You’ve just secured a new client in your accounting practice, Howard’s Flight Radio Management Corporation (HFRM), a brand new small business specializing in flight management systems (FMS). The owner, Howard Allan, is a former Air Force pilot and retired Colonel, but definitely not an accountant. Your job is to help Howard put his affairs in order. Luckily, Howard has only been in operation for a month and things have not gotten too out of hand yet! Howard has to submit his financial statements to his investors and doesn’t know where to begin. It’s your job to go through the complete accounting cycle to prepare the financial statements for the HFRM.
Use this table to help ensure you use the correct worksheet for each requirement.
RequirementRequirement DescriptionWorksheet Name1Prepare the Journal Entries in the General Journal1 – Journal Entries2Post Journal Entries to the General Ledger2 – General Ledger3Prepare a Trial Balance3 – Trial Balance4Prepare the Adjusting Entries4 – Adjusting Entries5Post Adjusting Entries to the General Ledger2 – General Ledger6Prepare an Adjusted Trial Balance5 – Adjusted TB7Prepare the Financial Statements6 – Financial Statements8Prepare the Closing Entries7 – Closing Entries9Post Closing Entries to the General Ledger2 – General Ledger10Prepare the Post Closing Trial Balance8 – Post Closing Trial Balance11Compute Ratios11 – Ratios12Interpret the Ratios12 – Interpretation of Ratios
Use the embedded assistance in the template, guidance in your textbook, and examples in the weekly assignments to complete this project.
MGMT210: Course Project
Requirement
1
2
3
4
5
6
7
8
9
10
11
12
MGMT210: Course Project
Requirement Description
Prepare the Journal Entries in the General Journal
Post Journal Entries to the General Ledger
Prepare a Trial Balance
Prepare the Adjusting Entries
Post Adjusting Entries to the General Ledger
Prepare an Adjusted Trial Balance
Prepare the Financial Statements
Prepare the Closing Entries
Post Closing Entries to the General Ledger
Prepare the Post Closing Trial Balance
Compute Ratios
Interpret the Ratios
roject
Worksheet Name
1 – Journal Entries
2 – General Ledger
3 – Trial Balance
4 – Adjusting Entries
2 – General Ledger
5 – Adjusted TB
6 – Financial Statements
7 – Closing Entries
2 – General Ledger
8 – Post Closing Trial Balance
11-Ratios
12-Interpretation of Ratios
Course Project Overview
Scenario
Requirements
Guidelines
The Course Project consists of 12 Requirements for you to complete. The Course Project is due
at the end of Week 9. See the Modules section for due date information. All of the information
you need to complete the Course Project is located in this Workbook.
• There are eight worksheets in the workbook you will need to complete.
• A list of March transactions
• A Chart of Accounts reference sheet
• A Grading Rubric to help explain what is expected.
• Each worksheet has the Check Figures embedded as a comment.
You’ve just secured a new client in your accounting practice, Howard’s Flight Radio
Management Corporation (HFRM), a brand new small business specializing in flight
management systems (FMS). The owner, Howard Allan, is a former Air Force pilot and retired
Colonel, but definitely not an accountant. Your job is to help Howard put his affairs in order.
Luckily Howard has only been in operation for a month and things have not gotten too out of
hand yet! Howard has to submit his financial statements to his investors and doesn’t know
where to begin. It’s your job to go through the complete Accounting cycle to prepare the
financial statements for the HFRM.
Use the embedded assistance in the template, guidance in your textbook, and examples in
the weekly assignments to complete this project. Should you have any questions contact your
professor.
Milestone 1 is due in Week 3 – This includes project requirements 1-3.
Milestone 2 is due in Week 6 – This includes project requirements 4-7.
Milestone 3 is due in Week 9 – This includes project requirements 8-12.
Before You Begin:
•
Review the Week 2 Lecture prior to
starting work on this project.
•
Print the Chart of Accounts and
October Transactions worksheets for
your reference. You will need to refer
to both throughout the project.
•
Review the Grading Criteria.
•
SAVE your work frequently in this
During its first month of operation, HFRM completed the following transactions.
March Transactions
Date
March 1
Transaction Description
Began business by making a deposit in a company bank
account of $22500, in exchange for 2,250 shares of $10 par
value common stock.
March 1
March 1
March 3
Paid the premium on a 1-year insurance policy, $2,160.
Paid the current month’s rent expense, $1,800.
Purchased repair equipment from Fred Company, $5,800. Paid
$2200 down and the balance was placed on account. The rest
will be paid in equal payments over the next 12 months. The first
payment is due 4/1. Note: Use Accounts Payable for the
Balance Due.
March 8
Purchased repair supplies from Gary Company on credit, $650.
March 10
March 11
Paid telephone bill for March, $400.
Cash flight management system (FMS) repair revenue for the
first third of March, $2000.
