Need Balance and income sheet complete please i Need help with theTrial balance ,Balance sheetIncome statement
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Study Unit
Basswood Furniture
Project
Characteristics of a Good Bookkeeper
Bookkeeping Manually versus Using
Computer Software
The Basswood Furniture Bookkeeping Assignment
Instructions
Tips
PART B—SPECIFIC INSTRUCTIONS
Steps for Completing the Project
Formatting Financial Statements
PART C—GRADING PROCEDURE
Submitting Your Work
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Contents
PART A—PUTTING YOUR ACCOUNTING
KNOWLEDGE INTO PRACTICE
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Basswood Furniture Project
PART A—PUTTING YOUR
ACCOUNTING KNOWLEDGE
INTO PRACTICE
Congratulations! Throughout your studies you’ve learned
various accounting procedures and what can occur throughout an entire accounting cycle. You’re now ready to put your
newfound knowledge to practical use. Although the basic procedures will always remain the same, you may be required to
adapt the skills you’ve obtained to suit the specific needs of
your employer’s specialized business. Keep in mind, however,
that the basic procedures will always remain the same. It’s
now time to put all of your knowledge and expertise into
practice.
Characteristics of a Good Bookkeeper
Traits that make for a good bookkeeper are accuracy, efficiency, and perseverance.
• Accuracy. The more accurate a bookkeeper is the fewer
mistakes he or she makes. Although no one is perfect,
if Bookkeeper A is accurate only 75% of the time and
Bookkeeper B is accurate 90% of the time, Bookkeeper A
will spend more time and resources correcting mistakes.
No one can be 100% accurate. However, the degree of
accuracy with which a bookkeeper completes his or her
work does reflect upon the quality of the bookkeeper.
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• Efficiency. This factor is closely related to accuracy.
The more efficient a bookkeeper is, the more time he or
she will save. Time is money.
• Perseverance. Anyone can be a data entry operator
trained to input information into a computer system.
However, what happens when that information is entered
incorrectly? What separates a data entry person from a
good bookkeeper is the ability to recognize incorrect
information (e.g., debits don’t equal credits), find the
problem, and then correct it. This process sometimes
requires perseverance. That is, you may not be able to
find the problem the first time you look for the mistake.
The books of accounting need to be 100% accurate. A
good bookkeeper will keep looking when he or she knows
that something isn’t right.
Bookkeeping Manually versus
Using Computer Software
This course isn’t aimed at teaching you how to use software.
Instead, the emphasis is on learning bookkeeping. Why
learn to keep books manually (by hand) instead of using a
spreadsheet or accounting software such as Peachtree or
QuickBooks? Suppose an employer must fill a bookkeeping
position. Applicant A can keep books manually but doesn’t
know how to use accounting software. Applicant B has taken
a course on how to use accounting software but has never
kept books manually. Who will the employer hire? Applicant A.
Why?
First, chances are that the software the company uses is
customized. Therefore, the employer will need to spend a few
days teaching the use of the software to whoever is hired.
Peachtree and QuickBooks make up only a small percentage
of the accounting software marketplace for small businesses,
let alone midsized and large businesses. Instead, the vast
majority of industries use accounting software that has been
created specifically for the needs of that particular industry.
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Basswood Furniture Project
Second, if Applicant B makes a mistake when entering data,
he or she won’t understand the underlying fundamentals and
processes of bookkeeping to be able to correct the mistake.
Therefore, the employer would need to spend months teaching Applicant B what Applicant A already knows.
For this project, you’re required to complete the assigned tasks
manually. The advantage to the manual completion method
is that it gives you insight into the accounting process—
journalizing transactions, classifying data in the General
Ledger (G/L), and using the ledger data to produce financial
statements. It’s important that you understand this overall
process. Journal forms, G/L accounts, worksheets, and
financial statement forms will be provided for you, along with
realistic examples of the documents that a bookkeeper in a
typical business would maintain.
