“ september journal entries ” tab B u s i n e s s F i n a n c e

“ september journal entries ” tab B u s i n e s s F i n a n c e

J. Glines

In the accounting workbook, you will use provided information to record journal entries that document financial transactions in a business. To do this, you will follow the business transactions for a three-month period

Record financial data that accurately captures business transactions according to accepted accounting principles:

A. Step One: Complete the “July Journal Entries” tab in your workbook using the Step One data in the appendix.

B. Step Two: Complete the “August Journal Entries” tab in your workbook using the Step Two data in the appendix.

C. Step Three: Complete the “September Journal Entries” tab in your workbook using the Step Three data and updated scenario information in the appendix. Note that there was an additional line of products added this month, so you must first complete the “Inventory Valuation” tab in your workbook and copy the journal entries from the inventory evaluation page into your journal for this month to ensure the impact of merchandising is reflected in your reporting.

Step Four: Transfer posted entries to T accounts.

Apply the accrual basis of accounting to correctly create adjusting entries in the preparation of financial statements:

A. Step Five: Prepare the unadjusted trial balance. Note that you should use the T account balances completed in Step Four to prepare the unadjusted trial balance portion of the “Trial Balance” tab in your workbook.

B. Step Six: Complete the “Adjusting Entries” tab in your workbook using the Step Six data in the appendix. Note that you should take the adjusting entries from this worksheet and enter them into the “Trial Balance” tab in your workbook.

C. Step Seven: Apply adjusting entries to create the adjusted trial balance. Note that the adjusting entries from Step Six will apply to affected accounts in the unadjusted trial balance to arrive at the adjusted trial balance.

Create financial statements by properly employing prescribed methods in accordance with generally accepted accounting principles:

A. Step Eight: Prepare the financial statements. Note that you must use your adjusted trial balance to prepare the income statement, statement of owner’s equity, and balance sheet. You must complete these statements in this order, as there are interdependencies among them.

The following events occur in July, 2020:

July 1: You take $10,000 from your personal savings account and buy common stock in NSA.

July 1: Purchase $6,500 in airline supplies from vendor, on account.

July 3: Investors lend the company $10,000 cash in exchange for a two-year, 6% note payable. Interest and the principal are repayable at maturity.

July 7: Enter into a lease agreement for Hanger space. The agreement is for 1 year. The rent is $1,500 per month, and the last month’s rent payment of $1,500 is required at time of lease agreement. The payment was made in cash. Lease period is effective 7/1/20 through 6/30/21

July 10: Pay $375 to the county for a business license.

July 11: Purchase a cash register for $250 (deemed to be not material enough to qualify as depreciable equipment—use misc. exp.).

July 13: You personally have some airline equipment storage racking. You estimate that the equipment is currently worth $6,000, and you transfer the equipment into the business in exchange for additional common stock. The equipment has a 5-year useful life.

July 13: Pay $200 for business cards/flyers/posters/ads to use for advertising.

July 14: Pay $300 for office supplies.

July 15: Hire part-time helper to be paid $12 per hour. Pay periods are the 1st through the 15th and 16th through the end of the month, with paydays being the 20th for the first pay period and the 5th of the following month for the second pay period. (No entry is required on this date; it is here for informational purposes only.)

July 30: Received telephone bill for July in amount of $75. Payment is due on August 10.

July 31: Pay $2,400 for a 12-month insurance policy. Policy effective dates are August 1, 2020, through July 31, 2021.

July 31: Accrue wages earned for employee for period of 16th through 31st of July (Wage calculations table provided below).

July 31: Total July Airline sales were $15,000. $5,000 of these sales are on accounts receivable.

The following events occur in August, 2020:

August 5: Paid employee for period ending 7/31.

August 8: Receive payments from customers towards accounts receivable in amount of $3,800.

August 10: Paid July telephone bill.

August 15: Purchase additional Airline supplies in amount of $5,000 from vendor, on account.

August 15: Accrue wages earned for employee from period of 1st through 15th of August (Wage calculations table provided below).

August 15: Pay rent on Airline space.

August 18: Receive payments from customers towards accounts receivable in amount of 3,000.

August 20: Paid $8,500 toward Airline supplies vendor payable.

August 20: Pay employee for period ending 8/15.

August 22: $300 in office supplies purchased.

August 31: Received telephone bill for August in amount of $75. Payment is due on 9/10.

August 31: Accrue wages earned for employee for period of August 16th through August 31st (Wage calculations table provided below).

August 31: August Airline sales total $20,000. $7,500 of this total is on accounts receivable.

The following events occur in September, 2020:

September 1: Paid dividends in amount of $10,000.

September 5: Pay employee for period ending 8/31.

September 7: Purchase merchandise for resale.

September 8: Receive payments from customers toward accounts receivable in amount of $4,000.

September 10: Pay August telephone bill.

September 11: Purchase Airline supplies in amount of $7,000 from vendor on account.

September 13: Paid on supplies vendor account in amount of $5,000.

September 15: Accrue employee wages for period of September 1 through September 15.

September 15: Pay rent on Airline space: $1,500.

September 15: Record merchandise sales transaction.

September 15: Record impact of sales transaction on COGS and the inventory asset.

September 20: Pay employee for period ending 9/15.

September 20: Purchase merchandise inventory for resale to customers.

September 24: Record sales of merchandise to customers.

September 24: Record impact of sales transaction on COGS and the inventory asset.

September 30: Purchase merchandise inventory for resale to customers.

September 30: Accrue employee wages for period of September 16th through September 30th

September 30: Total September Airline sales are $20,000. $6,000 of these sales are on accounts receivable.

On September 30, the following adjustments must be made:

[This is a sample.] Depreciation of baking equipment transferred to company on 7/13. Assume a half month of depreciation in July using the straight-line method.

+Accrue interest for note payable. Assume a full month of interest for July. (6% annual interest on 10,000 loan from parents.)

+Record insurance used for the year.

+Actual Airline supplies on-hand as of September 30 are $1,100.

+Office supplies on-hand as of September 30 are $50.

+Wage calculation data:

Month Hours Rate Pay

31 Jul. 10 12 120

15 Aug. 40 12 480

31 Aug. 35 12 420

15 Sep. 38 12 456

30 Sep. 40 12 480