The Lawn Ranger Landscaping Service
Instructions
1. Familiarize yourself with the contents of this
booklet before you begin.
2. Read through the chart of accounts.
3. Prepare the entries using the list of
transactions. Put them in the general journal.
4. Post the journal entries from the general
journal to the general ledger.
5. Prepare a trial balance using the general
ledger totals. Put it on the work sheet.
6. Complete the work sheet using the information
for adjustments.
7. Prepare the financial statements from the work
sheet.
8. Make the adjusting journal entries in the
general journal.
9. Post the adjustments to the general ledger.
10. Make the appropriate closing entries in the
general journal.
11. Post the closing entries to the general ledger.
12. Prepare a post-closing trial balance.
THE LAWN RANGER LANDSCAPING SERVICE
CHART OF ACCOUNTS
ASSETS
100 CashChecking 105 CashSavings 110
Accounts ReceivableMr. Abrams 111 Accounts ReceivableMrs. Mercado 112 Accounts ReceivableMr. Roker 120
Advertising Materials 130 Office Supplies 140 Landscaping Supplies 150 2006
Nissan Pickup Truck 151 Accumulated DepreciationPickup Truck 160 Lawn Equipment 161
Accumulated DepreciationLawn Equipment
LIABILITIES
200 Note PayableAunt Martha 210
Accounts PayableYoung’s Home & Garden Center 220 Accounts PayableVISA® 230
Interest Payable 240 Unearned Revenue
CAPITAL
300 Kyle Cross, Capital 310 Kyle
Cross, 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 Expens
530 Advertising Expense 540 Office Supplies Expense 545 Interest Expense
550 Pickup Truck Maintenance Expense 560 Equipment Rental Expense 570 Insurance
Expense 580 Depreciation ExpensePickup Truck 590 Depreciation Expense Lawn
Equipment
NARRATIVE OF TRANSACTIONS
(Note: Unless stated otherwise,
assume that all cash in and out is checking account related.)
No. Date Transaction
1 7/1 Kyle opened two accounts at
Pioneer State Bank, using $3,000 of his own money. He deposited $2,500 in a
checking account and $500 into savings.
2 7/2 Kyle borrowed $6,000 from his
Aunt Martha 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. Kyle put $4,500 into his checking account and $1,500 into savings.
3 7/3 Kyle purchased a 2006 Nissan
pickup truck by writing a check for $4,820.
4 7/3 Kyle purchased insurance for
the pickup truck at a cost of $150 per month. He paid for the month of July.
5 7/3 Kyle 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 Kyle returned to the bank and
applied for a VISA® card. He received a card with a $1,000 credit limit.
7 7/5 Kyle purchased a lawn mower
and garden tools on account from Young’s Home & Garden Center. The total
cost was $1,080. (Debit Lawn Equipment.)
8 7/6 Kyle purchased $185 worth of
gloves, stakes, trimmer lines, and other supplies at the local hardware store
using his VISA card.
9 7/6 Kyle paid $80 cash for 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
Kyle’s checking account. He considered this an immaterial amount and charged it
all to Office Supplies Expense.
11 7/7 Kyle 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.
Kyle used his VISA for all of these purchases.
12 7/8 One of Kyle’s neighbors, Mr.
Lee, is leaving town for six weeks. He paid Kyle $360 to mow his lawn each week
and keep his hedges trimmed while he is away.
13 7/9 Kyle paid $75 cash to rent
some equipment needed for the Abrams job (see transaction 15).
14 7/10 Kyle purchased another $60
of gas using his VISA card.
15 7/11 Kyle completed a landscaping
and clean-up job for Mr. Abrams. He left Mr. Abrams a bill for $720.
16 7/13 Kyle charged another $140 in
landscaping supplies at Young’s Home & Garden Center.
No. Date Transaction
17 7/14 Kyle completed a $550 job
for Mrs. Mercado. She had hired him to mow her lawn and create a perennial
flower bed in the front of her house. Mrs. Mercado paid him $250 and agreed to
pay the rest later.
18 7/15 Kyle’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, Melissa. They went in Melissa’s car, as
an evening out in a landscaping truck wasn’t exactly what they were looking for.
19 7/16 Kyle charged $110 on his VISA
card for an oil change and some other minor maintenance on his truck.
20 7/17 Kyle paid Young’s Home&
Garden Center $175 on his account.
21 7/17 Kyle transferred $300 from
his checking account to his savings account.
22 7/18 Kyle wrote a check for $40
for fuel for the truck and mower.
23 7/19 Kyle had no cash on him, so
he wrote a business check for $12 to pay for his lunch.
24 7/19 Kyle completed a job in
which he mowed Mrs. O’Brien’s lawn and created two new flower beds. She paid
him $425 in cash.
25 7/20 Kyle paid $55 to rent a
piece of equipment to assist in trimming Mr. Lovette’s trees (transaction 26).
26 7/20 Mr. Lovette paid Kyle $150
to mow his lawn and trim his trees.
27 7/21 Kyle received $400 from Mr.
Abrams, with a note that he would pay the balance next week.
28 7/22 Kyle paid $80 to rent some
equipment needed for the Roker job (see transaction 29).
29 7/23 Kyle completed a $700 job
landscaping Mr. Roker’s pool area. He was paid $200 in cash, and Mr. Roker
agreed to pay the balance in August.
30 7/24 A check for $150 was
received from Mrs. Mercado as partial payment on the work Kyle completed on
July 14.
31 7/24 Kyle charged (on his VISA)
another $65 for landscaping supplies.
32 7/25 Mrs. Feldman paid Kyle $140
to mow, weed, and put new mulch in her garden beds.
33 7/26 Kyle wrote a check for $85
for more fuel for his truck and mower.
34 7/27 Kyle purchased an additional
$45 of office supplies.
35 7/30 Kyle paid another $75 on his
account at Young’s Home & Garden Center.
7/31 Now that Kyle has completed his
first month in business he wants to prepare financial statements. He has
gathered the information needed to make adjustments for the month ended July 31.
Information for Adjustments
A1 Kyle estimates that his truck
will last four years and have an estimated salvage value of $500. (Kyle is
using straight-line depreciation for all assets.)
A2 The lawn mower and tools should
last three years, with no salvage value.
A3 Kyle needs to accrue one month’s
interest on his loan from Aunt Martha.
A4 By July 31, Kyle had mowed Mr.
Lee’s yard three of the six agreed-upon times.
A5, A6 As of July 31, Kyle had $25
of office supplies, $75 of landscaping supplies, and 200 & A7 advertising
flyers still on hand.
A8 Kyle’s bank statement showed that
his savings account had earned $5 in interest revenue.
TUTORIAL PREVIEW
| The Lawn Ranger Landscaping Service | ||
| Post-Closing Trial Balance | ||
| July 31, 20-- | ||
| Cash-Checking | 2,863.00 | |
| Cash-Savings | 2,305.00 | |
| Accounts Receivable-Mr. Abrams | 320.00 | |
File name: Landscaping services.xls File type: doc PRICE: $50