March 18
March 20
Made payment to Gary Company, $400.
Cash FMS repair revenue for the second third of March, $2,450.
March 31
Cash FMS repair revenue for the last third of March, $1,500.
March 31
March 31
Paid the current month’s electic bill, $300.
Declared and paid cash dividend of $1,000.
Use the following account descriptions for journal entries.
Chart of Accounts
Account Type
Assets
Account
Number
Account Title
Normal Balance
111
117
119
144
145
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accum Dep -Repair Equipment
Debit
Debit
Debit
Debit
Credit
212
213
Accounts Payable
Income Tax Payable
Credit
Credit
311
312
313
Common Stock
Retained Earnings
Dividends
Credit
Credit
Debit
411
Bicycle Repair Revenue
Credit
511
512
513
514
515
516
517
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Expense
Dep Expense – Repair Equipment
Income Tax Expense
Electric Expense
Debit
Debit
Debit
Debit
Debit
Debit
Debit
Liabilities
Stockholders Equity
Revenue
Expenses
Review Chapter 2,
p. 90 for more
information on the
Chart of Accounts
Anything in yellow needs to be manually inputted
Must be Manually Updated From “March Transactions” Data
Event
Cash
Shares
Share Price
Total Stock Value
Insurance
Month’s Rent
Repair Equipment
Paid Down on Equipment
Equipment Balance
Repair Supplies on Credit
Telephone Bill March
Revenue 3/1-3/10
Paid Gary Company
Revenue 3/10-3/20
Revenue 3/20-3/31
Electic Bill
Declared and paid Dividend
Entry Monthly Exp
22500
2250
10
22500
2160
180
1800
5800
2200
3600
300
650
400
2000
400
2450
1500
300
1000
Must be Manually Updated From “Adjusting Entries” Data
Monthly Insurance Exp
Inventory Repair Supplies
Repair Equip Depreciation
Income Tax
180
200 450
150
100
Automatically Updated From “March Transactions” Data
Total Revenue
Total Monthly Expense
Accounts Payable
5950
3380
3850
Journal Entries
REQUIREMENT #1: Prepare journal entries to record the March transactions in the General
Journal below. Remember that Debits must equal Credits—All of your Journal Entries
should balance.
General Journal
Date
Account
Number from
Chart of
Accounts tab
Account Title from Chart of Accounts tab Debit
Credit
Once you’ve
requirement
General Journ
complete Req
on the Genera
worksheet.
Journal Entries
0
–
Journal Entries
Once you’ve completed this
requirement print your
General Journal to
complete Requirement #2
on the General Ledger
worksheet.
REQUIREMENT #2: Post the March journal entries to the following T-Accounts and compute ending balances.
Date
Cash (111)
Date
FMS Repair Revenue (411)
Prepaid Insurance (117)
Store Rent Expense (511)
Repair Supplies (119)
Telephone Expense (512)
Repair Equipment (144)
Insurance Expense (513)
Accum. Depr.-Repair Equipment (145)
Repair Supplies Expense (514
Accounts Payable (212)
Depr. Exp.-Repair Equipment (5
Income Taxes Payable (213)
Income Taxes Expense (516)
Common Stock (311)
Electric Expense (517)
Retained Earnings (312)
Dividends (313)
ompute ending balances.
S Repair Revenue (411)
ore Rent Expense (511)
lephone Expense (512)
surance Expense (513)
ir Supplies Expense (514)
This worksheet will be used to complete
Requirements #2, #5 and #9. Instructions for
#5 can be found on the Adjusting Entries
Worksheet. Instructions for #9 can be found
on the Closing Entries Worksheet.
xp.-Repair Equipment (515)
me Taxes Expense (516)
lectric Expense (517)
Journal Entries
REQUIREMENT #3: Prepare a trial balance for March in the space below.
Account
Number
Howard’s Flight Radio Management Corporation
Trial Balance
March 31
Account
Title
Balance
Debit
Credit
0
0
Journal Entries
Only enter
accounts that
have a balance.
Journal Entries
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 repair supplies is $200.
c) The estimated depreciation on repair equipment is $150.
d) The estimated income taxes are $100.
Requirement #5: Post the adjusting entries on March 31 below to the General Ledger T-accounts and
compute adjusted balances. Just add to the balances that are already listed.
Date
Account
Number from
Chart of
Accounts tab
General Journal
Account Title from Chart of Accounts tab
Debit
0
Journal Entries
ournal below. Show
counts and
Credit
0
Journal Entries
REQUIREMENT #6: Prepare an Adjusted Trial Balance in the space below.
Account
Number
Howard’s Flight Radio Management Corporation
Adjusted Trial Balance
March 31
Account
Title
Balance
Debit
Credit
0
0
Journal Entries
Only enter
accounts that
have a balance.