If you wish to learn how to use an accounting software program, there are numerous books, videos, seminars, and
courses available, from the software developers as well as
third parties. However, to use the software effectively you
must first have bookkeeping skills. Once you’ve completed
the graded project manually, you’re encouraged to pursue
learning how to use accounting software.
The Basswood Furniture
Bookkeeping Assignment
The Basswood Furniture Bookkeeping Project is designed to
simulate the transactions that occur in an office environment.
Everything you need to complete the project is included in
this Basswood Furniture Project package.
In this project, you’ll be the bookkeeper for Basswood
Furniture, a sole proprietorship that specializes in home
furnishings and accessories. First, you’ll need to set up the
initial books of accounting. Next, you’ll record all the indicated
transactions into the appropriate journals and post them
accordingly. Then you’ll prepare a worksheet, create the necessary financial statements for the company’s calendar year
end, and finally close the accounting period. When you’ve
completed the required financial statements, you’ll submit
them to the school for grading.
Basswood Furniture Project
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The books of accounting for Basswood Furniture must be
completed manually, and the financial statements submitted
in the proper format for grading. You’ll upload the following
financial statements according to the instructions found in
this study unit:
• Balance sheet
• Income statement
The other project materials aren’t necessary for grading the
project. Don’t send them to the school.
Instructions
This project is a simulation of an actual accounting period.
While no two businesses are exactly alike, this project is a
representation of the types of transactions and procedures
you’ll encounter in business bookkeeping. The only difference
is that you’ll encounter more of them in the normal course of
business. For example, in the project you may make a deposit
with only two or three checks. In an actual business, your
deposit can easily have 15 or 20 checks. Whether you have
2–3 or 15–20, it’s all the same. Volume doesn’t make for different accounting procedures in most cases.
What you’ve learned throughout the program will be used in
completing this project. Any concepts that haven’t been covered during the program will be addressed during the course
of the project. Therefore, if you’re unsure about what to do,
go back through the program materials and workbooks.
Review the concept and apply your understanding to the
situation as presented in the instructions.
Everything you need to complete the project is contained
within the project materials in an orderly fashion. The best way
to understand what to do for this project is to read through
the instructions at least once or twice before attempting to
begin the project. This will allow you to become familiar with
what needs to be done and how all the parts of the project
(forms, journals, ledgers, financial statements, etc.) fit
together.
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Basswood Furniture Project
Important Note
Because this project is a simulation, you won’t perform certain
actions in the instructions. For example, you won’t put checks in the
mail or go to the bank to make a deposit. However, you will perform
the bookkeeping functions of writing the checks, filling out the
deposit ticket, etc. Instructions that you obviously can’t perform due
to this being a simulation, you’ll imagine “as if” you were in an office
environment. Otherwise, keep the books for the business as you
learned throughout the bookkeeping program.
Scenario: Background
Basswood Furniture is owned and operated by Ian Smith
as a sole proprietorship. Ian rents a storefront/gallery at
124 River Lane in Hemlock, PA, 18951. The store is open
Monday through Friday from 8 A.M.to 7 P.M. He has been in
business for almost two years now. He specializes in creating
custom furniture according to client specifications. The furniture is delivered and installed, if necessary, in the client’s
home or business.
Ian has hired you to be a full-charge bookkeeper effective
December 1. The previous bookkeeper left unexpectedly in
November due to medical problems. Your wage will be
$15.00/hour. Since the other bookkeeper left, Ian has been
trying to get by with paying bills, employees, etc. However, he
isn’t a trained bookkeeper. He needs someone who can get up
to speed quickly doing the books manually (Ian doesn’t have
accounting software), who understands bookkeeping intimately and is able to correct anything he has done in error,
and who can maintain his books accurately in the future.
