Building Blocks of Accounting .. A Financial Perspective A SOLE PROPRIETORSHIP

| November 9, 2018

Building Blocks of Accounting .. A Financial PerspectiveA SOLE PROPRIETORSHIPmary, when you are ready to have your work graded you will upload this file MS1221.xlsto the same screen that the project was downloaded from:www.cybertext.com, The Book List, Building Blocks of Accounting .. A Financial Perspective, Enterpassword, Upload Your Excel File.Keep two copies of your spreadsheet in two separate places in case one does not work.You may find it easier to work on this project if you print a hard copy of all the pages.NOTE:If there are any questions about the project e-mail markfriedman@miami.edu or call 305.284.6296.Grade will be based upon answers entered into the shaded boxes.F111150123or MS1221.xlsx,Elf VillageProductions50 SheetLegal PadBuilding Blocks of Accounting .. A Financial PerspectiveFAQPage 1FAQ 01My file used to upload, why is it not uploading?Answer:Sometimes we unknowing add items to a workbook that inhibits the upload process. The conversion to an earlier versionSomehow clean the files and they then upload without problem. If the problem continue simple send your file as anattachment with your username and passwordfriedman@cybertext.comWindows Operating SystemSelect FileSelect Save AsSelect Save As Type:Select Microsoft 5.0/95 Workbook (*.xls)Select SaveSelect Continue or Yes if prompted or if it indicates that there is limited memory.SelectSelectSelectSelectSelectSelectFile CloseFile Open and open the .xls fileSave AsSave As Type:Excel Workbook (*.xlsx)SaveUpload the file at cybertext.comApple Operating SystemSelect FileSelect Save AsSelect Format:Select Microsoft 5.0/95 Workbook (*.xls)Select SaveSelect Continue or Yes if prompted or if it indicates that there is limited memory.SelectSelectSelectSelectSelectSelectFile CloseFile Open and open the .xls fileSave AsFormat:Excel Workbook (*.xlsx)SaveExcel 5.0/95Workbook (.xls)Upload the file at cybertext.comElf VillageProductionsMF1234.xlsx50 SheetLegal PadBuilding Blocks of Accounting .. A Financial PerspectiveFAQFAQ 02When I try to enter information in the General Journal why does an error appears indicating that the cell protected?Page 2Answer:The computer program is designed to save you time. Instead of requiring you to enter the description fourtimes the program automatically copies the description when you enter a new account number. This processrequires that the data entry is limited to those cells which contain unique information. The cells that you canenter data into are the yellow filled cells.FAQ 03In the feedback section, what does it mean when I have points under reverse?Answer:If you pay a telephone expense of $100.00Telephone Expense100Cash100If you debit cash and credit telephone expense you have reversed the whole entry.Cash100Telephone Expense100If you debit cash and credit anything else you have reversed part of the entry.Cash100Rent ExpenseElf VillageProductions10050 SheetLegal PadBuilding Blocks of Accounting .. A Financial PerspectiveFAQFAQ 04How does my instructor get my grade?Answer:Every time you upload your grade is recorded in a table. Your instructor can look at the table whenever theywant to, although only the last grade counts. Keep a hard copy of your last upload for documentation.FAQ 05I have entered all the transactions and have completed the worksheet however I get followingmessage on the financial statements: "You must finish the worksheet before you can complete the …."Answer:The worksheet demonstrates that the accounting system is working. If all of your journal entries arein balance then the Unadjusted Trial Balance and the Adjusting Entry columns will balance. TheAdjusted Trial Balance columns net the Unadjusted Trial Balance and the Adjusting Entry columns.There are four steps to completing the worksheet:1. Copy the account balances from the Adjusted Trial Balance into the either the Income Statement or theBalance Sheet columns, (debits remain debits and credits remain credits).2. Calculate the Net Income or Net Loss by finding the difference between the revenues and expenses.3. Calculate the Net Income or Net Loss by finding the difference between the total of the debit balances andthe total of the credit balances of the accounts in the Balance Sheet columns of the worksheet.4. Compare the two Net Incomes. If they are the same the financial statements will be displayed, otherwisethere is an error in the completion of