Requirement #7: Prepare the financial statements for Howard’s Flight Radio Management Corporation as
You will only be preparing the Income Statement, Statement of Retained Earning, and the Balance Shee
The Statement of Cash Flows is a required Financial Statement, but is not required for this project.
Howard’s Flight Radio Management Corporation
Income Statement
For the Month Ending March 31
Howard’s Flight Radio Management Corporation
Statement of Retained Earnings
For the Month Ending March 31
Revenues:
FMS Repair Revenue
Total Revenue
Retained Earnings, March 1
Add: Net Income
Subtotal
Less : Dividends
Retained Earnings, March 31
Expenses:
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Exp.
Depreciation Exp.
Income Taxes Expense
Electric Expense
Total Expenses
Net Income
anagement Corporation as of March 31 in the space below.
ning, and the Balance Sheet.
uired for this project.
Management Corporation
Retained Earnings
Ending March 31
Howard’s Flight Radio Management Corporation
Balance Sheet
March 31
Assets:
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Less: Accum. Depr.
Total Assets
Liabilities and Stockholders’ Equity
Liabilities:
Accounts Payable
Income Taxes Payable
Total Liabilities
Stockholders’ Equity:
Common Stock
Retained Earnings
Total Stockholders’ Equity
Total Liabilities & Stockholders’
Equity
Journal Entries
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.
Requirement #9: Post the closing entries to the T-Accounts on the General Ledger worksheet and
compute ending balances. Just add to the adjusted balances already listed.
General Journal
Date
Account
Number from
Chart of
Accounts
tab
Account Title from Chart of Accounts tab
Debit
Journal Entries
0
Journal Entries
Hint: Use the
g entries.
sheet and
Credit
Journal Entries
0
Journal Entries
Requirement #10: Prepare a post-closing trial balance as of March 31 in the space
below.
Account
Number
Howard’s Flight Radio Management Corporation
Post-Closing Trial Balance
March 31
Account
Title
Balance
Debit
Credit
–
–
Requirement #11: Ratios
Using the data from Income Statement and Balance Sheet prepared by you in step 7 compute
Current Ratio
Formula
Current Assets / Current Liabilities
Leverage Ratio
Formula
Average Total Assets / Average Common Stockholders’ Equity
Asset Turnover Ratio
Formula
Net Sales / Average Total Assets
Net Profit Margin Ratios
Formula
Net Income – Preferred Dividends / Net Sales
Rate of Return on Total Assets
Formula
Net Profit Margin Ratio X Assets Turnover Ratio
(Net Income – Preferred Dividends/ Net Sales ) X(Net Sales / Average Total Assets)
Alternatively
Net Income – Preferred Dividends / Average Total Assets
d by you in step 7 compute the following ratios.
Computation
=
Computation
=
Computation
=
Computation
=
Computation
X
=
Computation
=
Please enter what each of the ratio results from Spreadsheet 11 mean for the company.
mpany.
Project 1 Grading Rubric – Students
Criteria
Excellent
Good
Poor
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
Step 1
accounts and
Milestone 1 —Journal Entries
accounts and
and amounts; and
amounts; and
(20 points)
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
Step 1 Grading
Scale
20-18
Steps 2 and 3
Posting is correct
—Posted an
leading to an
Milestone 1 Unadjusted Trial
accurate trial
Balance. (13
balance.
points)
Step 2 & 3
Grading Scale
13-11
17-15
14-12
Posting is mostly
correct leading to
a mostly correct
trial balance.
Posting has several
errors leading to a
trial balance with
several errors.
10-8
7-5
Milestone 1
Step 4
—Adjusting
Milestone 2
Journal Entries
(8 points)
Step 4 Grading
Scale
Steps 5 and 6
—Posted and
Milestone 2 Adjusted Trial
Balance. (10
points)
Step 5 & 6
Grading Scale
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
accounts and
accounts and
and amounts; and
amounts; and
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
8-7
Posting is correct
leading to an
accurate trial
balance.
10-9
6-5
4-3
Posting is mostly
Posting has several
correct leading to errors leading to a
a mostly correct
trial balance with
trial balance.
several errors.
8-7
6-5
Step 7
—Financial
Milestone 2
Statements (15
points)
Step 7 Grading
Scale
All four financial
statements are
prepared
accurately and in
an appropriate
format.
15-13
Three of four
financial
statements are
prepared
accurately and
mostly in an
appropriate
format, one
statement has
some errors.
12-10
Two of four
financial
statements are
prepared
accurately and
mostly in an
appropriate format,
two statements
have some errors.
9-7
Milestone 2
Step 8
—Closing
Milestone 3
Journal Entries
(7 points)
Step 8 Grading
Scale
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
accounts and
accounts and
and amounts; and
amounts; and
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
7-6
Steps 9 and 10
Posting is correct
—Posted a Postleading to an
Milestone 3 closingTrial
accurate trial
Balance. (10
balance.
points)
Step 9 & 10
Grading Scale
10-9
5-4
3-2
Posting is mostly
Posting has several
correct leading to errors leading to a
a mostly correct
trial balance with
trial balance.
several errors.
