Chapter 5, Problem 1.20C

This problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real life situations. This problem will give you valuable experience. CHART OF ACCOUNTS You are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting cycle. When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check off each transaction as it is recorded. Required 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.) 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.) 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. Insurance expired during the month, 1,000. b. Depreciation of pool structure for the month, 715. c. Depreciation of fan system for the month, 260. d. Depreciation of sailboats for the month, 900. e. Wages accrued at June 30, 810. Your instructor may want you to use a work sheet for these adjustments. 5. Journalize adjusting entries. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.) 7. Prepare an adjusted trial balance 8. Prepare the income statement 9. Prepare the statement of owners equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.) 13. Prepare a post-dosing trial balance. Check Figure Trial balance total, 281,858; net income, 7,143; post-dosing trial balance total, 263,341

The required steps in the accounting cycle are listed below in random order. List the steps in the correct order by selecting the numbers 1 to 9 in the dropdown boxes (a) Prepare a post-closing trial balance. (b) Prepare an adjusted trial balance (c) Analyze business transactions (d)Prepare a trial balance. (e)Jornalize the transactions. (f)Journalize and post the closing entries. (g)Prepare the financial statements. (h) Journalize and post the adjusting entries (i) Post to the ledger accounts.

As a bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date.  At the end of each year, you analyze the accounts to verify that each account should be active for accumulation of costs, revenues and expenses.  In July, the accounts payable clerk has asked you to open an account named “New Expenses”.  You know that an account name should be specific and well defined.  You feel that the A/P clerk might want to charge some expenses to that account that would not be appropriate.  Why do you think the A/P clerk need this “New Expenses” account?  Who needs to know this information and what action should you consider?