the worksheet.Page 3Building Blocks of Accounting — A Financial PerspectiveThe instructions start on row 22 of this page.FIRSTmaryLASTspencerSS1221FileMS1221Welcome to the world’s first ePractice case, an individualized, internet generated and graded case study that focuses onthe analytically portion of the accounting cycle while automating the repetitive posting cycle.NOTE: If the program is not working e-mail markfriedman@miami.edu, 305.284.6296.Step I – The Chart of AccountsThe chart of accounts includes all of the accounts that you can use to solve your case. You may want to print the chartof accounts and use it as an easy reference guide.Step II Journalizing the Transactions.Using your unique transactions record the corresponding general journal entry, rounding to two decimal places.For example,01June 1: Hudson Bloom made a $40,000 cash investment in his business, Byte of Accounting.01Jun 01DescriptionCreditNameDebitountAccDateTransactionIn the date field enter the date of the transaction. If you do not enter a date value an error message will appear.Cash01Jun 01DescriptionCreditNameDebitountAccDateTransactionIn the account field enter the account number that corresponds to the account in the chart of accounts.You can also use the pull down list to find the appropriate account number. If you use a number thatis not on the chart of accounts an error message will appear.1110 CashThe name of the account will automatically appear in the name column. If it is the wrongaccount renter the correct account number.CreditCredit1110 CashAdvertising ExpenseAccounts PayableDescriptionDebitountAccJun 01Jun 01Jun 01NameDebit010101DateTransactionEnter the description in the description field.Hudson’s investmentHudson’s investmentHudson’s investmentountAccDateTransactionEnter the amount in the debit field.NameDescriptionTransaction # 1 Not in Balance by $40,000.0101Jun 01Jun 011110 CashCashHudson’s investmentHudson’s investment40,000.00DescriptionCreditNameDebitountAccDateTransactionEnter the second account number.Transaction # 1 Not in Balance by $40,000.0101Jun 01Jun 011110 Cash3100 Hudson Bloom, CapitalHudson’s investment40,000.00Hudson’s investment01Jun 011110 Cash3100 Hudson Bloom, CapitalDescriptionHudson’s investmentHudson’s investmentCreditNameDebitountAccDateTransactionEnter the amount in the credit field.40,000.0040,000.00Step III WorksheetAlthough not graded, you should complete the Worksheet. If each of your journal entries are in balancethen your Unadjusted Trial Balance, Adjusting Entry and Adjusted Trial Balance columns will be inbalance.1. Copy the account balances from the Adjusted Trial Balance into the either the Income Statement or theBalance Sheet columns, (debits remain debits and credits remain credits).2. Calculate the Net Income or Net Loss by finding the difference between the revenues and expenses.3. Calculate the Net Income or Net Loss by finding the difference between the total of the debit balances andthe total of the credit balances of the accounts in the Balance Sheet columns of the worksheet.4. Compare the two Net Incomes. If they are the same the financial statements will be displayed, otherwisethere is an error in the completion of the worksheet.Step IV Prepare the Financial Statements.After you have entered all of the transactions and prepared the Worksheet, you are to prepare the IncomeStatement, Changes in Owners’ Equity Statement and the Balance Sheet using the forms provided.Step V Prepare the Closing Entries.Based upon the information from your Worksheet or from your Financial Statements, prepare the closingentries.Step VI Upload the File.Whenever you want to have cybertext.com grade your work submit it to them on the bottom of the screenthat you downloaded the file.Grading:You will be graded on the Journal Entries and the three financial statement. The case will be computergraded, therefore make sure all numbers are in the appropriate cells. The computer will evaluate yourtransactions when grading your financial statements.Note:Save and make backup copies regularly.Number Name1110 Cash1120 Accounts Receivable1130 Prepaid Insurance1140 Prepaid Rent1150 Office Supplies1211 Office Equip.1212 Accum. Depr.-Office Equip.1311 Computer Equip.1312 Accum. Depr.-Computer Equip.1411 Building1412 Accum. Depr.