8-7
6-5
Ratios are calculated Ratios are calculated Ratios calculations
correctly. Math
mostly correctly.
have some errors.
process
is
present.
Math
process
is
Math process is
Steps 11 and 12
Interpretation of
present.
present.
—Ratios and
Milestone 3
ratios
are
accurate.
Interpretation
of
Interpretation of
Interpretation.
ratios are mostly
ratios is flawed.
(17 points)
accurate.
Step 11 & 12
Grading Scale
Milestone 3
17-15
14-12
11-9
Very Poor
Unacceptable
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
11-9
8-0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-2
1-0
Points
Availabl
e
20
13
33
Total
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
2-1
0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-3
2-0
8
10
One or fewer of
four financial
statements are
The submission does
prepared
not meet this
accurately and
requirement. Littlemostly in an
to-no work was
appropriate format,
completed.
three or all
statements have
some errors.
6-4
3-0
15
33
Total
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
1
0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-3
2-0
Ratios calculations
have various errors.
Math process is
present.
Interpretation of
ratios is severely
flawed.
The submission does
not meet this
requirement. Littleto-no work was
completed. No
math process is
present.
8-6
5-0
7
10
17
Total
34
MGMT210: Course Project
Requirement
1
2
3
4
5
6
7
8
9
10
11
12
MGMT210: Course Project
Requirement Description
Prepare the Journal Entries in the General Journal
Post Journal Entries to the General Ledger
Prepare a Trial Balance
Prepare the Adjusting Entries
Post Adjusting Entries to the General Ledger
Prepare an Adjusted Trial Balance
Prepare the Financial Statements
Prepare the Closing Entries
Post Closing Entries to the General Ledger
Prepare the Post Closing Trial Balance
Compute Ratios
Interpret the Ratios
roject
Worksheet Name
1 – Journal Entries
2 – General Ledger
3 – Trial Balance
4 – Adjusting Entries
2 – General Ledger
5 – Adjusted TB
6 – Financial Statements
7 – Closing Entries
2 – General Ledger
8 – Post Closing Trial Balance
11-Ratios
12-Interpretation of Ratios
Course Project Overview
Scenario
Requirements
Guidelines
The Course Project consists of 12 Requirements for you to complete. The Course Project is due
at the end of Week 9. See the Modules section for due date information. All of the information
you need to complete the Course Project is located in this Workbook.
• There are eight worksheets in the workbook you will need to complete.
• A list of March transactions
• A Chart of Accounts reference sheet
• A Grading Rubric to help explain what is expected.
• Each worksheet has the Check Figures embedded as a comment.
You’ve just secured a new client in your accounting practice, Howard’s Flight Radio
Management Corporation (HFRM), a brand new small business specializing in flight
management systems (FMS). The owner, Howard Allan, is a former Air Force pilot and retired
Colonel, but definitely not an accountant. Your job is to help Howard put his affairs in order.
Luckily Howard has only been in operation for a month and things have not gotten too out of
hand yet! Howard has to submit his financial statements to his investors and doesn’t know
where to begin. It’s your job to go through the complete Accounting cycle to prepare the
financial statements for the HFRM.
Use the embedded assistance in the template, guidance in your textbook, and examples in
the weekly assignments to complete this project. Should you have any questions contact your
professor.
Milestone 1 is due in Week 3 – This includes project requirements 1-3.
Milestone 2 is due in Week 6 – This includes project requirements 4-7.
Milestone 3 is due in Week 9 – This includes project requirements 8-12.
Before You Begin:
•
Review the Week 2 Lecture prior to
starting work on this project.
•
Print the Chart of Accounts and
October Transactions worksheets for
your reference. You will need to refer
to both throughout the project.
•
Review the Grading Criteria.
•
SAVE your work frequently in this
During its first month of operation, HFRM completed the following transactions.
March Transactions
Date
March 1
Transaction Description
Began business by making a deposit in a company bank
account of $22500, in exchange for 2,250 shares of $10 par
value common stock.
March 1
March 1
March 3
Paid the premium on a 1-year insurance policy, $2,160.
Paid the current month’s rent expense, $1,800.
Purchased repair equipment from Fred Company, $5,800. Paid
$2200 down and the balance was placed on account. The rest
will be paid in equal payments over the next 12 months. The first
payment is due 4/1. Note: Use Accounts Payable for the
Balance Due.
March 8
Purchased repair supplies from Gary Company on credit, $650.
March 10
March 11
Paid telephone bill for March, $400.
Cash flight management system (FMS) repair revenue for the
first third of March, $2000.
March 18
March 20
Made payment to Gary Company, $400.
