There are 10 sheets in the Workbook, including this one.
All of the information that you need for the project is located in this Workbook.
Requirements
Requirement 1—Prepare the Journal Entries in the General Journal
Requirement 2—Post Journal Entries to the General Ledger
Requirement 3—Prepare a Trial Balance
Requirement 4—Prepare the Adjusting Entries
Requirement 5—Post Adjusting Entries to the General Ledger
Requirement 6—Prepare an Adjusted Trial Balance
Requirement 7—Prepare the Financial Statements
Requirement 8—Prepare the Closing Entries
Requirement 9—Post Closing Entries to the General Ledger
Requirement 10—Prepare the Post Closing Trial Balance Sheet in Workbook
Journal Entries
General Ledger
Trial Balance
Adjusting Entries
General Ledger
Adjusted Trial Balance
Financial Statements
Closing Entries
General Ledger
Post-Closing Trial Balance Hint for success: Review the Week 2 Lesson 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 hint.
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 July 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. Requirement #1:
During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing, completed the
following transactions. Prepare journal entries to record the July transactions in the General Journal below. General Journal Column2 Column1 Date July 1
Began business by making a deposit in a company bank account of
$90,000, in exchange
for 9,000 shares of $10 par value common stock. Column4 Column5 Debit Column6 Credit July 1
Cash (debit)
Common stock
Issued common stock. July 3
Paid the current month’s rent, $5,500.
July 5 Column3 Description(Account Name) 90,000
90,000 3-Jul
Paid the premium on a 1-year insurance policy, $4,800 July 7
Purchased supplies on account from Little Company, $900.
July 10 Rent expense (debit)
Cash
Paid current month’s rent. 5,500 Prepaid insurance (debit)
Cash
Paid insurance for one year. 4,800 5,500 5-Jul
Paid employee salaries, $3,300 July 14
Purchased equipment from Lake Company, $11,500. Paid $1,500 down
and the balance was
placed on account. Payments will be $500.00 per month for 20 months.
The first payment is due 8/1. 7-Jul Note: Use accounts payable for the balance due. Supplies expense (debit)
Accounts payable
Purchased supplies on account. July 15
Received cash for plumbing revenue for the first half of July, $7,700
July 19 4,800 900
900 10-Jul
Made payment on account to Lake Company, $500. Salaries expense (debit)
Cash
Paid salary expense July 31
Received cash for plumbing revenue for the last half of July, $8,505
July 31 3,300
3,300 14-Jul
Declared and paid cash dividends of $600 Equipment (debit)
Cash
Accounts payable (credit) Expenses 11,500
1,500
10,000 Purchased equipment with cash and on account.
Rent Expense (Debit)
Salaries Expense (Debit)
Insurance Expense (Debit)
Supplies Expense (Debit)
Depreciation Expense (Debit)
Income Tax Expense (Debit) 14-Jul
Depreciation expense
Accumulated depreciation 192
192 15-Jul
Cash (debit)
Service revenue 7,700
7,700 Received cash for plumbing services
19-Jul
Accounts payable
Cash
Paid cash on account. 500
500 31-Jul
Cash (debit)
Service revenue
Performed services for cash. 8,505
8,505 31-Jul
Dividends
Cash 600
600
133,497 Note: Remember that debits must equal credits—All of your journal entries should balance. 133,497 This Sheet will be used for Requirements 2, 5, and 9.
