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ACC 121 Glorious Garden Lawn Service

ACC 121 Glorious Garden Lawn Service
1. Prepare the entries using the list of transactions. Put them in the general journal.
2. Post the journal entries from the general journal to the general ledger.
3. Prepare a trial balance using the general ledger totals.
4. Complete the work sheet using the information for adjustments.
5. Prepare financial statements from the worksheet.
6. Make the adjusting journal entries in the general journal.
7. Post the adjustments to the general ledger.
8. Make the appropriate closing entries in the general journal.
9. Post the closing entries to the general ledger.
10. Prepare a post-closing trial balance.
CHART OF ACCOUNTS
 
ASSETS
100 Cash-Checking
105 Cash-Savings
110 Accounts Receivable-Mr. Foster
111 Accounts Receivable-Ms. Sanchez
112 Accounts Receivable- Mr Grayson
120 Advertising Materials
130 Office Supplies
140 Landscaping Supplies
150 2004 Nissan Pickup Truck
51 Accumulated Depreciation-Lawn Equipment
 
LIABILITIES
200 Note Payable-Aunt Emma
210 Accounts Payable-Lovell Home & Garden Center
220 Accounts Payable-VISA
230 Interest Payable
240 Unearned Revenue
 
CAPITAL
300 Jay Stevens, Capital
310 Jay Stevens, Drawing
320 Income Summary
 
REVENUES
400 Lawn Care/Landscaping Revenue
410 Interest Revenue
 
EXPENSES
500 Landscaping Supplies Expense
510 Gas and Oil Expense
520 Telephone Expense
530 Advertising Expense
540 Office Supplies Expense
545 Interest Expense
550 Pickup Truck Maintenance
560 Equipment Rental Expense
570 Insurance Expense
580 Depreciation Expense-Pickup Truck
590 Depreciation Expense-Lawn Equipment
 
NARRATIVE OF TRANSACTIONS
1) 7/1 Jay opened two accounts at Union State Bank, using $3000 of his own money. He deposited 2,500 in a checking account and $500 into savings.
2) 7/2 Jay borrowed $6,000 from his Aunt Emma and signed a note with 8% interest. Under the terms of the note, he must make payments of $250 plus accrued interest on the first day of each month. Jay put $4,500 into his checking account and $1,500 into savings.
3) 7/3 Jay purchased a 2004 Nissan pickup truck by writing a check for $4,820.
4) 7/3 Jay purchased insurance for the pickup truck at a cost of $150 per month. He paid for the month of July.
5) 7/3 Jay established a cell phone account for the business. The phone was free, and he paid $75 for the first month's service.
6) 7/5 Jay returned to the bank an applied for a VISA care. He received a card with a $1,000 credit limit.
7) 7/5 Jay purchased a lawn mower and garden tools on account from Lovell Home & Garden Center. The total cost was $1,080. (Debit Lawn Equipment)
8) 7/6 Jay purchased $185 worth of gloves, stakes, trimmer lines, and other supplies at the local hardware store using his VISA card.
9) 7/6 Jay paid $80 cash from gas and oil for his pickup truck and the mower.
10) 7/7 A box of 500 additional checks arrived from the bank along with a memo that the $25 cost was charged to Jay's checking account. He considered this an immaterial amount and charged it all to Office Supplies Expense.
11) 7/7 Jay had 1,500 advertising flyers printed to promote his new business. The flyers cost $225 and are considered advertising materials. He also purchased $90 of office supplies. Jay used his VISA for all of these purchases.
12) 7/8 One of Jay's neighbors, Mr. Adams, is leaving town for six weeks. He paid Jay $360 to mow his lawn each week and keep his hedges trimmed while he is away.
13) 7/9 Jay paid $75 cash to rent some equipment needed for the Foster job (see transaction 15).
14) 7/10 Jay purchased another $60 of gas using his VISA card.
15)7/11 Jay completed a landscaping and clean-up job for Mr. Foster. He left Mr. Foster a bill for $720.
16) 7/13 Jay charged another $140 in landscaping supplies at Lovell Home & Garden Center.
17) 7/14 Jay completed a $550 job for Mrs. Sanchez. She had hired him to mow her lawn and create a perennial flower bed in the front of her house. Mrs. Sanchez paid him $250 and agreed to pay the rest later.
18) 7/15 Jay's girlfriend insisted that he take a break. He withdrew $120 from his checking account to go out for a nice evening with his girlfriend, Vanessa.
19) 7/16 Jay charged $110 on his VISA card for an oil change and some other minor maintenance on his truck.
20) 7/17 Jay paid Lovell Home & Garden Center $175 on his account. I have about 15 more entries, but there’s not enough characters in this question box. Please let me know if you can be of assistance. I will type in the rest of the entries and upload the Excel Template.
 