Cash FMS repair revenue for the second third of March, $2,450.
March 31
Cash FMS repair revenue for the last third of March, $1,500.
March 31
March 31
Paid the current month’s electic bill, $300.
Declared and paid cash dividend of $1,000.
Use the following account descriptions for journal entries.
Chart of Accounts
Account Type
Assets
Account
Number
Account Title
Normal Balance
111
117
119
144
145
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accum Dep -Repair Equipment
Debit
Debit
Debit
Debit
Credit
212
213
Accounts Payable
Income Tax Payable
Credit
Credit
311
312
313
Common Stock
Retained Earnings
Dividends
Credit
Credit
Debit
411
Bicycle Repair Revenue
Credit
511
512
513
514
515
516
517
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Expense
Dep Expense – Repair Equipment
Income Tax Expense
Electric Expense
Debit
Debit
Debit
Debit
Debit
Debit
Debit
Liabilities
Stockholders Equity
Revenue
Expenses
Review Chapter 2,
p. 90 for more
information on the
Chart of Accounts
Anything in yellow needs to be manually inputted
Must be Manually Updated From “March Transactions” Data
Event
Cash
Shares
Share Price
Total Stock Value
Insurance
Month’s Rent
Repair Equipment
Paid Down on Equipment
Equipment Balance
Repair Supplies on Credit
Telephone Bill March
Revenue 3/1-3/10
Paid Gary Company
Revenue 3/10-3/20
Revenue 3/20-3/31
Electic Bill
Declared and paid Dividend
Entry Monthly Exp
22500
2250
10
22500
2160
180
1800
5800
2200
3600
300
650
400
2000
400
2450
1500
300
1000
Must be Manually Updated From “Adjusting Entries” Data
Monthly Insurance Exp
Inventory Repair Supplies
Repair Equip Depreciation
Income Tax
180
200 450
150
100
Automatically Updated From “March Transactions” Data
Total Revenue
Total Monthly Expense
Accounts Payable
5950
3380
3850
Journal Entries
REQUIREMENT #1: Prepare journal entries to record the March transactions in the General Journal
below. Remember that Debits must equal Credits—All of your Journal Entries should balance.
Date
Account
Number from
Chart of
Accounts tab
General Journal
Account Title from Chart of Accounts tab
Debit
Credit
1-Mar
111
Cash
22,500
1-Mar
311
Common Stock
22,500
Investing cash of $22,500 in exchange for 2,250 shares of $10 par value common stock.
1-Mar
117
Prepaid Insurance
2,160
1-Mar
111
Cash
2,160
Paid the premium on a 1-year insurance policy, $2,160.
1-Mar
511
Store Rent Expense
1,800
1-Mar
111
Cash
1,800
Paid the current month’s rent expense, $1,800.
3-Mar
144
Repair Equipment
5,800
3-Mar
111
Cash
2,200
3-Mar
212
Accounts Payable
3,600
Purchased repair equipment from Fred Company for $5800 with $2200 cash and balance on account
8-Mar
119
Repair Supplies
650
8-Mar
212
Accounts Payable
650
Purchased repair supplies from Gary Company on credit, $650.
10-Mar
512
Telephone Expense
400
10-Mar
111
Cash
400
Paid telephone bill for March, $400.
11-Mar
111
Cash
2,000
11-Mar
411
Bicycle Repair Revenue
2,000
Cash flight management system (FMS) repair revenue for the first third of March, $2000.
18-Mar
212
Accounts Payable
400
18-Mar
111
Cash
400
Made payment to Gary Company, $400.
20-Mar
111
Cash
2,450
20-Mar
411
Bicycle Repair Revenue
2,450
Cash FMS repair revenue for the second third of March, $2,450.
31-Mar
111
Cash
1,500
31-Mar
411
Bicycle Repair Revenue
1,500
Cash FMS repair revenue for the last third of March, $1,500.
31-Mar
517
Electric Expense
300
31-Mar
111
Cash
300
Paid the current month’s electic bill, $300.
31-Mar
313
Dividends
1,000
31-Mar
111
Cash
1,000
Declared and paid cash dividend of $1,000.
Journal Entries
40,960
40,960
Journal Entries
Once you’ve completed this
requirement print your
General Journal to
complete Requirement #2
on the General Ledger
worksheet.
REQUIREMENT #2: Post the March journal entries to the following T-Accounts and compute ending balances.