-Building1510 Land2101 Accounts Payable2102 Advanced Payments2103 Interest Payable2105 Salaries Payable2106 Income Taxes Payable2201 Mortgage Payable2202 Notes Payable3100 Hudson Bloom, Capital3300 Hudson Bloom, Withdrawals3400 Income Summary4100 Computer & Consulting Revenue5010 Rent Expense5020 Salary Expense5030 Advertising Expense5040 Repairs & Maint. Expense5050 Oil & Gas Expense5080 Supplies Expense5090 Interest Expense5100 Insurance Expense5110 Depreciation ExpenseNormal BalanceDebitDebitDebitDebitDebitDebitCreditDebitCreditDebitCreditDebitCreditCreditCreditCreditCreditCreditCreditCreditDebitCreditCreditDebitDebitDebitDebitDebitDebitDebitDebitDebitError #12481632641282565121024MessageDebit And Credit On Same LineDebit Before CreditNeed An Account NumberRound To Two Decimal PlacesNeed a DescriptionNeed a DateByte of Accountingmary spencer 1492TransactionDescription of transaction01.June 1: Hudson Bloom invested $127,197.00 cash and computer equipment with a fair market value of$31,710.00 in his new business, Byte of Accounting.02.June 1: Check # 5000 was used to purchased computer equipment costing $11,340.00 from maryspencer. The invoice number was 20117.03.June 1: Check # 5001 was used to purchased office equipment costing $987.00 from Office Express.The invoice number was 87417.June 2: Check # 5002 was used to make a down payment of $27,000.00 on additional computerRoyce Computers, invoice number 76542. The full price of thecomputer was $135,000.00. A five-year note was executed by Byte for the balance.04. equipment that was purchased from05.June 4: Additional office equipment costing $300.00 was purchased on credit from Discount ComputerCorporation. The invoice number was 98432.06.June 8: Unsatisfactory office equipment costing $60.00 from invoice number 98432 was returned toDiscount Computer for credit to be applied against the outstanding balance owed by Byte.07.June 10: Check # 5003 was used to make a $20,750.00 payment reducing the prinicpal owed on the June2 purchase of computer equipment from Royce Computers.June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer$5,304.00 from Seth’s Insurance. The effective date of the policy was June 16 and theinvoice number was 2387.08. equipment for09. June16: A check in the amount of $7,500.00 was received for services performed for Pitman Pictures.June 16: Byte purchased a building and the land it is on for $101,000.00 to house its repair facilities andto store computer equipment. The lot on which the building is located is valued at $16,000.00. The10. balance of the cost is to be allocated to the building. Check # 5005 was used to make the down paymentof $10,100.00. A thirty year mortgage with an inital payement due on August 1st, was established for thebalance.11. June12.June 17: Received invoice number 26354 in the amount of $425.00 from the local newspaper foradvertising.13. June14.17: Check # 5006 for $6,000.00 was paid for rent of the office space for June, July and August.21: Accounts payable in the amount of $240.00 were paid with Check # 5007.June 21: Check # 5008 was used to purchase a fax machine for the office from Office Machines Expressfor $750.00. The invoice number was 975-328.15. June21: Billed various miscellaneous local customers $4,300.00 for consulting services performed.16.June 22: Check # 5009 was used to pay salaries of $910.00 to equipment operators for the week endingJune 18. Ignore payroll taxes.17.June 22: Received a bill for $1,165.00 from Computer Parts and Repair Co. for repairs to the computerequipment. The invoice number was 43254.18. June19.22: Check # 5010 was used to pay the advertising bill that was received on June 17.June 23: Purchased office supplies for $705.00 from Staples on account. The invoice number was65498.20. June23: Cash in the amount of $3,445.00 was received on billings.21. June28: Billed $5,490.00 to miscellaneous customers for services performed to June 25.22. June29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011.23. June29: Cash in the amount of $5,201.00 was received for billings.24.June 29: Check # 5012 was used to pay salaries of $910.00 to equipment operators for the week endingJune 25. Ignore payroll taxes.25.June 30: Received a bill for the amount of $890.00 from O & G Oil and Gas Co. The invoice numberwas 784537.26.June 30: Check # 5013 was used to pay for airline tickets of $1,700.00 to send the kids to GrandmaEllen for the July 4th holiday.Adjusting Entries – Round to two decimal places.27.The rent payment made on June 17 was for June, July and August. Expense the amount associated withone month’s rent.28. A physical inventory29.showed that only $292.00 worth of office supplies remained on