Requirement #2:
Post the July journal entries to the following T-accounts and compute ending balances. 1-Jul $
15-Jul $
31-Jul $ Balance $ 5-Jul $ Balance Balance Cash (111)
90,000.00
7,700.00
8,505.00 3-Jul
5-Jul
5-Jul
10-Jul
14-Jul
19-Jul
31-Jul $
$
$
$
$
$
$ 5,500.00
4,800.00
4,800.00
3,300.00
1,500.00
500.00
600.00 15-Jul
31-Jul Balance 85,205.00 Prepaid Insurance (117)
4,800.00 $ 4,800.00 $ Supplies (119)
900 $ Revenue (411) Rent Expense (511)
3-Jul Balance 10-Jul 900
Balance 14-Jul $ Balance $ Equipment (144)
11,500 11,500 Balance Accumulated Depreciation-Equipment (145)
14-Jul $ Balance 19-Jul $ Accounts Payable (212)
500 Balace Supplies Expense (514)
192 $ 192 7-Jul $
14-Jul $ 900
10,000 $ 10,400 7-Jul Balance 14-Jul Balance Income Tax Payable (213) Common Stock (311) 31-Jul $ $ 1-Jul $ 90,000 $ 90,000 15-Jul $
31-Jul $ 7,700
8,505 $ 16,205 Dividends (313
600 600 Service Revenue Balance $
$ Revenue (411)
7,700.00
8,505.00 $ 16,205.00 Rent Expense (511)
$
5,500 $ $ $ $ $ 5,500
Salaries Expense (512)
3,300 3,300
Insurance Expense (513)
4,800 4,800 Supplies Expense (514)
$
900 $ 900 $ Depreciation Expense (515)
192 $ 192 Income Tax Expense (516) Retained Earnings (312) Requirement #3:
Prepare a trial balance for July in the space below.
Melvin Plumbing Corporation
Trial Balance
July 31 Balance
Account Title
Cash
Accounts Receivable
Prepaid Expenses Accounts Payable
Common Stock
Dividends
Service Revenue
Salary Expense
Rent Expense Debit Credit $ 85,205 $ 19,300 $
$ 10,400
90,000 $ 16,205 $
$ 3,300
5,500 $ 113,905 $ 116,605 $ 600 This Sheet will be used for Requirements 2, 5, and 9.
Requirement #2: Post the July journal entries to the following T-accounts and compute ending balances. Cash (111)
1-Jul $
15-Jul $
31-Jul $ Balance $
$
$ 5-Jul $ Balance Balance 90,000.00
7,700.00
8,505.00 106,205.00
21,000.00
85,205.00 Revenue (411)
3-Jul
5-Jul
5-Jul
10-Jul
14-Jul
19-Jul
31-Jul $
$
$
$
$
$
$ Prepaid Insurance (117)
4,800.00 $ 4,800.00 $ Supplies (119)
900 $ 900 5,500.00
4,800.00
4,800.00
3,300.00
1,500.00
500.00
600.00 15-Jul
31-Jul Balance Rent Expense (511)
3-Jul Balance 10-Jul Balance 14-Jul $ Balance $ Equipment (144)
11,500 11,500 Accumulated Depreciation-Equipment (145) Balance Supplies Expense (514) 14-Jul $ Balance 19-Jul $ Accounts Payable (212)
500 192 $ 192 7-Jul $
14-Jul $ 900
10,000 Balace $ 10,400 1-Jul $ 90,000 $ 90,000 15-Jul $
31-Jul $ 7,700
8,505 Income Tax Payable (213) Common Stock (311) 31-Jul $ Dividends (313
600 $ 600 Service Revenue Balance $ 16,205 7-Jul Balance 14-Jul Balance Revenue (411)
$
$ 7,700.00
8,505.00 $ 16,205.00 $ $ $ $ $ $ Rent Expense (511)
5,500 5,500
Salaries Expense (512)
3,300 3,300
Insurance Expense (513)
4,800 4,800 Supplies Expense (514) $ 900 $ 900 $ $ Depreciation Expense (515)
192 192
Income Tax Expense (516) Retained Earnings (312) 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 $375.
c) The estimated depreciation on equipment is $175.
d) The estimated income taxes are $3,200. Date General Journal
Description (Account Name) Debit Credit 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.
Melvin Plumbing Corporation
Adjusted Trial Balance
July 31 0 0 Requirement #7:
Prepare the financial statements for the Melvin Plumbing Corporation as of July 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 case study.
