Unit 2 [AC499 Bachelor’s Capstone in Accounting] U.docx

Unit 2 [AC499: Bachelor’s Capstone in Accounting]
Unit 2 Assignment: Management Tools
Application
For the past several years, Dustin Larkin has operated a part-
time consulting business from his
home. As of June 1, 2013, Dustin decided to move to rented
quarters and to operate the business,
which was to be known as Quixote Consulting, on a full-time
basis. Quixote Consulting entered into
the following transactions during June:
June 1. The following assets were received from Dustin Larkin:
cash,
$10,000; accounts receivable, $1,500; supplies, $1,250; and
office equipment, $7,500.
There were no liabilities received.
June 1. Paid three months' rent on a lease rental contract,
$4,500.
June 2. Paid the premiums on property and casualty insurance
policies, $1,800.

June 4. Received cash from clients as an advance payment for
services to be provided (Record
it as unearned fees), $3,000.
June 5. Purchased additional office equipment on account from
Crawford Company, $1,800.
June 6. Received cash from clients on account, $800.
June 10. Paid cash for a newspaper advertisement to run during
June, $120.
June 12. Paid Crawford Company for part of the debt incurred
on June 5, $800.
June 12. Recorded services provided on account for the period
June 1 to June 12, $2,250.
June 14. Paid part-time receptionist for 2 weeks' salary, $400.
(Note: Ignore any payroll tax or
withholdings).
June 17. Recorded cash from cash clients for fees earned
during the period June 1-16, $3,175.
June 18. Paid cash for supplies, $750.
June 20. Recorded services provided on account for the period
June 13-20, $1,100.
June 24. Recorded cash from cash clients for fees earned for
the period June 17-24, $1,850.
June 26. Received cash from clients on account, $1,600.

June 27. Paid part-time receptionist for two weeks' salary,
$400. (Note: Ignore any payroll tax or
withholdings).
June 29. Paid telephone bill for June, $130.
June 30. Paid electricity bill for June, $200.
June 30. Recorded cash from cash clients for fees earned for
the period June 25-30, $2,050.
June 30. Recorded services provided on account for the
remainder of June, $1,000.
June 30. Dustin withdrew $4,500 for personal use.
Instructions-Use the Excel template provided in the class titled
“Unit 2 and 3 Management
Tools Assignment” to complete the following 3 requirements for
Unit 2:
1. Journalize each transaction in the two-column journal tab,
referring to the following chart of
accounts in selecting the accounts to be debited and credited.

11-Cash 31-Dustin Larkin, Capital
12-Accounts Receivable 32-Dustin Larkin, Drawing
14-Supplies 41-Fees Earned
15-Prepaid Rent 51-Salary Expense
16-Prepaid Insurance 52-Rent Expense
18-Office Equipment 53-Supplies Expense
19-Accumulated Depreciation 54-Depreciation Expense
21-Accounts Payable 55-Insurance Expense
22-Salaries Payable 59-Miscellaneous Expense
23-Unearned Fees
2. Post the journal to a ledger of four-column accounts, see the
Excel tab labeled accordingly.
3. Prepare a trial balance as of June 30, 2013 – using the tab in
the Excel workbook labeled
accordingly.
Be sure and save your work, you will complete the accounting
cycle in Unit 3 using the same Excel
Template and information.

Notes:
1) Proper Journal Entry Formatting is absolutely mandatory.
a. Debit Account Descriptions are to be fully left-justified in
the line.
b. Credit Account Descriptions are to be indented in the cell.
c. A short description is required for every journal entry.
2) You will be required to create at least ONE additional
general Ledger Account to
accommodate a few Journal Entries.
3) You may need to add the “Miscellaneous Expense" account to
the General Ledger.
4) Or, you may create 2 or 3 new G/L accounts. For example
"Utilities."
5) Be sure that you use proper formatting when you create the
Financial Statements. For
example:
a. Add required underlining,

b. "$" signs must be properly formatted.
6) The templates are NOT fully “pre-formatted.” You must re-
format them for proper presentation
in a number of places.
Remember, if you have any questions, concerns, or doubts about
any of the instructions, please
contact your instructor in the Virtual Office as soon as possible.
AC 499 Unit 2 Rubric:
Category
Your
score
Possible
Points
Instructor Comments
1-Prepare the Initial Journal Entries.
Scoring Criteria:
(13 – 15 Points): Entries use accurate accounts and amounts;
and

