Captain Bob’s Favorite Fishing Hole Simulation Project
Bob Night opened “Captain Bob’s Favorite Fishing Hole.” The fishing camp is open from April through September and attracts many famous college basketball coaches during the off-season. Guests typically register for one week, arriving on Sunday afternoon and returning home the following Saturday afternoon. The registration fee includes room and board, the use of fishing boats, and professional instruction in fishing techniques. In addition, a small camp store is operated for sales of bait, tackle and t-shirts. All customers at the camp store are charged 6% sales tax. Registration fees are exempt from sales tax. Employees are taxed at the following rates. The SUTA tax rate is 5.4%, the FUTA tax rate is 0.6%, both on the first $7,000 of earnings. The Social Security Tax rate is 6.2% on the first $110,100 of earnings. The Medicare rate is 1.45% of gross earnings. The chart of accounts for the camping operations is provided below.
THE FOLLOWING TRANSACTIONS TOOK PLACE DURING THE MONTH OF APRIL.
Apr. 1 Night invested additional cash in business, $75,000.
1 Paid insurance premium to Allstate Insurance for six-month camping season, $12000.
1 Established a petty cash fund for the office manager, $100.
2 Paid rent to Universal Properties for the month of April, $40,000.
2 Deposited registration fees, $35,000.
2 Purchased 10 fishing boats on account from Fred’s Flat Bottom Boat Co. for $60,000. The boats have estimated useful lives of five years, at which time they will be donated to a local day camp. Arrangements were made to pay for the boats in July.
3 Bought food supplies from Acme Super Market on account, $12,079.
4 Purchased merchandise for camp store from Buffalo Bill’s Emporium Ltd. on account, $1500, terms 2/10, n/30.
5 Bought office supplies from Gordon Office Supplies on account, $500.
7 Deposited registration fees, $38,600.
8 Returned defective merchandise received on 4th to Buffalo Bill’s Emporium Ltd. for credit on account, $100.
8 Earned registration fees on account from a hunting trip tour guide company, Big Game, Inc., $6000.
12 Paid Buffalo Bill’s Emporium Ltd. balance owed for April 4 purchase less April 8 return less 2% discount.
13 “A guest, Jane Doe, became ill and was unable to stay for the entire week.
A refund check was issued in the amount of $1,000. Jane originally paid her registration fees in cash on the 7th.”
14 Deposited registration fees, $30,500 plus sales from camp store, $1500 plus $90 sales tax.
15 Journalize the payroll entry using the following data taken from the payroll register for April 15th. Regular earnings $9000, Overtime earnings $1000, Deductions: Federal income tax $1250, Social Security tax $620, Medicare tax $145.
15 Journalize the employer’s payroll taxes expense for the above payroll using the following information: Taxable Earnings for All Employees for Social Security Wages was $10,000. Taxable Earnings for All Employees for Unemployment Compensation was $500. (Note: Tax rates are given description paragraph above the Chart of Accounts.)
15 Paid 941 taxes for the 1st Quarter which include Employee Income Tax Payable $1435, Social Security Tax Payable $620 and Medicare Tax Payable $145. (See opening balances given for March 31st.)
16 Received cash on account from Big Game, Inc. , $3000.
17 Earned registration fees on account from a new customer, Happy Trails, Inc., $2500, terms 2/10, n/30.
18 Paid for stamps from the US Postmaster, $150.
18 Night’s office manager returned office supplies to Gordon Office Supply and received a credit on account, $100. (Hint: Credit will be to Office Supplies account.)
20 Paid Florida Dept. of Revenue for March sales tax, $180.
21 Deposited registration fees, $35,600 plus sales from camp store, $500 plus $30 sales tax.
23 Paid for advertising spots on National Sports Talk Radio, $2500.
24 Bought food supplies from Acme Super Market on account, $12,500.
25 Returned food supplies to Acme Super Market and received a credit on account, $350. (Hint: Credit will be to Food Supplies account.)
25 Paid Don Brown to repair damaged fishing boat, $850.
26 Received payment from Happy Trails, Inc. on account for Apr 17th invoice less discount.
27 Issued refund check to customer for merchandise purchased at camp store, $50 plus $3 sales tax.
28 Deposited registration fees, $32,000 plus sales from camp store, $600 plus $36 sales tax.
29 Petty Cash fund records showed the following totals at the end of the month: Repairs $65, Postage $14. Petty cash fund was replenished.
30 Paid Acme Super Market on account, $11,229.
30 Paid utilities bill to Progress Energy, $2,000.
30 Bob Night withdrew cash for personal use, $5,000.
30 Paid FUTA tax for first quarter, $80.
30 Paid SUTA tax from first quarter, $540.
30 Journalize the payroll entry using the following data taken from the payroll register for April 30th. Regular earnings $7500, Overtime earnings $500, Deductions: Federal income tax $1050, Social Security tax $496, Medicare tax $116.
30 Journalize the employer’s payroll taxes expense for the above payroll using the following information: Taxable Earnings for All Employees for Social Security Wages was $8,000. Taxable Earnings for All Employees for Unemployment Compensation was $1,000. (Note: Tax rates are given description paragraph above the Chart of Accounts.)