Melvin Plumbing Corporation
Income Statement
For the Month Ending July 31
Revenues:
Revenue
Expenses:
Rent Expense
Salaries Expense
Insurance Expense
Supplies Expense
Depreciation Expense
Income Tax Expense
Total Expenses
Net Income Melvin Plumbing Corporation
Statement of Retained Earnings
For the Month Ending July 31
Retained Earnings, July 1
Add: Net Income
Subtotal
Less: Dividends
Retained Earnings, July 31 31 in the space below.
and the balance sheet.
for this case study.
Melvin Plumbing Corporation
Balance Sheet
July 31
Assets:
Cash
Supplies
Prepaid Insurance
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 Requirement #8:
Prepare the closing entries at July 31 in the General Journal below. Date General Journal
Description (Account Name) Debit Credit Requirement #9:
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 July 31 in the space below. Melvin Plumbing Corporation
Post-Closing Trial Balance
July 31 0 0 Case Study 1 Rubric
Please note that this rubric provides a general guideline, but you can score anywhere between
and the maximum number of points for that step, depending on the accuracy and completenes
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 Minor errors
Errors in
such as
computations that
incorrect
resulted in
account names incorrect amounts
or credits listed to be debited and
prior to debits. credited. 20 points
Step 2
Posting is
correct,
leading to
Posted to
the General accurate
Ledger (10 account
balances.
points) 16 points
Posting is
mostly correct,
but minor
errors are
evident. 10 points
Correct
account
Prepared a names and
Trial Balance balances so
(10 points) to arrive at a
correct trial
balance. 8 points
6 points
Some minor
Errors in
errors such as computations that
incorrect
resulted in
account names incorrect amounts
or incorrect
to be debited and
totals due to
credited.
errors in prior
steps. Step 3 Step 4
Prepared
Adjusting
Journal
Entries (10
points) 10 points
Journal
entries use
accurate
accounts and
amounts; and
debits and
credits are
used
correctly. 10 points 8 points
Journal entries
mostly use
accurate
accounts and
amounts; and
debits and
credits are
used correctly. 8 points
Posting is
mostly correct,
Posted leading to an leading to a
accurate trial mostly correct
and
trial balance.
Prepared an balance.
Unadjusted
Trial Balance
(10 points)
10 points
8 points Steps 5 and Posting is
6
correct, 12 points
Posting has
several errors that
resulted in
incorrect account
balances. 6 points
Journal entries
have some errors
in use of accounts
and amounts; and
debits and credits
are only used
somewhat
correctly. 6 points
Posting has
several errors,
leading to a trial
balance with
several errors. 6 points Step 7
Prepared
Financial
Statements
(20 points) Step 8
Prepared
Closing
Journal
Entries (10
points) All three
Financial
Statements
are prepared
accurately
and in an
appropriate
format. Two of the
One of the three
three financial Financial
Statements are Statements is
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. 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. 10 points 8 points
Posting is
mostly correct,
Posted leading to an leading to a
accurate trial mostly correct
and
balance.
trial balance.
Prepared
Post-Closing
Trial Balance
(10 points) Steps 9 and Posting is
10
correct, 10 points 8 points 12 points
Journal entries
have some errors
in use of accounts
and amounts; and
debits and credits
are only somewhat
used correctly. 6 points
Posting has
several errors,
leading to a trial
balance with
several errors. 6 points ideline, but you can score anywhere between 0
p, depending on the accuracy and completeness
Very Poor
Evidence of an attempt to complete
the journal entries. 8 points
Posting is done poorly, but does show
evidence of an attempt to complete. 4 points
Evidence of an attempt to complete
the trial balance. 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 done poorly or not at all,
leading to inaccurate or no trial
balance. 4 points Points
Awarded One or fewer of four Financial
Statements are prepared accurately
and mostly in an appropriate format.
Three or all statements have some
errors. 8 points
Journal entries have some errors in
use of accounts and amounts; and
debits and credits are not used
correctly. 4 points
Posting is done poorly or not at all,
leading to inaccurate or no trial
balance. 4 points
0 Total Points Earned Out of 100 Points
ScholarMatic: Explanation & Answer
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