debits and credits are used correctly.
(10 – 12 Points): Journal Entries mostly use accurate accounts
and amounts; and debits and credits are used correctly.
(7.5 – 9 Points): Journal Entries have some errors in use of
accounts and amounts; debits and credits are only somewhat
used correctly.
0 15
(0 – 7 Points): Journal Entries have some errors in use of
accounts
and amounts; and debits and credits are not used correctly.
2-Post the journal entries to the G/L.
Scoring Criteria:
(13 – 15 Points): Posting is correct - trial balance is accurate.
(10 – 12 Points): Posting and T/B are mostly correct.
(7.5 – 9 Points): Posting and T/B have several errors.
(0 – 7 Points): Posting and T/B have significant errors.

0 15
3-Prepare the Unadjusted Trial Balance.
Scoring Criteria:
(9 - 10 Points): All Accounts properly presented in correct order
with correct balances.
0 10
(7 - 8 Points): Trial Balance mostly correct, 1 or 2 accounts
listed
incorrectly, 1 or 2 balances incorrect, and based on carry-
forward
errors from Parts 1 & 2.
(5 - 6 Points): Trial Balance has several errors, but they are
independent of any carry forward errors.
(0 - 4 Points): Trial Balance is poorly prepared, numerous
errors,
balances incorrect, accounts out of order.
Preliminary Totals 0 40
Additional Items:
Deductions for uncorrected errors from Unit 2 (Enter negative

amount -->)
Late Penalty (If applicable) (Enter as a negative amount -->)
Final Total 0 40
InstructionsManagement Tools Assignment Part 1 and Part
2Additional Notes:1) All Journal Entries MUST include the
"Explanation" line.Due Dates2) All Debit account entry lines
MUST be fully left-justified.Assignment Part 1 - Due at the end
of Unit 2 (40 Points)3) All Credit account entry lines MUST be
indented 4 or 5 spaces, UNIFORMLY.Assignment Part 2 - Due
at the end of Unit 3 (40 Points)4) You will be required to create
at least ONE additional general Ledger Account to
accommodate a few Journal Entires.5) You may creat one
"Miscellaneous Expense" account in the General Ledger to
accommodate all of the otherwise unspecified entries, OR you
may create 2 or 3 new G/L accounts. For example "Utilities."6)
Be sure that you use proper formatting when you create the
Financial Statements. For example, all underlining and "$"
signs must be properly formatted.7) These templates are NOT
fully "pre-formatted". You must re-format them for proper
presentation in many places.MAKE SURE TO COMPLETE ALL
REQUIREMENTS WHICH ARE LISTED BELOW.There are 9
Sheets in the Workbook including this one.All of the
Information you need for the Project is located in this
Workbook.RequirementsSheet in WorkbookAssignment Part 1
Due in Unit 02Requirement 1 - Prepare the Journal Entries in
the General JournalJounral Entries<-- VERY IMPORTANT
NOTE: You must revise the General Ledger in Unit 3 to include
the Adjusting & Closing Entries.Requirement 2 - Post Journal