Instructions
Use this workbook to complete the Glorious Garden Lawn Service practice set for ACC121. There are 6 tabs that include the general journals, general ledger, worksheet, financial statements and post closing trial balance.
 
 
Read the introduction on page one of the practice set and follow the instructions on page two. The practice set is to be completed individually throughout the course with portions due during weeks three, four and five.
 
TUTORIAL PREVIEW
Glorious Garden Lawn Service
Post-Closing Trial Balance
July 31, 20--
 
 
 
Cash-Checking
2,398.00
 
Cash-Savings
2,770.00
 
Accounts Receivable-Mr. Foster
320.00
 
Accounts Receivable-Ms. Sanchez
150.00
 
 
File name: Glorious Garden.xls File type: doc PRICE: $40

E9-1 E9-7 E9-12 P9-7B ----- E9-1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011.

E9-1 E9-7 E9-12 P9-7B
 
E9-1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011.
1. Paid $5,000 of accrued taxes at time plant site was acquired.
2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit.
3. Paid $850 sales taxes on new delivery truck.
4. Paid $17,500 for parking lots and driveways on new plant site.
5. Paid $250 to have company name and advertising slogan painted on new delivery truck.
6. Paid $8,000 for installation of new factory machinery.
7. Paid $900 for one-year accident insurance policy on new delivery truck.
8. Paid $75 motor vehicle license fee on the new truck.
 
Instructions
(a) Explain the application of the cost principle in determining the acquisition cost of plant assets.
(b) List the numbers of the foregoing transactions, and opposite each indicate the account title to which each expenditure should be debited.
 
E9-7 Brainiac Company purchased a delivery truck for $30,000 on January 1, 2011.The truck has an expected salvage value of $2,000, and is expected to be driven 100,000 miles over its estimated useful life of 8 years.Actual miles driven were 15,000 in 2011 and 12,000 in 2012.
 
Instructions:
(a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method.
(b) Assume that Brainiac uses the straight-line method.
(1) Prepare the journal entry to record 2011 depreciation.
(2) Show how the truck would be reported in the December 31, 2011, balance sheet.
 
E9-12 The following are selected 2011 transactions of Franco Corporation.
Jan. 1 Purchased a small company and recorded goodwill of $150,000. Its useful life is indefinite. May 1 Purchased for $90,000 a patent with an estimated useful life of 5 years and a legal life of 20 years.
 
Instructions
Prepare necessary adjusting entries at December 31 to record amortization required by the events above.
 
P9-7B The intangible assets section of Time Company at December 31, 2011, is presented below. Patent ($100,000 cost less $10,000 amortization) $ 90,000
Copyright ($60,000 cost less $24,000 amortization) 36,000
Total $126,000
 
The patent was acquired in January 2011 and has a useful life of 10 years.The copyright was acquired in January 2008 and also has a useful life of 10 years.The following cash transactions may have affected intangible assets during 2012.
 
Jan. 2 Paid $45,000 legal costs to successfully defend the patent against infringement by another company.
Jan.–June Developed a new product, incurring $230,000 in research and development costs. A patent was granted for the product on July 1. Its useful life is equal to its legal life.
Sept. 1 Paid $125,000 to an Xgames star to appear in commercials advertising the company’s products. The commercials will air in September and October.
Oct. 1 Acquired a copyright for $200,000.The copyright has a useful life of 50 years.
 
Instructions:
(a) Prepare journal entries to record the transactions above.
(b) Prepare journal entries to record the 2012 amortization expense for intangible assets.
(c) Prepare the intangible assets section of the balance sheet at December 31, 2012.
(d) Prepare the note to the financials on Time’s intangibles as of December 31, 2012.
 
TUTORIAL PREVIEW
E9-7
(a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the
units-of-activity method, and (3) the double-declining balance method.
(a)
(1)
Straight-line method:
 
 
2011: ($30,000 – $2,000)/8 = $3,500
 
 
2012: ($30,000 – $2,000)/8 = $3,500
 
File name: E9-1 E9-7 E9-1 P9-7B.doc File type: doc PRICE: $15

Final Exam - Page 1 Question 1. - (TCO F) Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.

Page 1
 
Question 1.
(TCO F) Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.
Estimated machine hours                                             73,000
Estimated variable manufacturing overhead                $3.49 per machine hour
Estimated total fixed manufacturing overhead                         $838,770
 
Required:
Compute the company's predetermined overhead rate. (Points : 25)
 
Question 2
(TCO C) Enciso Corporation is preparing its cash budget for November. The budgeted beginning cash balance is $31,000. Budgeted cash receipts total $135,000 and budgeted cash disbursements total $141,000. The desired ending cash balance is $50,000. The company can borrow up to $100,000 at any time from a local bank, with interest not due until the following month.

