Mr. Moore has hired you as his accountant.  The two of you discuss the business and decide upon the following chart of accounts.  Chart of Accounts Assets Revenue 111 Cash 411 Income from Services 112 Accounts Receivable 412 Concessions Income 114 Prepaid Insurance Expenses 121 Land 511 Sailboat Rental Expense 125 Pool Structure 512 Wages Expense 126 Accumulated Depreciation, Pool Structure 513 Advertising Expense 127 Fan System 514 Utilities Expense 128 Accumulated Depreciation, Fan System 515 Interest Expense 129 Sailboats 516 Insurance Expense 130 Accumulated Depreciation, Sailboats 517 Depreciation Expense, Pool Structure Liabilities 518 Depreciation Expense, Fan System 221 Accounts Payable 519 Depreciation Expense, Sailboats 222 Wages Payable 522 Miscellaneous Expense 223 Mortgage Payable 224 Unearned Concessions Income Shareholder’s Equity 311 Common Stock 312 Retained Earnings 313 Dividends Mr. Moore has a general idea of what he would like you to do and his instructions are at the end of this document. When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper (chapter 1 spreadsheet). In the case of unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check each transaction as it is recorded. Catching mistakes early can prevent a lot of rework. To save time, don’t include explanations in the journal entries. The following transactions were completed during September of this year (2014): Sept 1 Moore deposited $83,200 in a bank account for the purpose of buying Lakeland Indoor Sailboats, a business offering the use of small sailboats to the public at a large indoor pool with a fan system that provides wind. (Mr. Moore’s CPA has written the JE for you.) 2 Bought Lakeland Indoor Sailboats in its entirety for a total price of $213,300. The assets include sailboats, $20,800; fan systems, $8,500; pool structure, $144,000; land, $40,000. He paid $64,400 cash down and signed a mortgage note for the remainder. (Mr. Moore’s CPA has written the JE for you.) 3 Received and paid bill for newspaper advertising, $148. .3 Received and paid bill for property insurance and liability insurance for the coming year, $1,036. 3 Bought additional boats from A and M Manufacturing Co. for $6,520, paying $3,200 down, with the remainder on account and due in thirty days. 3 Signed a contract with a vending machine service to lease them space for their vending machines. The vending machine service agreed to pay Moore 10 per­cent of the sales generated from their machines, with the estimated rental income payable in advance. Lakeland Indoor Sailboats received advance cash payment for June, $180. 3 Received bill from Quick Printing for promotional handouts, $368. 3 Signed a contract for leasing sailboats from Kelsey Boat Co. and paid rental fee for June, $632. 5 Paid cash for miscellaneous .

1. Mr. Moore has hired you as his accountant. The two of you
discuss the business and decide upon the following chart of
accounts.
Chart of Accounts
Assets
Revenue
111 Cash
411 Income from Services
112 Accounts Receivable
412 Concessions Income
114 Prepaid Insurance
Expenses
121 Land
511 Sailboat Rental Expense
125 Pool Structure
512 Wages Expense
126 Accumulated Depreciation, Pool Structure
513 Advertising Expense
127 Fan System
514 Utilities Expense
128 Accumulated Depreciation, Fan System
515 Interest Expense
129 Sailboats
516 Insurance Expense
130 Accumulated Depreciation, Sailboats
517 Depreciation Expense, Pool Structure
Liabilities
518 Depreciation Expense, Fan System
221 Accounts Payable
519 Depreciation Expense, Sailboats
222 Wages Payable
522 Miscellaneous Expense

2. 223 Mortgage Payable
224 Unearned Concessions Income
Shareholder’s Equity
311 Common Stock
312 Retained Earnings
313 Dividends
Mr. Moore has a general idea of what he would like you to do
and his instructions are at the end of this document.
When you are analyzing the transactions, think them through
by visualizing the T accounts or by writing them down on
scratch paper (chapter 1 spreadsheet). In the case of unfamiliar
types of transactions, specific instructions for recording them
are included. However, reason them out for yourself as well.
Check each transaction as it is recorded. Catching mistakes
early can prevent a lot of rework. To save time, don’t include
explanations in the journal entries. The following transactions
were completed during September of this year (2014):
Sept 1
Moore deposited $83,200 in a bank account for the purpose of
buying Lakeland Indoor Sailboats, a business offering the use of
small sailboats to the public at a large indoor pool with a fan
system that provides wind. (Mr. Moore’s CPA has written the
JE for you.)
2

