hampton ACCOUNTING SERVICE INC Dear Newbie, Welcome to Hamptonl My name is Julio
ID: 2429662 • Letter: H
Question
hampton ACCOUNTING SERVICE INC Dear Newbie, Welcome to Hamptonl My name is Julio Antoni, your supervisor. We believe the best way for you to get working on the books for us right away you are going to be doing here is to throw you right in, so we are asking you to start For this project you will complete Hampton's entire accounting cycle. You will be required to recond entries in a journal, post to a ledger, complete a trial balance, and prepare financial statements Transactions will include day to day operations, adjusting entries, dividends and closing entries. All of the work will be completed in the provided Excel workbook (make sure you save the file on to your computerl) Company Information Hampton Accounting Service Inc. is a public corporation that has been in business for 1 year. The company is authorized to issue 100,000 shares of common stock at 51 par value. The company provides accounting services and sells accounting software. To date the company has issued 20,000 shares of common stock, which are still outstanding. The issued shares were sold at $10 per share. A building and furnishings were purchased at the start of the year The cost of the building was 5140,000 and the cost of the furnishings was $30,000. The depreciation will be recorded annually. The estimated useful life of the building is 20 years with a residual value of $10,000. The company uses the Straight line method to depreciate the building. The estimated useful life of the furnishings is 5 years with a residual value of $2,500. The company uses the Double Declining Balance method to depreciate furnishings. The current inventory consists of 30 units of software at a cost of $140.00 each. Inventory is costed using LIFO and the perpetual inventory system. The company uses an allowance method to account for uncollectible accounts. It is estimated that 1% of net credit revenue will be uncollectible, adjusted monthly. Employees are paid $2,500 salary twice a month, on the 16 for the first haif of the month and on the 2 of the following month for the last hailf of the month. Ignore income tax calculations Project Requirements 1. Opening balances The opening balances for select accounts are provided in the appropriate ledger accounts.Explanation / Answer
Date
Accounts and Explanation
Debit
Credit
12/02/13
Inventory
1300
Accounts payable
1300
12/02/13
Salary payable
2500
Cash
2500
12/02/13
Accounts receivable
3200
Service revenue
3200
12/05/13
Office equipment
4800
Accounts payable
4800
12/08/13
Supplies
800
Cash
800
12/10/13
Cash
3000
Accounts receivable
3000
12/11/13
Accounts receivable
4500
Sales revenue
4500
12/11/13
Cost of goods sold
2000
Inventory
2000
12/11/13
Accounts payable
1000
Cash
1000
(To record payment on account)
12/12/13
Inventory
2400
Accounts payable
2400
(To record inventory purchased on account)
12/14/13
Advertising expense
250
Cash
250
(To record advertising bill paid)
12/15/13
Cash
8000
Service revenue
8000
(To record accounting services provided for cash)
12/16/13
Salary expense
2500
Cash
2500
(To record salaries paid)
12/17/13
Accounts receivable
6000
Service revenue
6000
(To record accounting services provided on account)
12/19/13
Accounts receivable
3000
Sales revenue
3000
(To record software sales on account)
12/19/13
Cost of goods sold
1200
Inventory
1200
(To record the cost of the goods sold)
12/22/13
Cash
2500
Accounts receivable
2500
(To record collection on account)
12/23/13
Accounts payable
2500
Cash
2500
(To record payment on account)
12/24/13
Utilities expense
850
Cash
850
(To record payment of utility bill)
12/27/13
Cash
2000
Unearned service revenue
2000
(To record advance service revenue received)
12/29/13
Cash
5000
Service revenue
5000
(To record accounting services provided for cash)
12/30/13
Cash (1000 x $15)
15000
Common stock (1000 x $1)
1000
Additional paid in capital
14000
(To record issuance of common stock)
12/31/13
Retained earnings
31500
Dividends payable (21000 x $1.50)
31500
Working:
Purchases
Cost of Goods Sold
Inventory on Hand
Date
QTY
Unit cost
Tot. Cost
QTY
Unit cost
Tot. Cost
QTY
Unit cost
Tot. Cost
Beg. Bal.
30
140
4200
12/02/13
10
130
1300
30
140
4200
10
130
1300
12/11/13
10
130
1300
5
140
700
25
140
3500
12/12/13
20
120
2400
25
140
3500
20
120
2400
12/19/13
10
120
1200
25
140
3500
10
120
1200
Totals
30
3700
25
3200
35
4700
Date
Accounts and Explanation
Debit
Credit
12/02/13
Inventory
1300
Accounts payable
1300
12/02/13
Salary payable
2500
Cash
2500
12/02/13
Accounts receivable
3200
Service revenue
3200
12/05/13
Office equipment
4800
Accounts payable
4800
12/08/13
Supplies
800
Cash
800
12/10/13
Cash
3000
Accounts receivable
3000
12/11/13
Accounts receivable
4500
Sales revenue
4500
12/11/13
Cost of goods sold
2000
Inventory
2000
12/11/13
Accounts payable
1000
Cash
1000
(To record payment on account)
12/12/13
Inventory
2400
Accounts payable
2400
(To record inventory purchased on account)
12/14/13
Advertising expense
250
Cash
250
(To record advertising bill paid)
12/15/13
Cash
8000
Service revenue
8000
(To record accounting services provided for cash)
12/16/13
Salary expense
2500
Cash
2500
(To record salaries paid)
12/17/13
Accounts receivable
6000
Service revenue
6000
(To record accounting services provided on account)
12/19/13
Accounts receivable
3000
Sales revenue
3000
(To record software sales on account)
12/19/13
Cost of goods sold
1200
Inventory
1200
(To record the cost of the goods sold)
12/22/13
Cash
2500
Accounts receivable
2500
(To record collection on account)
12/23/13
Accounts payable
2500
Cash
2500
(To record payment on account)
12/24/13
Utilities expense
850
Cash
850
(To record payment of utility bill)
12/27/13
Cash
2000
Unearned service revenue
2000
(To record advance service revenue received)
12/29/13
Cash
5000
Service revenue
5000
(To record accounting services provided for cash)
12/30/13
Cash (1000 x $15)
15000
Common stock (1000 x $1)
1000
Additional paid in capital
14000
(To record issuance of common stock)
12/31/13
Retained earnings
31500
Dividends payable (21000 x $1.50)
31500
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