ACC 2021 Comprehensive Problem Discussion

ACC 2021 Comprehensive Problem Discussion

ACC 2021 Comprehensive Problem (60 Points)

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

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