Final Project Peyton Approved Data done on june 2015

| October 3, 2018

Final Project Peyton Approved Data
You will prepare financial statements that will allow you to
assess how profitable the business is.
Below you will find the data required to make entries in
your accounting workbook. Remember that you are following the business
transactions for a six-month period from the initial stage of analysis and
recording, through the reporting process. These transactions will include:
· the initial
setup of the business
· sales
· purchases
· making
payments to vendors
· paying store
employees
· managing
debt
It will help you to print this document as you are making your
entries in your workbook. Your textbook prepares you and can be used as a
reference to assist you in completing this assignment. You should begin this
project in Module Two.
Step 1:
Complete the following in the “July Journal Entries” in your
workbook (be sure to look for the July Journal Entries tab at the bottom of the
Peyton Approved Student Workbook).
The following events occur in July 2014:
July 1 – Open a bank account for Peyton Approved.This has
been done for you in the July Journal Entries tab.
July 1 – You take $15,000 from your personal savings account
and buy common stock in Peyton Approved. This has been done for you in the July
Journal Entries tab.
July 3 – Your parents 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 – Sign a lease agreement for retail/bakery space. The
agreement is for 1 year, with the option to extend the lease on a
month-to-month basis after 1 year. The rent is $1,500 per month. The lease
period starts on July 15, first and last month’s rent due at that time.
Subsequent rents are due on the 15th day of each month.
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 have baking equipment, including an oven and
mixer, that you have been using for your home-based business and will now start
using in the bakery. You estimate that the equipment is currently worth $5,000,
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 $1,000 for baking ingredients (use baking
supplies account).
July 14 – Pay $300 for miscellaneous (use misc. 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.
July 15 – Pay first and last month’s rent.
July 16 – Open the doors of the bakery.
July 31 – Pay $1,200 for a 12-month insurance policy.
Step 2:
Enter the Bakery Sales totals (below) in the appropriate
Journal Entries month tab, as indicated below.
See sample in the August Journal Entries tab.
The following events occur during the next 6 months:
Bakery sales are recorded on the last day of the month. The
following sales occurred:
July – $5,000
August – $20,000 (cell B28)
September – $22,500
October – $27,000
November – $25,000
December– $30,000
Step 3:
Enter the baking supply purchases (below) in the appropriate
Journal Entries month tab, as indicated below. See sample in the September
Journal Entries Tab.
The following baking supplies purchases are made on credit:
August 8 – $8,500, net 30 – paid 8/30
September 10 – $9,000, net 30 – paid 10/1 (cell B10)
October 12 – $10,000, net 30 – paid 11/1
November 10 – $10,000, net 30 – paid 12/1
December 4 – $12,000, net 30 – paid 1/2
Step 4:
Enter the miscellaneous supplies purchased (below) in the
appropriate Journal Entries month tab, as indicated below. See sample in the
October Journal Entries Tab.
The following misc. supplies were purchased:
August 25 – $300
September 19 – $325
October 14 – $310 (cell B19)
November 11 – $300
December 8 – $300
Step 5:
Enter payroll (below) in the appropriate Journal Entries
month tab, as indicated below. See sample in the November Journal Entries Tab.
Through December 31, the part-time employee worked the
following hours: (ignore payroll taxes)
(see table to right)
Step 6:
Enter the following monthly bills received and paid (below)
in the appropriate Journal Entries month tab, as indicated below. See sample in
the December Journal Entries tab (sample in cells B22, B28, and B57).
The following monthly bills are received and paid
(July–December)
Rent – paid each 15th – $1,500
Phone – received on the 30th of each month, paid on the
following 10th – $45
Step 7:
You pay yourself via the issuance of dividends. Enter the
dividends (below) in the appropriate Journal Entries month tab, as indicated
below. See sample in the September Journal Entries tab.
The following dividends were paid and issued:
9/30 – 2,000 (Cell
B32)
10/30 – 2,500
11/30 – 2,500
12/31 – 2,500
Step 8:
Many customers have been asking for more hypo-allergenic
products, so in November you start carrying a line of hypo-allergenic shampoos
on a trial basis. The following information relates to the purchase and sales
of the shampoo:
You use the perpetual inventory method. You are uncertain as
to which valuation method to use—FIFO, LIFO, or weighted average, so you
calculate inventory using all three and then decide which one you would like to
choose.
You will use the “Inventory Valuation” tab in your workbook
to complete the following entries. See samples for November for FIFO, LIFO, and
the Weighted Average (wt. avg).
Purchases
11/7: 10 bottles purchased at $6
11/20: 20 bottles purchased at $6.10
12/1: 25 bottles purchased at $6.05
12/14: 30 bottles purchased at $6.00
12/26: 20 bottles purchases at $6.08
Sales – selling price, $8.50 a bottle
11/15: 8 bottles
11/30: 18 bottles
12/15: 22 bottles
12/24: 24 bottles
Step 9:
You will use the “Adjusting Entries” tab in your workbook to
complete the following entries. See sample for Depreciation of Baking
Equipment.
On December 31, the following adjustments must be made:
Depreciation of baking equipment transferred to company on
7/13. Assume ½ month of depreciation in July using the straight-line method.
(Cell B6)
Accrue interest for note payable (Assume a full month of
interest for July).
Record insurance used for the year.
An inventory of baking supplies shows $1,100 of supplies are
remaining.
An inventory of misc. supplies shows $50 remaining.
Congratulations, you have now completed Section 1 (all) and
parts a & b of Section 2 of the Final Project Part I. Now you will work on
your trial balance sheet, balance sheet, and financial statements. The
information is below as well:
Step 10:
You will use the “T-Accounts” tab in your workbook to
complete the following. See sample in row 3. Complete the rest on your own.
Accumulate the numbers in your t-accounts using the
T-Accounts tab in your workbook.
Step 11:
You will use the “Trial balance” tab in your workbook to
complete the following. See sample in row 7. Complete the rest on your own. See
Exhibit 3-7 on page 62 for more information and use those to guide you through
the following steps.
Using the account balances from your t-accounts, accurately
prepare unadjusted trial balance.
Step 12
Continue using the “Trial balance” tab in your workbook to
complete the following. See sample in row 7. Complete the rest on your own. See
Exhibit 3-7 on page 62 for more information.
Interpret trial balance and make appropriate end-of-period
adjustments.
Step 13
You will use the “Adjusting Entries” tab in your workbook to
complete the following. See Exhibit 3-7 on page 62 for more information.
Post adjusted entries and prepare the adjusted trial
balance.
Step 14
You will use the “Income Statement,” “Balance Sheet,” and
“Statement of Retained Earnings” tabs in your workbook to do the following:
Apply adjusted trial balance and prepare financial
statements.
Step 15
You will use the “Closing Entries” tab in your workbook to
do the following:
Close all temporary income statement accounts and create
closing entries.
Step 16
You will use the “Trial Balance” tab in your workbook to do
the following:
Prepare the post-closing trial balance for the next
accounting period.
Step 17
You will use the “Reversing Entries” tab in your workbook to
do the following:
Prepare reversing entries.
Step 18
Almost there!
Finally, after you have completed your workbook, address the
following written sections in a separate document and submit along with your
workbook.
· Discuss the
financial statements. Determine the purpose of each statement.
· What does
each financial statement tell you as a business owner? What decisions/changes
in operations will you make based on the results reported in your statements?

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