MBA 502A—Financial Accounting Accounting Cycle Project
MBA 502A—Monetary Accounting Accounting Cycle Challenge (KidKare, Inc. 2012S) You have been requested to do the bookkeeping for KidKare Inc. for the previous couple of days of December whereas their common bookkeeper is in poor health. KidKare Inc. started operations on July 1, 2011. It supplies childcare companies Monday via Friday, aside from holidays. Finish of month adjusting entries have been made for July via November. No entries have been made since Friday, December 23rd. KidKare has a December 31st fiscal 12 months finish, however prepares month-to-month interim monetary statements. Laken Henry, supervisor and precept shareholder, supplies you with the next: Trial Steadiness as of December 23, 2011 Ref. # Account Title Debit Credit score 101 Money $ 12,094 110 Accounts Receivable 240 112 Allowance for Uncollectible Accounts $ 122 120 Provides on Hand 1,zero25 135 Pay as you go Insurance coverage 420 145 Different Prepaids 150 150 Workplace Tools three,120 155 Amassed Depreciation—Workplace Tools 325 160 Play Tools 9,200 165 Amassed Depreciation—Play Tools 375 170 Van 25,000 175 Amassed Depreciation—Van 1,600 190 KidKare Trademark 210 201 Accounts Payable 280 240 Revenue Taxes Payable 200 260 Notes Payable, 6% due via 2014 15,687 310 Widespread Inventory, $1 par worth (20,000 shares) 20,000 315 Further Paid-in Capital 10,000 410 Childcare Income 60,600 425 Curiosity Income 61 515 Salaries & Wages Expense 42,500 525 Hire Expense 5,400 530 Utilities Expense 940 532 Insurance coverage Expense 300 535 Provides Expense 5,040 540 Unhealthy Debt Expense 202 550 Depreciation Expense 2,300 560 Miscellaneous Expense 132 570 Curiosity Expense 427 580 Revenue Tax Expense 550 Totals $109,250 $109,250 An examination of the Chart of Accounts revealed the next further accounts: 140 Pay as you go Hire 210 Income Obtained in Advance 215 Utilities Payable 220 Salaries & Wages Payable 235 Curiosity Payable 245 Dividends Payable 250 Different Brief-term Obligations 340 Retained Earnings 380 Dividends 390 Revenue Abstract 430 Miscellaneous Income Data after December 24th: a. On December 26, KidKare acquired $2,400 ($40 per day per baby for 12 youngsters for 5 days) from dad and mom for baby care companies for the week of December 26 - 30. b. On December 27, KidKare ordered 10 folding chairs for $28 every from Seats-Right here Firm to be delivered and paid for on January 2nd. c. On December 28, KidKare paid $270 for the acquisition of meals snacks (provides) for the kids. d. On December 28, KidKare’s Board of Administrators declared a $.05 per share dividend on the 20,000 shares excellent. The dividend will probably be paid on January 11, 2012. e. On December 30, KidKare acquired a $200 examine from the dad and mom of one of many youngsters for care the week of January 2th via sixth. f. On December 30, KidKare paid $900 lease for the constructing for the month of January 2012. g. On December 30, KidKare acquired the electrical energy invoice of $230 for December. The invoice was paid January three, 2012. h. On December 30, Kidcare famous that the dad and mom of two youngsters had not paid the $400 they owed for baby care companies for the week of December 26-30 ($40/day per baby for 5 days). Kidcare billed the dad and mom. i. A bodily depend revealed $300 of provides was left readily available on December 30. j. On January three, KidKare acquired and paid the cellphone invoice of $72 for December. ok. On Monday, January 2, KidKare paid payroll of $1,200 in wages and $500 in wage for the week of December 26 via 30. l. On January four, KidKare acquired its December financial institution assertion from Nationwide Sovereign Financial institution. The $10 month-to-month checking account price had been deducted and the $four of curiosity earned on its financial savings account had been added to KidKare’s accounts. m. The December 23rd steadiness in “Different Prepaids” comprises $150, paid December 1, for water and sewer service for the three months of December 2011, January 2012 and February 2012. n. The van was bought July 1, 2011 for $25,000 by paying $7,000 down in money and signing a three-year, 6%, $18,000 observe. The observe requires month-to-month funds of $548 due by the 2nd of every month which incorporates the curiosity on the excellent steadiness. The funds are made by computerized switch on the first day of the month. The van has a 50,000 mile estimated helpful life and an estimated salvage worth of $5,000. KidKare makes use of the items of exercise methodology of depreciation. The van was pushed 600 miles in December. o. The workplace tools was put into use on July 1, 2011. It has a eight-year estimated helpful life and a $300 estimated salvage worth. Kidcare makes use of the double-declining steadiness methodology to depreciate it. (Spherical depreciation to the closest month.) p. The play tools was bought July 1, 2011. It has a ten-year estimated helpful life and a $200 estimated salvage worth. Kidcare depreciates it utilizing the straight-line methodology. (Spherical depreciation to the closest month.) q. Pay as you go Insurance coverage represents the remaining seven months (December 2011 via June 2012) on a one-year legal responsibility coverage bought July 1, 2011 for $720. r. KidKare estimates uncollectible accounts at .four% (or .004) of complete childcare income. (Trace: Calculate unhealthy debt expense for the whole six months. Then subtract the quantity already acknowledged to calculate the quantity to be added to unhealthy debt expense for December.) s. KidKare is topic to a 30% earnings tax charge on web earnings. t. The December 23rd steadiness in Account Receivable is expounded to the care of two youngsters, who abruptly stopped care in late November and whose dwelling tackle is now not legitimate. Makes an attempt to gather are nonetheless being made. u. The Account Payable quantity is expounded to a provides buy made earlier in December. It's anticipated to be paid in early January. v. For monetary reporting functions $5,792 of the remaining steadiness on the observe is thought-about “present,” the remaining is taken into account “long-term.” Required: Utilizing both the MS Phrase file offered or the MS Excel file offered. (Spherical all last outcomes to the closest greenback quantity.) 1. Make the suitable journal entries for December 24 via 31. Use journal web page G15. (It's possible you'll exclude explanations.) 2. Submit the journal entries to the overall ledger. three. Journalize and publish the adjusting entries. Use journal web page G16. (Present calculations as the reason within the journal.) four. Put together an adjusted trial steadiness as of December 31, 2011. 5. Put together an Revenue Assertion and Retained Earnings Assertion for the six months fiscal interval ending December 31, 2011 and a Steadiness Sheet as of December 31, 2011, in good kind (together with an earnings assertion with working earnings and earnings earlier than taxes subtotals proven and a categorised steadiness sheet). 6. Journalize and publish closing entries for December 31, 2011. Use journal web page G17. 7. Put together a post-closing trial steadiness as of December 31, 2011. eight. Submit your journal, normal ledger, adjusted trial steadiness, monetary statements and post-closing trial steadiness to the Accounting Cycle Challenge dropbox by the due date.