CD cover for a friend who is a drummer in a local band. She was paid $400 for her work.14.Jessi designed some POS material for a local coop market. She billed them for $500 for her work.22.Jessi set up accounts to purchase stock photos for artwork and subscriptions $200. This is a prepaid asset until Jessi uses the photos.23.Jessi designed and set up a website, email account, etc for herself. She paid $240 to register everything and will expense $20 per month against this amount.24.Jessi wrote a check to herself to cover her rent and car insurance. $1,200.Enter the above transactions into the journal and post them to the T accounts. Prepare an adjusted trial balance.Month End Adjusting EntriesJessi is anxious to find out if she has earned any profits the first month of her operations. You have to adjust the accoutns to bring them up to date before you can prepare the financial statements. Enter the following adjusting entries into a general journal. Post the adjustments to the T accounts and prepare an adjusted trial balance.1. The depreciation on the equipment is $104.2. The supplies on hand at the end of the month are $150.3. The balance in the subscriptions web site is $175.4. The monthly amount for the web site and email account must be expensed.5. Jessi determined she performed $1,000 worth of work for the Mexican restaurant.6. Jessi made her first monthly payment on the computer to Best Buy, $292.7. Jessi made a payment for supplies to staples of $75.8. Jessi received a check from the local coop market of $250.9. Jessi worked on a business card and logo for a local quilting shop. She did not finished the work and there will be more work for this company so she billed them for 15 hours at $75 per hour.Financial Statements and Closing ProcessNow that the adjusting entries have been completed, posted, and an adjusted trial balance has been completed it is time to prepare the financial statements and go through the closing process.1. From the adjusted trial balance, prepare the income statement, statement of retained earnings and balance sheet.2. Prepare the closing entries. Post the closing entries to the T and prepare a post closing trial balance.

 

Paper#37667 | Written in 18-Jul-2015

Price : $52
SiteLock