FINANCIAL ACCOUNTING PROJECT- During the month of October of the current year,

FINANCIAL ACCOUNTING
PROJECT
This project is meant for you to incorporate the semester’s learnings
into an actual scenario. You should work on this project as the topics
are covered in class. During the month of October of the current year, Dan’s Accounting Service was opened.
The following transactions occurred.
Oct 1 Dan sold $70,000 worth of stock (50 shares) to start the business.
Oct 1 Dan purchased $9,500 worth of office equipment on account from Keene’s
Furniture Supply.
Oct 1 Dan paid October’s rent on the office. He wrote a check for $2,500.
Oct 2 Dan purchased $400 worth of office supplies for cash.
Oct 4 The telephone was installed. We paid $95 (Utilities Expense).
Oct 4 Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).
Oct 4 Dan started a petty cash fund with $50 for a fund balance.
Oct 5 We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).
Oct 5 A three-month umbrella insurance policy was purchased for $720 (cash).
Oct 7 Bebus’s Automotive Supply Company paid us $2,800 (cash) for setting up their
books.
Oct 9 We earned $3,200 from Dietz’s Fine Furniture Company for setting up their
books. They will pay us later.
Oct 12 We paid a part-time employee $90 for running errands. There are no taxes to be
withheld.
Oct 14 Smith’s Food Service, Inc. paid us $1,700 for helping them with their taxes.
The actual bill was for $3,500. They will pay us the rest next month.
Oct 19 We paid our part-time employee $80 for running errands. There are no taxes to be
withheld.
Oct 23 We sent a check for $1,000 to Keene’s Furniture Supply for the office equipment
purchased on October 1st.
Oct 26 We earned $800 for consulting with Anderson’s Clothing Outlet. They will pay
us later.
Oct 26 We paid our part-time employee $50 for running errands. There are no taxes to
be withheld.
Oct 30 Dietz’s Fine Furniture Company paid us $900 on account for the work we did
for them on October 9.
Oct 30 Dan paid the stockholders $600 in dividends.
Oct 31 Dan paid the electric bill which was $90.
Oct 31 Dan replenished the petty cash fund. He had used $12 for office supplies and $18
for miscellaneous expenses. REQUIRED:
1) Journalize the following entries using the accounts from the Chart of Accounts.
Be sure to use asset accounts instead of expense accounts whenever possible.
2) Post the transactions to the ledger. (Use T- Accounts.)
3) Prepare a trial balance as of October 31 of the current year.
4) Journalize the following adjusting entries:
A) Ed determines that there was $250 worth of supplies still on hand.
B) One month of insurance was been used.
C) The depreciation on our office equipment is $250.
D) Our part-time employee has earned $40 so far this week. She will be paid next
month for the full week’s work.
5) Post the adjusting entries.
6) Prepare an adjusted trial balance.
7) Prepare an Income Statement (don’t forget the Earnings Per Share), Statement of
Retained Earnings and a Classified Balance Sheet.
8) Journalize the closing entries.
9) Post the closing entries.
10) Prepare a post-closing trial balance.
11) Financial Analysis of Dan’s Accouting Service Compute the following ratios and explain what they meaning for Dan’s
Accounting Service.
o Working capital
o Current ratio
o Debt to Asset ratio
o Profit margin ratio
o Return on Asset ratio DAN’S ACCOUNTING SERVICE
CHART OF ACCOUNTS
101
102
108
112
118
201
202
301
308
511
512
513
611
810
815
820
825
830
835
840
845 Cash
Petty Cash
Accounts Receivable
Office Supplies
Prepaid Insurance
Office Equipment
Accumulated Depreciation—Office Equipment
Accounts Payable
Wages Payable
Contributed Capital
Retained Earnings
Dividends
Professional Fees
Advertising Expense
Depreciation Expense
Insurance Expense
Miscellaneous Expense
Office Supplies Expense
Rent Expense
Utilities Expense
Wages Expense