This project is a review of the accounting cycle that has been covered during class. Prepare
all information in a professional manner and show details as needed. You should complete this
on the pages included. Read the entire project and review all information prior to starting.
On January 2, 2010, Jerry Andrews, a dentist, opened a dental office. The following transactions
were completed during the first month of operations.
Jan 2
Jerry invested $30,000 cash and $13,200 worth of dental equipment in the business
in exchange for common stock in a new corporation called J.A Dentist, Inc.
Jan 3
Paid four months rent of $2,000.
Jan 4
Purchases $1,000 of dental supplies and paid cash.
Jan 5
Paid insurance premiums of $3,600 for a 1-year insurance policy.
Jan 6
Earned and collected dental fees of $14,600 in cash during week.
Jan 9
Paid secretary a salary of $1,200.
Jan 10
Purchased $300 of dental supplies on account.
Jan 11
Bought an automobile for business use. It cost $13,000. Jerry paid $3,000 cash
and signed a note for the balance.
Jan 13
Received a $240 telephone bill that will be paid later in the month.
Jan 13
Billed customers $6,000 for dental fees earned during the week
Jan 16
Received a $150 electric Bill (Utility Expense) that will be paid later in the month.
Jan 18
Paid $300 for dental supplies purchased on Jan 10.
Jan 20
Earned and collected dental fees of $4,500 in cash during the week.
Jan 23
Paid $450 for advertising in a local newspaper.
Jan 23
Received a $75 water bill (Utility Expense)
Jan 25
Received $2,500 from customers on account.
Jan 27
Paid a dividend of $3,500 to Jerry Andrews, the sole stockholder.
Jan 30
Paid the utility bills (water, telephone, electric).
Jan 30
Billed customers $2,000 for dental fees earned during the week.
Jan 31
Received $1,500 from customers on account.
1
The chart of accounts for J.A. Dentist, Inc. contains the following accounts
Assets
Revenue
Cash
Service Revenue
Accounts Receivable
Dental Supplies
Prepaid Insurance
Expenses
Prepaid Rent
Advertising Expense
Dental Equipment
Insurance Expense
Automobile
Rent Expense
Salary Expense
Liabilities
Supplies Expense
Accounts Payable
Telephone Expense
Notes Payable
Utility Expense
Salaries Payable
Stockholders Equity
Income Summary
Common Stock
Retained Earnings
Dividends
Required:
1.
Journalize the January 2010 transactions on the attached journal paper. Omit the journal
entry descriptions.
2.
Post to ledger accounts via attached T account sheet.
3.
Prepare a trial balance for January 2010 on attached sheet
4.
Record the following adjusting entries on the attached journal paper, then post the adjusting
entries to the existing T accounts.
a.
Dental supplies on hand at the end of the month amount to $350.
b.
Make the adjusting entry for the insurance premiums expired.
c.
Accrued $840 for salary earned that will be paid in February.
d.
Make the adjusting entry for rent expense.
e.
Ignore depreciation for the month of January – no adjustment needed.
5.
Prepare an adjusted trial balance for January 31, 2010 on the sheet attached
6.
Prepare the income statement, statement of retained earnings and classified balance
sheet as of January 31, 2010. Prepare the statements on the attached sheets (pages 10
and 11).
7.
Since January 31 2010 is the end of the fiscal year, record the closing entries on the
journal paper and post the closing entries to the existing T accounts.
8.
Prepare a post closing trial balance as of January 31, 2010 on the attached sheet.
** Check figures: Trial Balance $80,300; Total Assets $72,935; Net Income: $22,395 **
2
Journal entries for Requirement #1.
Date
Account Title
Debit
Credit
3
Journal entries for Requirement #1.
Date
Account Title
Debit
Credit
4
Journal entries for Requirement #4 – Adjusting Entries
Date
Account Title
Debit
Credit
Journal entries for Requirement #7 – Closing Entries
Date
Account Title
Debit
Credit
5
T accounts for requirements 2, 4 and 7
Cash
Accounts Payable
Notes Payable
Accounts Receivable
Salaries Payable
Common Stock
Dental Supplies
Retained Earnings
Prepaid Insurance
Dividends
Prepaid Rent
Dental Equipment
Income Summary
Automobile
6
T accounts for requirements 2, 4 and 7
Service Revenue
Salary Expense
Supplies Expense
Advertising Expense
Telephone Expense
Insurance Expense
Utility Expense
Rent Expense
7
Trial Balance for requirement 3
8
Adjusted Trial Balance for requirement 5
9
Post Closing Trial Balance for requirement 8
12
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