CASE STUDY 1 -THE COMPLETE ACCOUNTING CYCLE

Name :

This Case Study is worth 100 points or 10% of your final course grade.
This Case Study relates to TCOs D and E and Chapters 3 and 4.
MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW.
There are 10 sheets in the Workbook including this one.
All of the Information you need for the project is located in this Workbook.
Requirements
Requirement 1Prepare the Journal Entries in the General Journal
Requirement 2Post Journal Entries to the General Ledger
Requirement 3Prepare a Trial Balance
Requirement 4Prepare the Adjusting Entries
Requirement 5Post Adjusting Entries to the General Ledger
Requirement 6Prepare an Adjusted Trial Balance
Requirement 7Prepare the Financial Statements
Requirement 8Prepare the Closing Entries
Requirement 9Post Closing Entries to the General Ledger
Requirement 10Prepare the Post Closing Trial Balance

Sheet in Workbook
Journal Entries
General Ledger
Trial Balance
Adjusting Entries
General Ledger
Adjusted TB
Financial Statements
Closing Entries
General Ledger
Post Closing TB

Hint for success: Review the Week 2 Lecture prior to starting this project.
There are also hints contained within certain cells on some of the worksheet tabs.
You can hover over the red pointer at the top right-hand corner of the cell to read the
Hints are provided for the following balances:
1) The debits for the journal entries are on the Journal Entries tab.
2) The credits for the journal entries are on the Journal Entries tab.
3) The cash balance is on the General Ledger tab.
4) The debits for the trial balance are on the Trial Balance tab.
5) The credits for the trial balance are on the Trial Balance tab.
6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab.
7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab.
8) Net income for the income statement is on the Financial Statements tab.
9) Retained earnings as of March 31 are on the Financial Statements tab.
10) Total assets for the balance sheet are on the Financial Statements tab.
11) Total liabilities and shareholders' equity for the balance sheet are on the Financial Statements tab.
12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab.
13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab.

s project.
e worksheet tabs.
f the cell to read the hint.

ments tab.

During its first month of operation, the Flower Landscaping Corporation, which specializes in residential landscaping,
completed the following transactions.
March 1

Began business by making a deposit in a company bank account of $72,000, in exchange

for 7,200 shares of $10 par value common stock.

March 1

Paid the current month's rent, $4,500.

March 1

Paid the premium on a 1-year insurance policy, $3,300.

March 7

Purchased supplies on account from Parkview Company, $900.

March 10 Paid employee salaries, $2,200.

March 14 Purchased equipment from Hammond Company, $9,000. Paid $1,500 down and the balance was
placed on account. Payments will be $375.00 per month for 20 months. The first payment is due 4/1.
Note: Use accounts payable for the balance due.
March 15 Received cash for landscaping revenue for the first half of March, $4,896.
March 19 Made payment on account to Parkview Company, $450.
March 31 Received cash for landscaping revenue for the last half of March, $5,304.
March 31 Declared and paid cash dividend of $1,000.

Prepare journal entries to record the March transactions in the General Journal below.
General Journal
Date
Description(Account Name) Debit
Credit
1-Mar cash
72,000
common stock
72,000
(Issued stocks for cash)
rent expense
4,500
cash
4,500
(Paid the month rent with cash)
prepaid insurance
3,300
cash
3,300
(Paid a one year insurance in dvance)
7-Mar
supplies
900
Accounts payable
900
(purchased supplies on account)
10-Mar
salaries expense
2,200
cash
2,200
(Paid employees' salaries)
14-Mar
equipment
9,000

This Sheet will be used for Requirements 2, 5, and 9

Requirement #2:
Post the March journal entries to the following T-accounts and compute ending balances.

beginning
March 15
march 31

March 1

Cash (111)
72000
4896
5304
4500
3300
2200
1500
450
1000

Landscaping Revenue (411)

10200 4896
March 15
5304
March 31
March 1
March1
March 10
March 14
March 19
March 31

Prepaid Insurance (117)

3300
. 275

March 1

Rent Expense (511)

4500
4500

March 7

3025
Supplies (119)
900

0
425

Salaries Expense (512)

March 10
2200
2200

March 14

475
Equipment (144)
9000

0
Insurance Expense (513)
275
275

0
Accumulated Depreciation-Equipment (145)
150

Supplies Expense (514)

425
425

0
Accounts Payable (212)
900
March 7
7500
March 14
March 19
450

Depreciation Expense (515)

150
150

0
Income Tax Payable (213)
795

Income Tax Expense (516)

795
795

Common Stock (311)

720000 Beginning

0
Income Summary (517)
10200
8345
1855

Retained Earnings (312)

1855
1000

March 31

Dividends (313)
1000
1000

Requirement #3:
Prepare a trial balance for March in the space below.