3. Bought Lakeland Indoor Sailboats in its entirety for a total price
of $213,300. The assets include sailboats, $20,800; fan systems,
$8,500; pool structure, $144,000; land, $40,000. He paid
$64,400 cash down and signed a mortgage note for the
remainder. (Mr. Moore’s CPA has written the JE for you.)
3
Received and paid bill for newspaper advertising, $148.
.3
Received and paid bill for property insurance and liability
insurance for the coming year, $1,036.
3
Bought additional boats from A and M Manufacturing Co. for
$6,520, paying $3,200 down, with the remainder on account and
due in thirty days.
3
Signed a contract with a vending machine service to lease them
space for their vending machines. The vending machine service
agreed to pay Moore 10 per-cent of the sales generated from
their machines, with the estimated rental income payable in
advance. Lakeland Indoor Sailboats received advance cash
payment for June, $180.
3
Received bill from Quick Printing for promotional handouts,
$368.
3
Signed a contract for leasing sailboats from Kelsey Boat Co.
and paid rental fee for June, $632.
5
Paid cash for miscellaneous expenses, $92.44.

4. 8
Received $2,632.50 in cash as income for the use of the boats.
9
Bought an addition for the fan system on account from
Stanwood Pool Supply, $836.
15
Paid wages to employees for the period ending June 14, $4,200.
16
Paid the bill for promotional handouts already recorded on June
3.
16
Moore withdrew cash for personal use, $1,052.
16
Bought additional sails from Bergen Products, Inc., $854; on
account and payment due in thirty days.
16
Received $3,043 in cash as income for the use of the boats.
19
Paid cash for miscellaneous expenses, $42.64.
20
Paid cash to A and M Manufacturing Co. as part payment on
account, $480.
22
Received $5,082 in cash as income for the use of the boats.
23

5. Received a reduction in the outstanding bill from A and M
Manufacturing Co. for a boat received in a damaged condition,
$452. (Debit Accounts Payable, credit Sailboats.)
24
Received and paid telephone bill, $84.
29
Paid wages for period June 15 through 28, $4,652.
30
Paid cash to Stanwood Pool Supply to apply on account,
$418.00
30
Received and paid electric bill, $42.
30
Paid cash as an installment payment on the mortgage, $1,880.
Of this amount, $680 represents a reduction in the mortgage
principal, and the remainder is interest expense.
30
Received and paid water bill, $432.
30
Bought additional boats from Stanski and Son for $4,852,
paying $452 down, with the remainder due in thirty days.
30
Moore withdrew cash (dividend) for personal use, $1,156.
30
Received $4,632 in cash as income for the use of the boats.

6. 30
Actual sales for vending machines for the month amounted to
$2,320. Ten percent of $2,320 equals $232. Since you have
already recorded $180 (see June 3 transaction) as unearned
concession income, record the additional $52 as revenue (cash
was not received.) earned from the vending machine operator.
Instructions from Mr. Moore:
1.
Mr. Moore’s CPA has created an accounting system - use copies
of forms that are on Canvas such as the general journal and
general ledger and for the trial balance, income statement,
balance sheet, etc. Each JE should have an explanation. Posting
should include posting references. Be sure to enter/complete the
title
of the trail balance, income statement, balance sheet, etc.
2.
Journalize the transactions, starting on page 1 of the general
journal; June 1 - 2 have already been journalized.
3.
Post the general journal transactions to the general ledger
accounts.
4.
Prepare a trial balance (check figure $255,101.50).
5.
Moore identified several accounts that may need to be adjusted.
Use the trial balance to determine the balances and adjust the
accounts. Data for the adjustments are as follows:
a.

7. Insurance expired during the month, $86.
b.
Depreciation of sailboats for the month, $804.
c.
Depreciation of fan system for the month, $163.
d.
Depreciation of pool structure for the month, $600.
e.
Wages accrued at June 30, $696.
7.
Journalize adjusting entries.
8.
Post adjusting entries to the general ledger accounts.
9.
Prepare an adjusted trial balance (check figure $257,364.50).
10.
From the adjusted trial balance prepare the income statement
(check figure $1,379.42).
11.
From the adjusted trial balance prepare the statement of owner's
equity.
12.
From the adjusted trial balance prepare the balance sheet.
13.

8. Close the accounts.
14.
Prepare a post closing trial balance.
a.
Based on the information you have developed, what is your
opinion of the possible success of this company in the future?
Why? (Write your answer on the last page of the Excel
workbook).
Check Figures
Cash Account balance $14,002.42
Trial balance $255,101.50 (instruction 4, above)
Adjusted trial balance, $257,364.50 (instruction 9, above)
Net income, $1,379.42 (instruction 10, above)
Post-closing trial balance, $241,743.00