Western Carolina University - ACCT 251ACC 251 Practice Set Fall 2018.>Fall 2018

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Instructions: 1. Prepare journal entries to record external transactions. 2. Post journal entries to general ledger T accounts. 3. Prepare journal entries to record adjusting entries. 4. Post the ... adjusting entries to the general ledger T accounts (include a balance on each account) 5. Prepare an adjusted trial balance. 6. Prepare, using good form, an income statement, a statement of stockholders’ equity, and a classified balance sheet. 7. Prepare closing journal entries. 8. Post the closing entries to the general ledger T accounts (include a balance on each account). 9. Prepare a post-closing trial balance. 10. Calculate ratios. Company Information: Doodles provides printing services to customers. They began operations on January 1, 2018. In January 2019, they realized the current VP had not created the records in an accounting system, and due to a time issue, the financial information must be recorded by hand to produce GAAP based financials for the year ending 2018. As such, they have hired you as the Accountant to get the manual system completed before implementing software for 2019. The research begins: First, you find the company uses straight-line depreciation for all long-term depreciable assets. They also must use the Allowance method to account for uncollectible accounts to be in line with GAAP. The company has decided to use the calendar year, so December 31 is the company’s year-end. The company hired two employees on November 1, 2018. The employees will receive a salary of $2,000 each. Payroll is processed on the 27th of the month and paid on the last day of each month. The tax rates are 10% for Federal Income Tax, 8% for state income tax, 7.65% for FICA taxes, and 6.2% for federal and state unemployment on the first $7,000 of each employee earnings per year. Upon further investigation, you find the following information related to the company’s transactions during 2018. Process the information and produce GAAP based financials for Doodles, Inc for the year ending December 31, 2018. Page 1 of 12Doodles Practice Set Doodles Inc. engaged in the following transactions in 2018. Jan 1 The owner invested $70,000 into the company in exchange for 5,000 shares of no-par common stock. Jan 1 Purchased a computer system for $32,000. Jan 14 Purchased $1,200 of supplies on account. Feb 25 Invoiced clients for services provided on account, $36,000. Mar 31 Paid rent for two years, $19,200. April 1 The company borrowed $50,000 from Bank of America. May 14 Collected $8,500 on account. June 1 Purchase a delivery van to delivery copies to customers, the van had a purchase price of $53,000, taxes on the van were $5,000 and document charges of $1,500 were paid. July 31 Paid $800 on account for supplies purchased on January 14. Aug 10 Received cash for services provided, $10,200. Sept 1 Paid utilities of $4,000. Oct 1 Received $30,000 in advance for services to be provided in the future. Nov 15 Paid for an ad in the local newspaper, $1,500. Nov 27 Processed employee payroll and employer taxes, gross earnings was $4,000. Nov 30 Paid the employee salaries, taxes are not due until January. Dec 15 The company declared and paid $6,000 in dividends. Dec 30 Invoiced clients for services performed totaling $9,000. Dec 27 Processed employee payroll and employer taxes, gross earnings was $4,000. Dec 30 Paid the employee salaries, taxes are not due until January. [Show More]

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