Flower Landscaping Corporation

Trial Balance
March 31

Cash
Prepaid insurance
Supplies
Equipments
accounts payable
Common Stock
Landscaping revenue
Rent expense
Salaries expense
Dividends

69,250
3,300
900
9,000
7,950
72,000
10,200
4,500
2,200
1,000

90,150

90,150

Requirement #4:
Prepare adjusting entries using the following information in the General Journal
below. Show your calculations!
a) One month's insurance has expired.
b) The remaining inventory of supplies is $475.
c) The estimated depreciation on equipment is $150.
d) The estimated income taxes are $795.

Date

General Journal
Description(Account Name)
Insurance expense
Prepaid insurance

Debit

Credit
275
275

supplies expense
supplies

425

depreciation expense
Accumlated depreciation

150

income tax expense

income tax payable

795

425

150

795

Requirement #5:
Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.
Just add to the balances that are already listed.

Requirement #6:
Prepare an adjusted trial balance in the space below.
Flower Landscaping Corporation
Adjusted Trial Balance
March 31

cash
prepaid insurance
supplies
equipment
Accumlated depreciation on equipment
accounts payable
Income tax payable
common stock
landscaping revenue
rent expense
salary expense
Income tax expense
insurance expense
supplies expense
depreciation expense
dividends

69250
3025
475
9000
150
7950
795
72000
10200
4500
2200
795
275
425
150
1000
91095

91095

Requirement #7:
Prepare the financial statements for the Flower Landscaping Corporation as of March 31 in the space below.
You will only be preparing the income statement, statement of retained earnings, and the balance sheet.
The statement of cash flows is a required financial statement, but is not required for this project.
Flower Landscaping Corporation
Income Statement
For the Month Ending March 31
Revenues:
Landscaping Revenue
Expenses:
Rent Expense
Salaries Expense
Insurance Expense
Supplies Expense
Depreciation Expense
Income Tax Expense
Total Expenses
Net Income

Flower Landscaping Corporation

Statement of Retained Earnings
For the Month Ending March 31

$ 10,200

4,500
2,200
275
425
150
795
8,345
$ 1,855

Retained Earnings, March 1

Add: Net Income
Subtotal
Less: Dividends
Retained Earnings, March 31

1,855

1,000
$ 855

e space below.

Flower Landscaping Corporation

Balance Sheet
March 31
Assets:
Cash
Prepaid Insurance
Supplies
Equipment
Less: Accum. Depr.
Total Assets
Liabilities:
Accounts Payable
Income Tax Payable
Total Liabilities
Stockholders' Equity:
Common Stock
Retained Earnings
Total Stockholders' Equity
Total Liabilities and
Stockholders' Equity

$ 69,250
3,025
475
9,000
150
81,600

7,950
795
8,745
72,000
855
72,855
$ 81,600

Requirement #8:
Prepare the closing entries at March 31 in the General Journal below.
Hint: Use the balances for each account which appear on the Adjusted
Trial Balance for your closing entries.
General Journal
Date
Description (Account Name)
Debit
Credit
2014
service revenue
10200
31-Mar
income summary
10200
(to close revenue account)
income summary
8345
rent expense
4500
salary expense
2200
income tax expense
795
Insurance expense
275
supplies expense
425
depreciation expense
150
(to close expense account)
income summary
1855
retained earnings
1855
(to close income to retained earnings)
retained earnings
1000
dividends
1000
to close dividends to retained earnings
Requirement #9:
19545
19545
Post the closing entries to the General Ledger T-accounts and compute ending balances.
Just add to the adjusted balances already listed.

