hampton ACCOUNTING SERVICE INC Dear Newbie, Welcome to Hamptonl My name is Julio

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

Hey there!!

In this question we will first begin by preparing Journal entries, then we will post thses entries to their respective ledger accounts. Following that we will prepare our Trial balance.

After preparation of trial balance, we will prepare our Financial statements which include Profit and Loss account / Income statement and Balance Sheet.

So let's Begin !!

First pass journal entries, you may verify your answer from the below solution . Although i can see that you have already completed that step and have passed correct entries !! Awesome...

So, you may ignore the below entries since you have already done that :)

Now we will post the Entries to ledger....Do that....after this we can prepare our trial balance.

Refer the trial balance below... and see if you have also done the same... i m sure you will be great at this !! :)

Now that we have prepared trial balance, you can prepare your income statement and balance sheet from the same as you have got your account summary. This will be a really easy task for you now since we have already passed journal entries and posted to ledger and prepared Trial balance

Do let me know if you have any further queries....always there to help :)

All the best :)

Date Accounts and Explanation Debit ($) Credit ($) 02-Dec Purchases A/c Dr 13000 To Bank A/c Cr 13000 (Being Software purchased 10 units ) 02-Dec Salaries Payable Dr 2500 To Bank A/c Cr 2500 (Being Unpaid Salaries Paid) 02-Dec Account Receivable Dr 3200 Service Revenue on Account Cr 3200 (Being Smount Receivable on services rendered) 05-Dec Computer Equipment Account Dr 4800 To Bank A/c Cr 4800 (being Computer equipment Purchased) 08-Dec Supplies Dr 800 To Cash Ac/c Cr 800 (being payment made for supplies in cash) 10-Dec Bank Account Dr 3000 Account Receivable Cr 3000 (being amount due from debtor received) 11-Dec Bank Dr 4500 To Sales Cr 4500 (being software unots sold) 11-Dec Sales Dr 4500 To Inventory Cr 4500 12-Dec Accounts Payable Dr 1000 To Bank Cr 1000 14-Dec Purchases Dr 2400 TO Bank Cr 2400 (Being 20 Units purchased ) 15-Dec Advertising Expense Dr 250 To Bank Cr 250 (being advertising expense paid) 16-Dec Cash Dr 8000 Service Revenue on Account Cr 8000 (being cash received against services ) 17-Dec Salary Expense Dr 2500 to Bank Cr 2500 (being salary paid) 19-Dec Bank Dr 6000 Service Revenue on Account Cr 6000 (being amount received against services rendered) 22-Dec Bank Dr 3000 To Sales Cr 3000 (being software units sold) 23-Dec Sales Dr 3000 To Inventory Cr 3000 24-Dec Bank Account Dr 2500 Account Receivable Cr 2500 (being amount received from debtor) 24-Dec Account Payable Dr 2500 To Bank Account Cr 2500 (being outstanding amount paid) 27-Dec Utility Expense Dr 850 To Bank Account Cr 850 (being utility expenses paid) 29-Dec Cash Account Dr 2000 To Amount received in Advance Cr 2000 (being amount received in advance for services ) 29-Dec Cash Account Dr 5000 Service Revenue on Account Cr 5000 (being servces provided on cash) 30-Dec Bank Account Dr 15000 To Common Stock Account Cr 1500 To Retained Earnings Cr 13500 (being new equity stock issued) 31-Dec Shareholders Account Dr 32250 To Dividend Payable Cr 32250 (being dividend payable to shareholders)

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