Date
1-Mar
1-Mar
1-Mar
3-Mar
10-Mar
11-Mar
18-Mar
20-Mar
31-Mar
31-Mar
31-Mar
Trial Balance
Adjusted TB
Post Closing TB
1-Mar
Trial Balance
Adjusting Entry
Adjusted TB
Post Closing TB
8-Mar
Trial Balance
Adjusting Entry
Adjusted TB
Post Closing TB
3-Mar
Trial Balance
Adjusted TB
Post Closing TB
Cash (111)
22,500
2,160
1,800
2,200
400
2,000
400
Date
11-Mar
20-Mar
31-Mar
Trial Balance
Adjusted TB
Closing Entry
Post Closing TB
FMS Repair Revenue (411)
5,950
2,450
1,500
300
1,000
20,190
20,190
20,190
Prepaid Insurance (117)
2,160
2,160
180
1,980
1,980
Repair Supplies (119)
650
650
450
200
200
Repair Equipment (144)
5,800
5,800
5,800
5,800
Accum. Depr.-Repair Equipment (145)
Adjusting Entry
150
Adjusted TB
150
Post Closing TB
150
1-Mar
Trial Balance
Adjusted TB
Closing Entry
Post Closing TB
10-Mar
Trial Balance
Adjusted TB
Closing Entry
Post Closing TB
Adjusting Entry
Adjusted TB
Closing Entry
Post Closing TB
Store Rent Expense (511)
1,800
1,800
1,800
0
Telephone Expense (512)
400
400
400
0
Insurance Expense (513)
180
180
0
Repair Supplies Expense (514
Adjusting Entry
450
Adjusted TB
450
Closing Entry
Post Closing TB
0
Accounts Payable (212)
3-Mar
8-Mar
18-Mar
Trial Balance
Adjusted TB
Post Closing TB
3,600
650
400
3,850
3,850
3,850
Income Taxes Payable (213)
Adjusting Entry
Trial Balance
Adjusted TB
Post Closing TB
100
100
100
100
Common Stock (311)
1-Mar
Trial Balance
Adjusted TB
Post Closing TB
Closing Entry
Closing Entry
Closing Entry
Post Closing TB
31-Mar
Trial Balance
Adjusted TB
Closing Entry
Post Closing TB
Depr. Exp.-Repair Equipment (5
Adjusting Entry
150
Adjusted TB
150
Closing Entry
Post Closing TB
0
22,500
22,500
22,500
22,500
Retained Earnings (312)
1,000
5,950
3,380
1,570
Dividends (313)
1,000
1,000
1,000
1,000
0
Adjusting Entry
Adjusted TB
Closing Entry
Post Closing TB
31-Mar
Trial Balance
Adjusted TB
Closing Entry
Post Closing TB
Income Taxes Expense (516)
100
100
0
Electric Expense (517)
300
300
300
0
ompute ending balances.
S Repair Revenue (411)
2,000
2,450
1,500
5,950
5,950
0
ore Rent Expense (511)
1,800
lephone Expense (512)
400
surance Expense (513)
180
ir Supplies Expense (514)
450
This worksheet will be used to complete
Requirements #2, #5 and #9. Instructions for
#5 can be found on the Adjusting Entries
Worksheet. Instructions for #9 can be found
on the Closing Entries Worksheet.
xp.-Repair Equipment (515)
150
me Taxes Expense (516)
100
lectric Expense (517)
300
Journal Entries
REQUIREMENT #3: Prepare a trial balance for March in the space below.
Account
Number
111
117
119
144
212
311
313
411
511
512
517
Howard’s Flight Radio Management Corporation
Trial Balance
March 31
Account
Title
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accounts Payable
Common Stock
Dividends
Bicycle Repair Revenue
Store Rent Expense
Telephone Expense
Electric Expense
Balance
Debit
Credit
20,190
2,160
650
5,800
3,850
22,500
1,000
5,950
1,800
400
300
32,300
32,300
Journal Entries
Only enter
accounts that
have a balance.
Journal Entries
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 repair supplies is $200.
c) The estimated depreciation on repair equipment is $150.
d) The estimated income taxes are $100.
Requirement #5: Post the adjusting entries on March 31 below to the General Ledger T-accounts and
compute adjusted balances. Just add to the balances that are already listed.
Date
31-Mar
Account
Number from
Chart of
Accounts tab
General Journal
Account Title from Chart of Accounts tab
513
Insurance Expense
117
Prepaid Insurance
One month’s insurance expense charged
31-Mar
514
Repair Supplies Expense
119
Repair Supplies
Expensed out $450 of repair supplies
31-Mar
515
Dep Expense – Repair Equipment
145
Accum Dep -Repair Equipment
Expensed out Depreciation of 1 month for equipment
31-Mar
516
Income Tax Expense
213
Income Tax Payable
Adjusting entry for estimated income tax
Debit
180
450
150
100
880
Journal Entries
ournal below. Show
counts and
Credit
180
450
150
100
880
Journal Entries
REQUIREMENT #6: Prepare an Adjusted Trial Balance in the space below.