hand as of June 30.The annual interest rate on the mortgage payable was 7.75 percent. Interest expense for one-half monthshould be computed because the building and land were purchased and the liability incurred on June 16.30. Record a journal entry31.to reflect that one half month’s insurance has expired.A review of Bytes job worksheets show that there are unbilled revenues in the amount of $5,125.00 forthe period of June 28-30.The fixed assets have estimated useful lives as follows:Building – 31.5 yearsComputer Equipment – 5.0 years32. Office Equipment – 7.0 yearsUse the straight-line method of depreciation. Management has decided that assets purchased during amonth are treated as if purchased on the first day of the month. The buildings scrap value is $7,000.00.The office equipment has a scrap value of $400.00. The computer equipment has no scrap value.Calculate the depreciation for one month.33.A review of the payroll records show that unpaid salaries in the amount of $546.00 are owed by Byte forthree days, June 28 – 30. Ignore payroll taxes.34.The note payable to Royce Computers (transactions 04 and 07) is a five-year note, with interest at the rateof 12 percent annually. Interest expense should be computed based on a 360 day year.Closing Entries35. Closethe revenue accounts.36. Closethe expense accounts.37. Closethe income summary account.38. Closethe withdrawals account.A Byte of AccountingGeneral Journalalance010101Jun 01Jun 01Jun 011110 Cash1311 Computer Equip.3100 Hudson Bloom, CapitalHudson’s InvestmentsHudson’s InvestmentsHudson’s Investments0202Jun 01Jun 011211 Office Equip.1110 CashequipequipNeed An Account NumberTotalBDescriptionCreditNameDebitountAccDateTransactionNot in Balance by $5,299.20 data into the yellow filled cells.Note: You can only enter127,197.0011,340.00138,537.0011,340.0011,340.000303Jun 01Jun 011311 Computer Equip.1110 Cashequipequip040404Jun 02Jun 02Jun 021311 Computer Equip.1110 Cash2202 Notes Payableprepaymentprepaymentprepayment0505Jun 04Jun 041311 Computer Equip.1110 Cashequequ300.000606Jun 08Jun 082101 Accounts Payable1211 Office Equip.return office equipreturn office equip140.000707Jun 10Jun 102202 Notes Payable1110 Cashpayments on netpayments on net0808Jun 14Jun 141130 Prepaid Insurance1110 Cashexpenseexpense0909Jun 16Jun 161110 Cashamount received for service4100 Computer & Consulting amount received for service10101010Jun 16Jun 16Jun 16Jun 161411 Building1510 Land1110 Cash2201 Mortgage Payablepurchase land and bulidingpurchase land and bulidingpurchase land and bulidingpurchase land and buliding1111Jun 17Jun 171140 Prepaid Rent1110 Cashexpenseexpense6,000.001212Jun 17Jun 175030 Advertising Expense2101 Accounts Payableexpenseexpense425.001313Jun 21Jun 212101 Accounts Payablebill4100 Computer & Consulting bill240.001414Jun 21Jun 211211 Office Equip.1110 Cash750.001515Jun 21Jun 211120 Accounts Receivableconsulting services4100 Computer & Consulting consulting services1616Jun 22Jun 225020 Salary Expense1110 Cash1717Jun 22Jun 225040 Repairs & Maint. Expens repair expense2101 Accounts Payablerepair expense1818Jun 22Jun 222101 Accounts Payable1110 Cashadvertisting billadvertisting bill425.001919Jun 23Jun 231150 Office Supplies2101 Accounts Payablesuppliessupplies705.00office expenseoffice expensepaid salarypaid salary987.00987.00135,000.0027,000.00108,000.00300.00140.0021,500.0021,500.005,304.005,304.007,500.007,500.0085,000.0016,000.0010,100.0090,900.006,000.00425.00240.00750.004,300.004,300.00910.00910.001,165.001,165.00425.00705.0012719711340(138537)00000113400(11340)00040987(987)000000135000(27000)(108000)00000300(300)000000140(140)00000021500(21500)0000005304(5304)0000007500(7500)0000008500016000(10100)(90900)00006000(6000)000000425(425)000000240(240)000000750(750)0000004300(4300)000000910(910)0000001165(1165)000000425(425)000000705(705)004A Byte of AccountingGeneral JournalalanceTotalBDescriptionCreditNameDebitountAccDateTransactionNot in Balance by $5,299.20 data into the yellow filled cells.Note: You can only enter00cash from billingscash from billings1110 Cash1120 Accounts Receivable2121Jun 28Jun 281120 Accounts Receivableservice4100 Computer & Consulting service5,490.002222Jun 29Jun 292101 Accounts Payable1110 Cashbillbill1,165.002323Jun 29Jun 291110 Cash1120 Accounts Receivablecash for billcash for bill5,201.002424Jun 29Jun 295020 Salary Expense1110 Cashpaid salarypaid salary910.002525Jun 30Jun 305050 Oil & Gas Expense2101 Accounts Payableoil and gas billoil and gas bill890.002626Jun 30Jun 303300 Hudson Bloom, Withdrawals1110 CashNeed a Description2727Jun 30Jun 305010 Rent Expense1140 Prepaid Rentrent expenserent expense2828Jun 30Jun 305080 Supplies Expense1150 Office Suppliesoffice suppliesoffice supplies2929Jun 30Jun 305090 Interest Expense2103 Interest Payableinterest expenseinterest expense3030Jun 30Jun 305100 Insurance Expense1130 Prepaid Insuranceinsurance expenseinsurance expense221.003131Jun 30Jun 301120 Accounts Receivable4100 Computer & Consulting Need a Description5,125.0032323232Jun 30Jun 30Jun 30Jun 305110 Depreciation Expense1412 Accum. Depr.