Required:
Prepare the company's cash budget for November in good form. (Points : 25)
 
1. (TCO C) The following overhead data are for a department of a large company.
                                               Actual costs            Static
                                               Incurred                   budget
Activity level (in units)                800                         750
Variable costs:
             Indirect materials          $6,850                    $6,600
             Electricity                    $1,312                    $1,275
Fixed costs:
             Administration              $3,570                    $3,700
             Rent                            $3,320                    $3,200
 
Required
Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department.
 
2. (TCO D) Hanson, Inc. makes 1,000 units per year of a part called a "prositron" for use in one of its products. Data concerning the unit production costs of the prositron follow:
Direct materials                                                $342
Direct labor                                              80
Variable manufacturing OH                             48
Fixed manufacturing OH                       520
Total                                                    $990
 
An outside supplier has offered to sell Hanson, Inc. all of the prositrons it requires. If Hanson, Inc. decided to discontinue making the prositrons, 10% of the above fixed manufacturing overhead costs could be avoided.
 
Required:  Assume Hanson, Inc. has no alternative use for the facilities presently devoted to production of the prositrons. If the outside supplier offers to sell the prositrons for $850 each, should Hanson, Inc. accept the offer? Fully support your answer with appropriate calculations.
 
3. (TCO E) The following absorption costing income statement and additional data are available from the accounting records of Bernon Co. for the month ended May 31, 2007. During the accounting period, 17,000 units were manufactured and sold at a price of $60 per unit. There were no beginning inventories.
 
Sales (17,000 @ $60)                          $1,020,000
Cost of goods sold                                   612,000
Gross profit $ 408,000
Selling and administrative expenses          66,000
Income from operations                      $ 342,000
 
Additional Information:
Cost                                         Total Cost        Number of Units          Unit Cost
Manufacturing costs:
  Variable                                 $442,000         17,000                         $26
  Fixed                                       170,000         17,000                           10
  Total                                      $612,000                                             $36
 
Selling and administrative expenses:
   Variable ($2 per unit sold)                            $34,000
  Fixed                                                               32,000
  Total                                                              $66,000
 
Required
Prepare a new income statement for the year using variable costing. Comment on the differences, if any, between the absorption costing and the variable costing income statements.
 
4. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of Karmana Corporation for the just-completed year.
Sales ...............................................................$950
Raw materials inventory, beginning .....................$10
Raw materials inventory, ending .........................$30
Purchases of raw materials ...............................$120
Direct labor ......................................................$180
Manufacturing overhead ...................................$230
Administrative expenses ...................................$100
Selling expenses ...............................................$140
Work-in-process inventory, beginning ..................$50
Work-in-process inventory, ending ......................$40
Finished goods inventory, beginning ..................$100
Finished goods inventory, ending ........................$80  
 
 
Use these data to prepare (in thousands of dollars) a schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In addition, elaborate on the relationship between these schedules as they relate to the flow of product costs in a manufacturing company.
 
1. (TCO F) Loxham Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:
Work in process, beginning:
Units in beginning work in process inventory 400
Materials costs $6,900
Conversion costs $2,500
Percent complete for materials 80%
Percent complete for conversion 15%
Units started into production during the month 6,000
Units transferred to the next department during the month 5,400
Materials costs added during the month $112,500
Conversion costs added during the month $210,300
 
Ending work in process:
Units in ending work-in-process inventory 1,000
Percentage complete for materials 80%
Percentage complete for conversion 30%
 
Required
Calculate the equivalent units for materials for the month in the first processing department.
 
2. (TCO B) Longiotti Corporation produces and sells a single product. Data concerning that product appear below.
Selling price per unit                            $150.00
Variable expense per unit                    $36.00
Fixed expense per month                     $159,600
 
Required:
Determine the monthly break-even in total dollar sales. Show your work! 
 
3. (TCO G) - (Ignore income taxes in this problem.) Axillar Beauty Products Corporation is considering the production of a new conditioning shampoo that will require the purchase of new mixing machinery. The machinery will cost $375,000, is expected to have a useful life of 10 years, and is expected to have a salvage value of $50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul at the end of Year 6. A $40,000 increase in working capital will be needed for this investment project. The working capital will be released at the end of the 10 years. The new shampoo is expected to generate net cash inflows of $85,000 per year for each of the 10 years. Axillar's discount rate is 16%.
 
Required:
a.       What is the net present value of this investment opportunity?
b.      Based on your answer to (a) above, should Axillar go ahead with the new conditionings hampoo?
 
TUTORIAL PREVIEW
a.       What is the net present value of this investment opportunity?
Items
Year
Amount
16% Factor
Present value
Cost of machinery
0
$(375,000)
1.00
$(375,000)
Salvage value
10
$50,000
0.227
11,350
Overhaul
6
$(35,000)
0.41
(41,350)
 
File name: final exam.doc File type: doc PRICE: $35