This is why he has hired you. Although you have no
experience—this is your first job—you made a strong impression on Ian with your knowledge of bookkeeping. He was
impressed with your graded project for Penn Foster, which
you showed him during the interview process to obtain this
position. Your immediate supervisor is Jeremy Gates, a CPA
with the accounting firm Gates and Associates, Inc. Jeremy
spends one or two days at the end of every quarter auditing
the books. He is responsible for the accuracy of the books,
year-end work, tax preparation, and financial advice. You’ll
have access to Jeremy for any questions or problems you
Basswood Furniture Project
5
may have. This, coupled with your bookkeeping skills, make
Ian confident that you’ll be able to perform well in the position of full-charge bookkeeper. Your duties will be to
maintain the accounting records and produce financial statements at the end of each accounting period.
Basswood Furniture has three employees. Ian is paid a
salary. The employees are paid on an hourly basis.
1. Billie Redmond, helper
2. Betty Gable, secretary/coordinator
3. You, the bookkeeper
Ian makes all of the sales and constructs the furniture with
the help of Billie Redmond. Everyone is paid on a biweekly
basis. Jeremy Gates bills Basswood Furniture for his services
as its accountant.
Basswood Furniture operates on a calendar year, which ends
December 31. The accounting periods are monthly, and
Basswood Furniture uses an accrual basis.
A business can operate on either an accrual basis or a cash basis.
When a business first begins, it must be determined which basis it
will use. The cash basis is used by a small business with few
transactions during an accounting period. The accounting period
used is usually quarterly, semiannually, or yearly. It records the
revenues and expenses when they occur and doesn’t attempt to
match the expenses with the revenues during an accounting period.
The accrual basis is what you’ve been learning throughout your
bookkeeping course. The vast majority of businesses use the
accrual basis, which uses the Generally Accepted Accounting
Principles (GAAP) matching principle by getting the expenses into
the same accounting period that the revenues occur.
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Basswood Furniture Project
Transactions are recorded in three journals:
1. General journal
2. Cash receipts journal
3. Cash disbursements journal
Any transactions that aren’t entered in the cash receipt
or cash disbursement journals are entered in the general
journal.
Journal entries can be posted to the G/L anytime during the
course of a week, at your convenience. However, you’ve developed the good practice of making sure all entries are posted
on a weekly basis. At the end of an accounting period, you
must make absolutely sure that all journal entries have been
posted to the G/L.
At the end of the accounting period, as part of the closing
process, you’ll work with a 10-column worksheet. Use it to
create a Pre-Adjusted Trial Balance, making adjusting journal
entries and creating an Adjusted Trial Balance, from which
an Income Statement will be created in a format that follows
GAAP guidelines. Finally, a Post-Closing Trial Balance will be
created, from which you’ll generate the company’s Balance
Sheet.
Scenario: Financial Information
As the first order of business, although he doesn’t know how
accurate some of the information is, Ian has provided you
with the following financial information for the period ending
November 20XX:
• Chart of Accounts (Figure 1)
• Trial Balance (Figure 2)
• Customer list (Figure 3)
• Schedule of Accounts Receivable (Figure 4)
• Vendor list (Figure 5)
• Schedule of Accounts Payable (Figure 6)
• Schedules of vehicle depreciation (Figure 7)
Basswood Furniture Project
7
• Schedules of equipment depreciation (Figure 8)
• Schedules of office furniture and equipment depreciation
(Figure 9)
• Payroll information (Figure 10)
• Merchandise inventory valuation (Figure 11)
• Office supplies inventory valuation (Figure 12)
This information will be used initially to set up the books of
accounting for the period December 20XX. The balances in
the G/L accounts reflect all transactions recorded through
November 30 of the current year. These are the beginning
balances for December 1, 20XX. The same details are true of
the balances in the Accounts Payable (A/P) and Accounts
Receivable (A/R) subsidiary ledgers. Be sure to indicate with
a checkmark that you’ve done the posting in the posting reference columns of the ledgers when you open the books. No
supporting documentation or calculations are necessary as
the figures presented are assumed to be correct.
