Reference no: EM131571709
Scenario -
You've just secured a new client in your accounting practice, Bethany's Bicycle Corporation (BBC), a brand new small business specializing in bicycle repair. The owner, Bethany Beck, is a terrific cyclist and bike repair specialist, but definitely not an accountant. Your job is to helpBethany put his affairs in order. Luckily Bethany has only been in operation for a month and things have not gotten too out of hand yet! Bethany has to submit his financial statements to her investors and doesn't know where to begin. It's your job to go through the complete Accounting cycle to prepare the financial statements for the BBC.
During its first month of operation, the Bethany's Bicycle Corporation, which specializes in bicycle repairs, completed the following transactions.
March Transactions -
March 1 - Began business by making a deposit in a company bank account of $20,000, in exchange for 2,000 shares of $10 par value common stock.
March 1 - Paid the premium on a 1-year insurance policy, $2,400.
March 1 - Paid the current month's store rent expense, $1,900.
March 3 - Purchased repair equipment from Andrew Company, $5,800. Paid $1,000 down and the balance was placed on account. Payments will be $400.00 per month for 12 months. The first payment is due 4/1. Note: Use Accounts Payable for the Balance Due.
March 8 - Purchased repair supplies from Jackson Company on credit, $650.
March 10 - Paid telephone bill for March, $340.
March 11 - Cash bicycle repair revenue for the first third of March, $1,650.
March 18 - Made payment to Jackson Company, $400.
March 20 - Cash bicycle repair revenue for the second third of March, $2,450.
March 31 - Cash bicycle repair revenue for the last third of March, $1,250.
March 31 - Paid the current month's electice bill, $250.
March 31 - Declared and paid cash dividend of $1,000.
REQUIREMENT 1: Prepare journal entries to record the March transactions in the General Journal below. Remember that Debits must equal Credits-All of your Journal Entries should balance.
REQUIREMENT 2: Post the March journal entries to the following T-Accounts and compute ending balances.
REQUIREMENT 3: Prepare a trial balance for March in the space below.
Requirement 4: Prepare adjusting entries using the following information in the General Journal below. Show your calculations!
a) One month's insurance has expired.
b) The remaining inventory of repair supplies is $200.
c) The estimated depreciation on repair equipment is $120.
d) The estimated income taxes are $65.
REQUIREMENT 5: Prepare an Adjusted Trial Balance in the space below.
Requirement 6: Prepare the financial statements for Bethany's Bicycle Corporation as of March 31 in the space below.
You will only be preparing the Income Statement, Statement of Retained Earning, and the Balance Sheet.
The Statement of Cash Flows is a required Financial Statement, but is not required for this project.
Requirement 7: Prepare the closing entries at March 31 in the General Journal below. Hint:Use the balances for each account which appear on the Adjusted
Trial Balance for your closing entries.
Requirement 8: Post the closing entries to the T-Accounts on the General Ledger worksheet and compute ending balances. Just add to the adjusted balances already listed.
Requirement 9: Prepare a post-closing trial balance as of March 31 in the space below.
Attachment:- Template.rar