Account
Number
111
117
119
144
145
212
213
311
313
411
511
512
513
514
515
516
517
Howard’s Flight Radio Management Corporation
Adjusted Trial Balance
March 31
Account
Title
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accum Dep -Repair Equipment
Accounts Payable
Income Tax Payable
Common Stock
Dividends
Bicycle Repair Revenue
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Expense
Dep Expense – Repair Equipment
Income Tax Expense
Electric Expense
Balance
Debit
Credit
20,190
1,980
200
5,800
150
3,850
100
22,500
1,000
5,950
1,800
400
180
450
150
100
300
32,550
32,550
Journal Entries
Only enter
accounts that
have a balance.
Requirement #7: Prepare the financial statements for Howard’s Flight Radio Management Corporation as
You will only be preparing the Income Statement, Statement of Retained Earning, and the Balance Shee
The Statement of Cash Flows is a required Financial Statement, but is not required for this project.
Howard’s Flight Radio Management Corporation
Income Statement
For the Month Ending March 31
Howard’s Flight Radio Management Corporation
Statement of Retained Earnings
For the Month Ending March 31
Revenues:
FMS Repair Revenue
Total Revenue
Retained Earnings, March 1
Add: Net Income
Subtotal
Less : Dividends
Retained Earnings, March 31
Expenses:
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Exp.
Depreciation Exp.
Income Taxes Expense
Electric Expense
Total Expenses
Net Income
$5,950
5,950
1,800
400
180
450
150
100
300
3,380
2,570
anagement Corporation as of March 31 in the space below.
ning, and the Balance Sheet.
uired for this project.
Management Corporation
Retained Earnings
Ending March 31
$0
2,570
2,570
(1,000)
$1,570
Howard’s Flight Radio Management Corporation
Balance Sheet
March 31
Assets:
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Less: Accum. Depr.
Total Assets
Debit
$20,190
1,980
200
5,800
(150)
$28,020
Liabilities and Stockholders’ Equity
Liabilities:
Accounts Payable
Income Taxes Payable
Total Liabilities
$3,850
100
3,950
Stockholders’ Equity:
Common Stock
Retained Earnings
Total Stockholders’ Equity
22,500
1,570
24,070
Total Liabilities & Stockholders’
Equity
$28,020
Journal Entries
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.
Requirement #9: Post the closing entries to the T-Accounts on the General Ledger worksheet and
compute ending balances. Just add to the adjusted balances already listed.
General Journal
Date
Account
Number from
Chart of
Accounts
tab
31-Mar
411
31-Mar
312
Closing revenue account
31-Mar
7-Nov
31-Mar
511
31-Mar
512
31-Mar
513
31-Mar
514
31-Mar
515
31-Mar
516
31-Mar
517
Closing expenses account
31-Mar
313
31-Mar
312
Close Dividend account
Account Title from Chart of Accounts tab
Debit
Bicycle Repair Revenue
Retained Earnings
5,950
Retained Earnings
3,380
Store Rent Expense
Telephone Expense
Insurance Expense
Repair Supplies Expense
Dep Expense – Repair Equipment
Income Tax Expense
Electric Expense
Dividends
Retained Earnings
1,000
10,330
Journal Entries
Hint: Use the
g entries.
sheet and
Credit
5,950
1,800
400
180
450
150
100
300
1,000
10,330
Journal Entries
Requirement #10: Prepare a post-closing trial balance as of March 31 in the space
below.
Account
Number
111
117
119
144
145
212
213
311
312
Howard’s Flight Radio Management Corporation
Post-Closing Trial Balance
March 31
Account
Title
Cash
Prepaid Insurance
Repair Supplies
Repair Equipment
Accum Dep -Repair Equipment
Accounts Payable
Income Tax Payable
Common Stock
Retained Earnings
Balance
Debit
Credit
20,190
1,980
200
5,800
150
3,850
100
22,500
1,570
28,170
28,170
Requirement #11: Ratios
Using the data from Income Statement and Balance Sheet prepared by you in step 7 compute
Current Ratio
Formula
Current Assets / Current Liabilities
Leverage Ratio
Formula
Average Total Assets / Average Common Stockholders’ Equity
Asset Turnover Ratio
Formula
Net Sales / Average Total Assets
Net Profit Margin Ratios
Formula
Net Income – Preferred Dividends / Net Sales
Rate of Return on Total Assets
Formula
Net Profit Margin Ratio X Assets Turnover Ratio
(Net Income – Preferred Dividends/ Net Sales ) X(Net Sales / Average Total Assets)
Alternatively
Net Income – Preferred Dividends / Average Total Assets
d by you in step 7 compute the following ratios.
Computation
22,370
3,950
=
5.66
Computation
28,020
24,070
=
1.16
Computation
5,950
28,020
=
0.21
Computation
2,570
5,950
=
0.43
Computation
0.43
X
0.21
=
9.17%
Computation
2,570
28,020
=
9.17%
Please enter what each of the ratio results from Spreadsheet 11 mean for the company.