Entries to the General LedgerGeneral LedgerRequirement 3 -
Prepare a Trial BalanceTrial BalanceAssignment Part 2 - Due in
Unit 3Requirement 4 - Prepare the Adjusting EntriesAdjusting
EntriesRequirement 5 - Post Adjusting Entries to the General
LedgerGeneral LedgerRequirement 6 - Prepare an Adjusted
Trial BalanceAdjusted TBRequirement 7 - Prepare the Financial
StatementsFinancial StatementsRequirement 8 - Prepare the
Closing EntriesClosing EntriesRequirement 9 - Post Closing
Entries to the General LedgerGeneral LedgerRequirement 10 -
Prepare the Post Closing Trial BalancePost Closing TB
Journal Entries-Due in Unit 2Prepare journal entries to record
the June transactions in the General Journal below.General
JournalDateDescription(Account Name)DebitCreditNote:
Remember that Debits must equal Credits - All of your Journal
Entries should balance.
General Ledger - Due in Unit 2This Sheet will be used for
Requirements 2, 5 and 9 GENERAL
LEDGERACCOUNT:CASHACCOUNTNO. 11YEARPOST.
BALANCEMONTHDAYITEMREF.DEBITCREDITDEBITCRE
DIT20101ACCOUNT:ACCOUNTS
RECEIVABLEACCOUNTNO. 12POST.
BALANCEDATEITEMREF.DEBITCREDITDEBITCREDIT20--
ACCOUNT:SUPPLIESACCOUNTNO. 14POST.
ACCOUNT:PREPAID RENTACCOUNTNO. 15POST.
ACCOUNT:PREPAID INSURANCEACCOUNTNO. 16POST.
ACCOUNT:OFFICE EQUIPMENTACCOUNTNO. 18POST.
ACCOUNT:ACCUMULATED DEPRECIATIONACCOUNTNO.
19POST.
ACCOUNT:ACCOUNTS PAYABLEACCOUNTNO. 21POST.
BALANCEDATEITEMREF.DEBITCREDITDEBITCREDITACC
OUNT:SALARIES PAYABLEACCOUNTNO. 22POST.

ACCOUNT:UNEARNED FEESACCOUNTNO. 23POST.
ACCOUNT:DUSTIN LARKIN, CAPITALACCOUNTNO.
31POST.
ACCOUNT:DUSTIN LARKIN, DRAWINGACCOUNTNO.
32POST.
ACCOUNT:INCOME SUMMARYACCOUNTNO. 33POST.
ACCOUNT:FEES EARNEDACCOUNTNO. 41POST.
ACCOUNT:SALARY EXPENSEACCOUNTNO. 51POST.
ACCOUNT:RENT EXPENSEACCOUNTNO. 52POST.
ACCOUNT:SUPPLIES EXPENSEACCOUNTNO. 53POST.
ACCOUNT:DEPRECIATION EXPENSEACCOUNTNO.
54POST.
ACCOUNT:INSURANCE EXPENSEACCOUNTNO. 55POST.
Trial Balance - Due in Unit 3REQUIREMENT #3:Prepare a trial
balance for June in the space below.DebitCredit
Adjusting Entries-Due in Unit 3Requirement #4: Remember to
post these to the G/L, too.General
JournalDateDescription(Account Name)DebitCreditNote:
Remember that Debits must equal Credits - All of your Journal
Entries should balance.
Adjusted TB - Due in Unit 3Requirement #6: Prepare an
Adjusted Trial Balance in the space below.DebitCredit
Financial Statements - Unit 3Requirement #7:VERY
IMPORTANT NOTE:Insert rows as neededYou will have to
MODIFY the spreadsheet to properly include all accounts and

formatting.Income StatementHint: Remember, Quixote
Company is NOT a corporate business. Therefore, any
terminology that would not be associated with Quixote
Company MUST be revised.Revenues:Expenses: Total
ExpensesNet IncomeStatement of Owners EquityRetained
Earnings, October 1Add: Additional InvestmentAdd: Net
IncomeSubtotalLess: DividendsRetained Earnings, October
31VERY IMPORTANT NOTE:You will have to MODIFY the
spreadsheet to properly include all accounts and
formatting.Balance SheetAssets:Liabilities:Total
LiabilitiesStockholders' Equity:Total Stockholders' EquityTotal
Liabilities & Stockholders' Equity
Closing Entries - Unit 3Requirement #8:Remember to post these
to the G/L, too.Prepare the closing entries at June 30 in the
General Journal below.Hint: use the balances for each account
which appear on the AdjustedTrial Balance for your closing
entries.General JournalDateDescription (Account
Name)DebitCreditRequirement #9:Post the closing entries to the
General Ledger T-accounts and compute ending balances.Just
add to the adjusted balances already listed.
Post Closing TB - Unit 3Requirement #10:HINT:Only
"Permanent" or "Real" account balance should remainPrepare a
post-closing trial balance as of October 31 in the space below.at
this point in the Acocunting Cycle.To be specific, only Balance
Sheet Accounts should be here.Post-Closing Trial Balance

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