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Accounting 1 Problem Solving Assignment

Task: Midterm Makeup Assignment

• This is an assignment to be done individually.
• You must answer all the questions in the proposed problem.
• Submission file format: Word document with all the answers, clearly identifying all steps, results, journals, ledger accounts and including comments when requested.

Submission:

This task assesses the following learning outcomes:

• Understand how to record the adjusting and closing entries in order to be able to close the company’s accounting books.
• Understand how to prepare the company’s financial statements: Balance Sheet, Income Statement and Statement of Retained Earnings.
• Acquire a thorough understanding of the company’s accounting cycle and the importance of all the procedures to be able to determine the company’s final net income and its financial situation in the Balance Sheet Accounting 1 Problem Solving Assignment Help

Love Online is an Internet dating agency.  All members pay in advance to be listed in the database.  Advance payments are credited to an account called Unearned Client Fees.  Adjusting entries are performed on a monthly basis and closings are done on December 31.  An unadjusted trial balance dated December 31, 2021, follows:

	DEBIT	CREDIT
CASH	32.800
ACCOUNTS RECEIVABLE	17.000
PREPAID RENT	4.000
UNEXPIRED INSURANCE	12.000
OFFICE SUPPLIES	2.500
COMPUTER EQUIPMENT	60.000
ACCUMULATED DEPRECIATION: COMPUTER EQUIPMENT Accounting 1 Problem Solving Assignment Help		6.000
ACCOUNTS PAYABLE		10.000
NOTES PAYABLE		30.000
UNEARNED CLIENT FEES		15.000
CAPITAL STOCK		40.000
RETAINED EARNINGS		38.000
DIVIDENDS	3.500
CLIENT FEES EARNED		54.000
SALARIES EXPENSE	21.000
DEPRECIATION EXPENSE COMPUTER EQUIPMENT	5.500
INSURANCE EXPENSE	11.500
RENT EXPENSE	22.000
OFFICE SUPPLIES EXPENSE	3.700
TOTAL	193.000	193.000

 

The following information relates to the Company’s month-end adjustments:

1. Office supplies consumed during the month amounted to $900.
2. On December 1, the company paid $12.000 to renew their insurance policy for a period of 12 months. Adjust the monthly insurance expense.
3. The useful life of the computer equipment was estimated to be 10 years (120 months).
4. Fees recorded as Unearned Client Fees in the amount of $8,000 were earned during the current month of December.  Accounting 1 Problem Solving Assignment Help
   5. On December 1, the company borrowed $30,000 by signing a 9-month, 9% note payable. The entire note, plus 9 months’ interest, is due August 31st, 2022. Record the interest expense for December.
5. On December 1, Love Online had moved into the new facilities and had paid $4.000 for 2 month’s rent in advance.
   7. Client fees already earned during December but not yet billed or recorded amounted to $25,000.
   

Instructions:

1. Prepare adjusting entries based on the information provided. (21 points = 3 points each)
2. Post all adjustments on the ledger accounts (T- accounts) (14 points)
3. Prepare closing entries (25 points)
4. Prepare an Income Statement (15 points)
5. Prepare a Statement of Retained Earnings. (10 points)
6. Prepare a Balance Sheet (15 points)

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