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Basswood Furniture Project
Basswood Furniture
Chart of Accounts
Number
Title
100
Cash—Business Checking
107
Petty Cash
110
Accounts Receivable
120
Merchandise Inventory
125
Office Supplies Inventory
140
Prepaid Rent
170
Vehicles
170.1
Accumulated Depreciation—Vehicles
180
Equipment
180.1
Accumulated Depreciation—Equipment
185
Office Furniture and Equipment
185.1
Accumulated Depreciation—Office Furniture and Equipment
200
Accounts Payable
210
Payroll Payable
211
Federal Income Tax Payable
212
Social Security Tax Payable
213
Medicare Tax Payable
214
State Income Tax Payable
215
City Income Tax Payable
221
FUTA Tax Payable
222
SUTA Tax Payable
230
Sales Tax Payable
300
Ian Smith, Capital
300.1
Ian Smith, Drawing
401
Sales Revenue
401.1
Sales Returns and Allowances
401.2
Sales Discounts
500
COGS—Cost of Goods Sold
505
Purchases
505.1
Purchase Returns and Allowances
505.2
Purchase Discounts
510
Payroll Expense
515
Payroll Tax Expense
520
Advertising Expense
525
Rent Expense
530
Office Supplies Expense
535
Telephone Expense
540
Utilities Expense
550
Supplies Expense
560
Miscellaneous Expense
570
Depreciation Expense
580
Cash Short and Over
590
Expense and Revenue Summary
FIGURE 1—Chart of Accounts: Basswood Furniture
Basswood Furniture Project
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Basswood Furniture:
Trial Balance as of November 30, 20XX
Acct. No.
Title
Debit
Credit
100
Cash—Business Checking
107
Petty Cash
110
Accounts Receivable
17,986.00
120
Merchandise Inventory
31,500.00
125
Office Supplies Inventory
140
Prepaid Rent
170
Vehicles
170.1
Accumulated Depreciation—Vehicles
180
Equipment
180.1
Accumulated Depreciation—Equipment
185
Office Furniture and Equipment
185.1
Accumulated Depreciation—Office Furn. and Equip.
3,743.08
200
Accounts Payable
5,004.00
210
Payroll Payable
211
Federal Income Tax Payable
722.00
212
Social Security Tax Payable
627.44
213
Medicare Tax Payable
146.74
214
State Income Tax Payable
310.69
215
City Income Tax Payable
221
FUTA Tax Payable
1,050.56
222
SUTA Tax Payable
7,091.28
230
Sales Tax Payable
3,750.00
300
Ian Smith, Capital
94,938.80
300.1
Ian Smith, Drawing
401
Sales
401.1
Sales Returns and Allowances
0.00
401.2
Sales Discounts
0.00
500
COGS—Cost of Goods Sold
0.00
505
Purchases
0.00
505.1
Purchase Returns and Allowances
505.2
Purchase Discounts
510
Payroll Expense
0.00
515
Payroll Tax Expense
0.00
520
Advertising Expense
0.00
525
Rent Expense
0.00
530
Office Supplies Expense
0.00
535
Telephone Expense
0.00
540
Utilities Expense
0.00
550
Supplies Expense
0.00
560
Miscellaneous Expense
0.00
570
Depreciation Expense
0.00
580
Cash Short and Over
0.00
590
Expense and Revenue Summary
0.00
TOTALS
18,513.18
500.00
347.23
2,000.00
48,000.00
16,624.86
23,500.80
14,361.60
6,125.04
0.00
101.20
0.00
0.00
0.00
0.00
148,472.25
148,472.25
FIGURE 2—Trial Balance: Basswood Furniture
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Basswood Furniture Project
