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On January1 2013 Candy Cain s Candy Company a company that produces candy for specific events and holidays for large corporations is solely owned by Candace Cain had the following account balances in their general ledger (see attached page of T accounts): During the month of January the company engaged in the following transactions: Received $3600 cash from customers as payment on account. 3 Paid $5000 towards a new vehicle that costs $30000. The remainder was borrowed from the bank. 5 Candace deposited a dividend check of $500 into her personal account. 9 Payday employees are paid a total of $3200 for a two week 8 hours a day 5 days a week work schedule; some of which is for work performed in December. (HINT: Look in the General Ledger) 12 Candy Cain s Candy Company received $12000 cash from customers for services to be rendered in April. 13 Paid $600 for six months of ads in the Candytime a magazine for candy makers with ads to be run monthly starting this month 14 Purchased an insurance policy that covered the company for two years $7200. 15 Purchased supplies on account $3000. 16 Recorded serviced rendered on account of $15000. 20 Received $6000 from Mardi Gras Parties Inc. for services rendered. 21 Paid for 80% of the CURRENT balance in Accounts Payable. 22 Received $10000 from customers on account. 23 Payday employees are paid a total of $3200. 28 Paid $300 utility bill for January; Paid landlord who raised the rent starting February 1 to $750. 29 A new employee was hired to help with the marketing of products. She starts on February 1st she will be making $1500 per week working Monday through Friday. 31 Candace received $5000 from the company as a dividend in lieu of salary. Step by step through the accounting cycle: Write journal entries for each transaction listed above on notebook paper: This is your General Journal. Post each transaction to the ledger checking off each entry as you enter it into the ledger. After all entries are posted then strike a balance in each account. Each one should have its normal balance. Prepare an unadjusted trial balance on the worksheet provided to test DR = CR (follow model in Chapter 4 or in lecture notes) recording only the DR or CR balances for each account. If DR don t = CR find your errors. This should total $128153 and the Cash balance should be $5103. Prepare adjusting entries in the General Journal at the end of January. Note that the problem is based on the actual calendar for January 2009. Some useful information follows: 1) Depreciation is for the month is $433. 2) Unearned Fees at January 31 are $10000. 3) Supplies on hand at the end of January total $2200. 4) Prepaid Insurance balance includes a policy that expires $400 per month. 5) Record accrued salaries for one last week of January 31. 6) Record the expiration of one month of insurance on the new policy. 7) Accrue interest on the note payable of $250. 8) Adjust for expired rent 9) Adjust for advertising services received. Be sure to SHOW CALCULATIONS for these!!! Round to nearest dollar! Record the adjusting entries in the adjustments columns on the worksheet and also post them to the General Ledger. Strike new balances in the accounts in the GL. Then add/subtract the adjustments as appropriate from the unadjusted trial balance to the adjusted trial balance (are these amounts the same as the balances you found in the ledger in part f.?) Follow model provided in the text. Test to see if DR = CR in the Adjusted Trial Balance columns on the worksheet. If not find your errors. Sort amounts out from the adjusted TB to appropriate columns (Income Statement and Balance Sheet) on the worksheet. Find balances in each column. Do DR = CR here? And why not However is the difference between the two sets of columns the same? (It should be equal to $9717). Prepare three financial statements: Income Statement of Owner s Equity and Balance Sheet in GOOD FORM. Use examples in the textbook. Now write all necessary closing entries in your General Journal and post them to the General Ledger. Finally prepare a Post Closing Trial Balance (see Blackboard Course Materials for an example) to test the accuracy of the journalizing/posting of the closing entries.

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