Answer:
The current ratio of 5.66 means that the company has more than 5 times of current assets in
proportion to its current liabilities depicting a strong liquidity position of the company.
The leverage ratio of 1.16 means that the company has $1.16 of assets available in proportion to its
invested equity of $1. It shows that most of the assets are financed by equity and the company has
low leverage and insolvency or debt risk.
The Assets turnover ratio of 0.21 means that the company generated $0.21 of net revenue in March
for each $1 invested in the company’s assets.
The net profit margin ratio of 0.43 means that the company has been able to generate a net profit
of $0.43 from every $1 of revenue generated by the company. The net profit shows the strong
profitability position of the company.
The Return on Assets of 9.17% means that the company has generated a net return of $9.17 for
every $100 invested in the assets of the company.
mpany.
nt assets in
any.
n proportion to its
the company has
revenue in March
erate a net profit
ws the strong
n of $9.17 for
Project 1 Grading Rubric – Students
Criteria
Excellent
Good
Poor
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
Step 1
accounts and
Milestone 1 —Journal Entries
accounts and
and amounts; and
amounts; and
(20 points)
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
Step 1 Grading
Scale
20-18
Steps 2 and 3
Posting is correct
—Posted an
leading to an
Milestone 1 Unadjusted Trial
accurate trial
Balance. (13
balance.
points)
Step 2 & 3
Grading Scale
13-11
17-15
14-12
Posting is mostly
correct leading to
a mostly correct
trial balance.
Posting has several
errors leading to a
trial balance with
several errors.
10-8
7-5
Milestone 1
Step 4
—Adjusting
Milestone 2
Journal Entries
(8 points)
Step 4 Grading
Scale
Steps 5 and 6
—Posted and
Milestone 2 Adjusted Trial
Balance. (10
points)
Step 5 & 6
Grading Scale
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
accounts and
accounts and
and amounts; and
amounts; and
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
8-7
Posting is correct
leading to an
accurate trial
balance.
10-9
6-5
4-3
Posting is mostly
Posting has several
correct leading to errors leading to a
a mostly correct
trial balance with
trial balance.
several errors.
8-7
6-5
Step 7
—Financial
Milestone 2
Statements (15
points)
Step 7 Grading
Scale
All four financial
statements are
prepared
accurately and in
an appropriate
format.
15-13
Three of four
financial
statements are
prepared
accurately and
mostly in an
appropriate
format, one
statement has
some errors.
12-10
Two of four
financial
statements are
prepared
accurately and
mostly in an
appropriate format,
two statements
have some errors.
9-7
Milestone 2
Step 8
—Closing
Milestone 3
Journal Entries
(7 points)
Step 8 Grading
Scale
Journal entries
Journal entries
Journal entries use
mostly use
have some errors in
accurate
accurate
use of accounts
accounts and
accounts and
and amounts; and
amounts; and
amounts; and
debits and credits
debits and credits
debits and credits are only somewhat
are used correctly.
are used correctly. used correctly.
7-6
Steps 9 and 10
Posting is correct
—Posted a Postleading to an
Milestone 3 closingTrial
accurate trial
Balance. (10
balance.
points)
Step 9 & 10
Grading Scale
10-9
5-4
3-2
Posting is mostly
Posting has several
correct leading to errors leading to a
a mostly correct
trial balance with
trial balance.
several errors.
8-7
6-5
Ratios are calculated Ratios are calculated Ratios calculations
correctly. Math
mostly correctly.
have some errors.
process
is
present.
Math
process
is
Math process is
Steps 11 and 12
Interpretation of
present.
present.
—Ratios and
Milestone 3
ratios
are
accurate.
Interpretation
of
Interpretation of
Interpretation.
ratios are mostly
ratios is flawed.
(17 points)
accurate.
Step 11 & 12
Grading Scale
Milestone 3
17-15
14-12
11-9
Very Poor
Unacceptable
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
11-9
8-0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-2
1-0
Points
Availabl
e
20
13
33
Total
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
2-1
0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-3
2-0
8
10
One or fewer of
four financial
statements are
The submission does
prepared
not meet this
accurately and
requirement. Littlemostly in an
to-no work was
appropriate format,
completed.
three or all
statements have
some errors.
6-4
3-0
15
33
Total
Journal entries
have some errors in
use of accounts
and amounts; and
debits and credits
are not used
correctly.
The submission does
not meet this
requirement. Littleto-no work was
completed.
1
0
Posting is done
poorly or not at all,
leading to
inaccurate or no
trial balance.
The submission does
not meet this
requirement. Littleto-no work was
completed.
4-3
2-0
Ratios calculations
have various errors.
Math process is
present.
Interpretation of
ratios is severely
flawed.
The submission does
not meet this
requirement. Littleto-no work was
completed. No
math process is
present.
8-6
5-0
7
10
17
Total
34
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