Acc121 Principles of Accounting I: Practice Set - Glorious Garden Lawn Service

Acc121 Principles of Accounting I Comprehensive Problem Practice Set: Glorious Garden Lawn Service This set is a service business operated as a proprietorship. It includes a narrative of transactions and instructions for an optional solution with no debits and credits. This set can be solved manually or with the General Ledger software. (Note: Unless stated otherwise, assume that all cash in and out is checking account related.) 1 7/01/2013 Jay opened two accounts at union state bank, using $3,000 of his own money. He deposited $2500 in his checking acct. and $500 in a savings acct. 2 7/02/2013 Jay borrowed $6000 from his aunt Emma and signed a note payable with 8% interest. Under terms of note he must make payments of $250 plus accrued interest on the 1st of each month. He then put $4,500 into his his checking acct, and $1500 into savings. 3 7/03/2013 Jay purchased a Pickup truck by writing a check for $4820. 4 7/03/2013 Jay purchased insurance for the pickup truck at a cost of $150 per month, and paid for the month of July. 5 7/03/2013 Jay now bought a cell phone account for the business , the phone was free, and he paid $75 for the first month of service. 6 7/05/2013 Jay returned to the bank and applied for a Visa card, he received a card with $1,000. credit limit. 7 7/05/2013 Jay purchased lawn mower and gardening tools on account with Lovell Home & Garden Center, the total cost was $1,080.(debited lawn equipment) 8 7/06/2013 Jay purchased $185 worth of gloves, stakes, trimmer, and other supplies, in a local hardware store using his new Visa credit card. 9 7/06/2013 Paid $80 cash for gas and oil for his pickup truck and mower. 10 7/07/2013 A box of 500 additional checks arrived from the bank along with a memo that the cost was $25 charged to his checking account. He considered this an immaterial account and charged it all to the office supplies expense. 11 7/07/2013 Jay had 1,500 advertising flyers printed to promote his new business , and the flyers cost him $225 and are considered advertising materials. He also purchased $90 of office supplies, and used his new Visa Credit card to make the purchases. 12 7/08/2013 One of his 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 was away. 13 7/09/2013 Jay paid $75 in cash to rent equipment needed for the Foster job( see transaction #15 for details) 14 7/10/2013 He now purchased another $60 of gas using his Visa Credit Card. 15 7/11/2013 Jay completed landscaping and cleanup for Mr. Foster. He left Mr. Foster a bill for $720. 16 7/13/2013 Jay charged another $140 in landscaping supplies at Lovell Home & Garden Center. 17 7/14/2013 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 home. Mrs. Sanchez paid him $250 and agreed to pay the rest later. 18 7/15/2013 Jays girlfriend insisted that he take a break , so he withdrew $120 from his checking acct. to go out for a nice evening with his girlfriend. 19 7/16/2013 Jay charged $110 on his Visa Credit Card for an oil change and some other maintenance on his truck. 20 7/17/2013 Jay paid Lovell Home & Garden Center $175 on his account. 21 7/17/2013 Jay transferred $300 from his checking to his savings acct. 22 7/18/2013 Jay wrote a check for $40 for fuel for his truck and mower. 23 7/19/2013 Jay had no cash on him, so he wrote a business check for $12 to pay for his lunch. 24 7/19/2013 Jay completed a job in which he mowed Mrs. Mattson’s lawn and created two new flower beds. She paid him in cash $425. 25 7/20/2013 Jay paid $55 to rent a piece of equipment to assist in trimming Mr. Young’s trees( see transaction #26) 26 7/20/2013 Mr. Young paid Jay $150 to mow his lawn and trim his trees. 27 7/21/2013 Jay received from Mr. Foster $400 with a note he would pay the balance within one week. 28 7/22/2013 Jay paid $80 to rent more equipment to do The Grayson job. (see transaction # 29) 29 7/23/2013 Jay completed a job for Mr. Grayson’s pool area, the cost was $700. He was paid $200 in cash, and he agreed to pay the balance in August. 30 7/24/2013 A check for $150 was received from Mrs. Sanchez as partial payment of work Jay had done on July 14th. 31 7/24/2013 Jay charged on his Visa Credit Card another $65 for landscaping supplies 32 7/25/2013 Mrs. Yee paid Jay $140 to mow, weed and mulch her garden. 33 7/26/2013 Jay wrote a check for $85 for more fuel for his truck and mower. 34 7/27/2013 Jay purchased additional $45 in office supplies. 35 7/30/2013 Jay paid another $75 on his account at Lovell Home & Garden Center. 36 7/31/2013 Now that Jay has completed his first month in business he wants to prepare financial statement. he gathered the information needed to make adjustments for the month ended July 31st. Information for Adjustments AI) Jay estimates that his truck will last four years and have an estimated salvage value of $500. ( Jay is using straight-line depreciation for all assets.) A2)The lawn mower and tools should last three years, with no salvage value. A3) Jay needs to accrue one month’s interest on his loan from Aunt Emma. A4) By July 31, Jay had mowed Mr. Adams’ yard three of the six agreed-upon times. A5, A6 & A7) As of July 31, Jay had $25 of office supplies, $75 of landscaping supplies, and 200 advertising flyers still on hand. A8) Jay’s bank statement showed that his savings account had earned $5 in interest revenue. 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 151 Accumulated Depreciation-Pickup Truck 160 Lawn Equipment 161 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 Instructions: 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.