-Building Need a Description1212 Accum. Depr.-Office Equi Need a Description1312 Accum. Depr.-Computer ENeed a Description3333Jun 30Jun 305020 Salary Expense2105 Salaries Payableunpaid salaryunpaid salary3434Jun 30Jun 305090 Interest Expense2103 Interest PayableNeed a Description3535Jun 30Jun 302106 Income Taxes PayableNeed a Description3,445.005,490.001,165.005,201.00910.00890.002,000.002,000.00413.00413.00221.005,125.005490(5490)0000001165(1165)0000005201(5201)000000910(910)000000890(890)000000016002000(2000)000000413(413)0000000000221(221)0000005125(5125)00016005110189003,445.0000000000Jun 23Jun 233445(3445)0000002020000161616546(546)0000007488(7488)0001600000001600000000000000000000001616# 32 Not in Balance by $5,299.20365,110.00189.20546.00546.007,488.007,488.001616161616A Byte of AccountingGeneral JournalalanceTotalBDescriptionCreditNameDebitountAccDateTransactionNot in Balance by $5,299.20 data into the yellow filled cells.Note: You can only enter37000000003800000000A Byte of Accounting, Inc.WorksheetFor Period Ending June 30, 2015AccountNumber Name1110 Cash1120 Accounts Receivable1130 Prepaid Insurance1140 Prepaid Rent1150 Office Supplies1211 Office Equip.1212 Accum. Depr.-Office Equip.1311 Computer Equip.1312 Accum. Depr.-Computer Equip.1411 Building Cost1412 Accum. Depr.-Building1510 Land2101 Accounts Payable2102 Advanced Payments2103 Interest Payable2105 Salaries Payable2201 Mortgage Payable2202 Notes Payable3100 Hudson Bloom, Capital3300 Hudson Bloom, Withdrawals4100 Computer & Consulting Revenue5010 Rent Expense5020 Salary Expense5030 Advertising Expense5040 Repairs & Maint. Expense5050 Oil & Gas Expense5080 Supplies Expense5090 Interest Expense5100 Insurance Expense5110 Depreciation ExpenseTotalNET INCOMEBalance`Unadjusted Trial BalanceDebitCredit67,992.000.001,144.000.005,304.000.006,000.000.00705.000.0011,950.000.000.000.00147,627.000.000.000.0085,000.000.000.000.0016,000.000.000.001,215.000.000.000.000.000.000.000.0090,900.000.0086,500.000.00138,537.000.000.00Adjusting EntriesDebitCredit0.000.005,125.000.000.00221.000.002,000.000.00413.000.000.000.000.000.000.000.000.000.000.00189.200.000.000.000.000.000.000.000.007,488.000.00546.000.000.000.000.000.000.000.000.000.000.001,820.00425.001,165.00890.000.000.000.000.0017,530.000.000.000.000.000.000.000.000.000.000.002,000.00546.000.000.000.00413.007,488.00221.005,110.005,125.000.000.000.000.000.000.000.000.000.00346,022.00334,682.0021,092.2015,793.00Adjusted Trial BalanceDebitCreditIncome StatementDebitCreditBalance SheetDebitCredit0A Byte of Accounting0Income Statement0For Month Ending June 30, 2015You must finish the worksheet before you can complete the Income Statement4100501050205030504050505080509051005110RevenuesComputer RevenueExpensesRent ExpenseSalary ExpenseAdvertising ExpenseRepairs & Maint. ExpenseOil & Gas ExpenseSupplies ExpenseInterest ExpenseInsurance ExpenseDepreciation ExpenseTotalNet Income0A Byte of AccountingStatement of Owner’s EquityFor Month Ending June 30, 2015You must finish the worksheet before you can complete the Changes in Owner’s EquityTotal000Balance, Beginning of PeriodInvestmentNet IncomeWithdrawalsBalance, End of Period0dA Byte of AccountingBalance SheetAs of June 30, 2015You must finish the worksheet before you can complete the Balance SheetAssets1110112011301140115012111212Current AssetsCashAccounts ReceivablePrepaid InsurancePrepaid RentOffice SuppliesTotalLong-Term AssetsOffice Equip.Accum. Depr.-Office Equip.13111312Computer Equip.Accum. Depr.-Computer Equip.14111412Building CostAccum. Depr.-Building1510LandTotalTotal AssetsLiabilities210121022103210522012202Current LiabilitiesAccounts PayableAdvanced PaymentInterest PayableSalaries PayableTotalLong-Term LiabilitiesMortgage PayableNotes PayableTotalTotal LiabilitiesOwner’s EquityHudson Bloom, CapitalTotal Liabilities and Owner’s Equity

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