Basswood Furniture:
Customer List—Accounts Receivable
Account
Number
Customer
AR-010
Elizabeth Dante, 264 Landon Lane, Antigua, PA 15935
AR-020
Liya Designs, 13 Spruce Street, Archwood, PA 17514
AR-030
Yu Wei Creations, 91 Nittany Drive, Lansdale, PA 13956
AR-040
Capital Hardware, 87 Ridge Road, Anton, PA 12893
AR-050
The Antique Shoppe, 659 Market St, Sommerville, PA 15302
AR-060
Michael’s Furniture, 284 Carter Lane, Hanson, PA 14761
AR-070
Kenny Refinishing, 73 Tomey Avenue, Brighton, PA 16688
AR-080
Sam Little, 7 Ebony Drive, Adams, PA 14475
AR-090
Jim and Pearl Jones, 92 Weston Ave., Carverton, PA 18346
AR-100
Andy Mellow, 467 Reinhold Lane, Mountain Bend, PA 11321
AR-110
Quality Furniture, 101 Chester Drive, Birchwood, PA 19834
AR-120
Donna Bigelow, 901 Washington Lane, Appleton, PA 16572
FIGURE 3—Customer List: Basswood Furniture
Basswood Furniture:
Schedule of Accounts Receivable
November 30, 20XX
Account
Number
Customer
AR-010
Elizabeth Dante
1,234.00
AR-020
Liya Designs
7,580.00
AR-030
Yu Wei Creations
6,437.00
AR-040
Capital Hardware
AR-050
The Antique Shoppe
AR-060
Michael’s Furniture
AR-070
Kenny Refinishing
925.00
AR-080
Sam Little
425.00
AR-090
Jim and Pearl Jones
125.00
AR-100
Andy Mellow
AR-110
Quality Furniture
AR-120
Donna Bigelow
Total
$ Amount
0.00
350.00
0.00
50.00
0.00
860.00
$ 17,986.00
FIGURE 4—Schedule of Accounts Receivable: Basswood Furniture
Basswood Furniture Project
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Basswood Furniture:
Vendor List—Accounts Payable
Account
Number
Vendor
AP-010
Hemlock Gas and Electric Co., Hemlock, PA 18953-6174
AP-020
The Home Improvement Center, 91 Arch St, Benton, OH 65714
AP-030
Carol’s Wood Supplies, 6 Lane Way, Canton, NJ 35741
AP-040
Atlantic Telephone Co., Hemlock, PA 18952-6143
AP-050
Woodworker Supplies, 4 Tennison Drive, Benning, NC 43852
AP-060
Everything Wood, 608 Rider Avenue, Capta, CA 93412
AP-070
Sally’s Fabrics, 593 Eleanor Road, TN 34687
AP-080
Two Guys Hardware, 29 Huntington Dr, Allenwood TN 26579
AP-090
Penn Furnishings, 84 Oakwood Avenue, Allenwood, TN 26579
AP-100
Cheryl Wood Designs, 802 Corning St, Palmerton, PA 11682
AP-110
Tom Baker, 53 Union Street, Hemlock, PA 18951
AP-120
Wood Imaginations, P.O. Box 461, Elkington, MN 43167
AP-130
Gates and Associates, Inc., 149 Elk Dr, Hemlock, PA 18953
FIGURE 5—Vendor List: Basswood Furniture
Basswood Furniture:
Schedule of Accounts Payable
November 30, 20XX
Account
Number
Vendor
AP-010
Hemlock Gas and Electric Co.
$ 0.00
AP-020
The Home Improvement Center
353.00
AP-030
Carol’s Wood Supplies
631.00
AP-040
Atlantic Telephone Co.
AP-050
Woodworker Supplies
AP-060
Everything Wood
AP-070
Sally’s Fabrics
AP-080
Two Guys Hardware
AP-090
Penn Furnishings
AP-100
Cheryl Wood Designs
480.00
AP-110
Tom Baker
130.00
AP-120
Wood Imaginations
964.00
AP-130
Gates and Associates, Inc.,
Total
$ Amount
0.00
1,621.00
750.00
0.00
75.00
0.00
0.00
$ 5,004.00
FIGURE 6—Schedule …
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