Requirement #10:
Prepare a post-closing trial balance as of March 31 in the space below.

Flower Landscaping Corporation

Post-Closing Trial Balance
March 31
cash
prepaid insurance
supplies
equipent
accumlated depreciation
accounts payable
income tax payable
common stock
retained earnings

69,250
3,025
475
9,000
150
7,950
795
72,000
855
81,750

81,750

Case Study 1 Rubric

Please note that this rubric provides a general guideline but you can sc
and the maximum number of points for that step depending on the acc
of your work.
Criteria

Step 1
Prepared
Journal
Entries (20
points)

Outstanding
Journal
entries use
accurate
accounts and
amounts; and
debits and
credits are
used
correctly.

Good

Poor

Very Poor

Minor errors
Errors in
Evidence of an attempt to complete
such as
computations that the journal entries.
incorrect
resulted in
account names incorrect amounts
or credits listed to be debited and
prior to debits. credited.

20 points
Posting is
Step 2
correct
leading to
Posted to
the General accurate
Ledger (10 account
balances.
pts)

16 points
Posting is
mostly correct
but minor
errors are
evident.

10 points
Correct
Step 3
account
Prepared a names and
Trial Balance balances so
(10 points) to arrive at a
correct trial
balance.

8 points
6 points
4 points
Some minor
Errors in
Evidence of an attempt to complete
errors such as computations that the trial balance.
incorrect
resulted in
account names incorrect amounts
or incorrect
to be debited and
totals due to
credited.
errors in prior
steps.

Step 4
Prepared
Adjusting
Journal
Entries (10
points)

12 points
8 points
Posting has
Posting is done poorly but does show
several errors that evidence of an attempt to complete.
resulted in
incorrect account
balances.

10 points
Journal
entries use
accurate
accounts and
amounts; and
debits and
credits are
used
correctly.

8 points
Journal entries
mostly use
accurate
accounts and
amounts; and
debits and
credits are
used correctly.

6 points
Journal entries
have some errors
in use of accounts
and amounts; and
debits and credits
are only somewhat
used correctly.

10 points

8 points

6 points

4 points
Journal entries have some errors in
use of accounts and amounts; and
debits and credits are not used
correctly.

4 points

Posting is
correct
leading to an
Posted and accurate trial
Prepared an balance.
Unadjusted
Trial Balance
(10 points)
10 points
All
three
Step 7
Financial
Statements
Prepared
are prepared
Financial
Statements accurately
(20 points) and in an
appropriate
format.

Steps 5
and 6

Step 8
Prepared
Closing
Journal
Entries (10
points)

Steps 9
and 10
Posted and
Prepared
Post-Closing
Trial Balance
(10 points)

Posting is
mostly correct
leading to a
mostly correct
trial balance.

Posting has
several errors
leading to a trial
balance with
several errors.

Posting is done poorly or not at all,

leading to inaccurate or no trial
balance.

8 points
6 points
Two of the
One of the three
three financial Financial
Statements are Statements are
prepared
prepared
accurately and accurately and
mostly in an
mostly in an
appropriate
appropriate format,
format, one
two statements
statement has have some errors.
some errors.

4 points
One or fewer of four Financial
Statements are prepared accurately
and mostly in an appropriate format,
three or all statements have some
errors.

20 points
Journal
entries use
accurate
accounts and
amounts; and
debits and
credits are
used
correctly.

16 points
Journal entries
mostly use
accurate
accounts and
amounts; and
debits and
credits are
used correctly.

12 points
Journal entries
have some errors
in use of accounts
and amounts; and
debits and credits
are only somewhat
used correctly.

8 points
Journal entries have some errors in
use of accounts and amounts; and
debits and credits are not used
correctly.

10 points
Posting is
correct
leading to an
accurate trial
balance.

8 points
Posting is
mostly correct
leading to a
mostly correct
trial balance.

6 points
Posting has
several errors
leading to a trial
balance with
several errors.

4 points
Posting is done poorly or not at all,
leading to inaccurate or no trial
balance.

10 points

8 points

6 points

4 points

Total Points Earned Out of

100 Points

but you can score anywhere between 0

ing on the accuracy and completeness
Points
Award
ed