Accounting Project 1 SeaSide Marina
This project requires you to tie all parts of the accounting process together in a relatively simple manner. It is intended to enhance your understanding of fundamental accounting concepts and illustrate how all parts of an accounting system join together. You are required to complete a set of typical transactions, post the transactions to the General and Subsidiary Ledgers, complete a trial balance, month end adjustments, and an adjusted trial balance. Some students have found it helpful to complete the transactions in the workbook first.
Transactions for SeaSide
1. Discovered error made by Jack Hobie. One¬third ($270.00) of the supplies purchased from BeachOffice Supply on June 2 were actually store supplies rather than office supplies.
2. Sold merchandise over the counter to Bill Hankins for $115 cash.
3. Sold $2,000 of merchandise to Sail Board City on account? terms 3/10, n/30? invoice #17.
4. Received a check from Bill Hankins in the amount of $230 to be applied to invoice #8.
5. Received a check from Laker Marine Supply in full payment of the balance of their account. You must determine if a discount was taken, and if so, how much it was. Seaside Marina only grants discounts on the basis of full payment of an invoice within the discount period.
6. Paid Avis Boat Builders the balance due on Seaside’s June 3 merchandise purchase.
7. Sent a check to Catamaran Corp. in full payment of Seaside’s June 19 merchandise purchase.
8. Purchased $1150 of merchandise for resale from Tackle Box Supply on account? terms 2/10, n/30.
9. Purchased $1,400 of merchandise for resale from Nautical Industries on account? terms 2/10, n/30.
10. Seaside needed additional space and purchased a warehouse to remodel and the land around it. Priorto arranging permanent financing, Seaside signed a short term construction note payable. The terms of the note are $50,000, 90 days at 16%. The building value was determined to be $40,000.
11. Seaside’s ad agency offered Mr. Hobie a special deal. If he purchased an additional $150 of advertising to be used in August, Seaside would receive free layout services. Mr. Hobie paid the agency$150 to be recorded as advertising expense.
June 29 (Tuesday)
1. Sold $400 of merchandise to Bass¬A¬Rama Rentals and $114 of merchandise to Carl Jenkins. Both customers paid cash.
2. Sold $2000 of merchandise to Waterfront Marina on account? terms 3/10, n/30? invoice #18.
3. Received a check from Bass¬A¬Rama Rentals in full payment of invoice #16.
4. Received a check from Waterfront Marina in full payment of invoices #14 and #15. You must determine the amount of discount allowed, if any.
5. Certain unusable store equipment costing $1,030 was returned by Mr. Hobie and a credit was received from Office Equipment Company. The remaining balance due on the store equipment was paid in full.
6. Purchased $280 of merchandise for resale from Catamaran Corp. on account? terms n/30.
7. Purchased $365 of merchandise for resale from Danforth Tool on account? terms 2/10,n/30.
8. Purchased $1200 of merchandise for resale from Tackle Box Supply on account? terms 2/10, n/30.
9. Sail Board City returned $840 of merchandise purchased on June 17 and requested that their account be credited.
10. Requested & Returned $205 of merchandise purchased from Nautical Industries and was given a credit on the account.
11. Marlinspike Marine signed a 12%, 60¬ day note dated June 20 to pay the balance of its account. The note has not been recorded yet. Sale date was June 19.
12. Mr. Hobie leased some extra space in the new warehouse to Wayward Fishers. Seaside collected $500 for July and August rent. Use the Rent Revenue account.
June 30 (Wednesday)
1. Purchased store supplies costing $810 from Local Supply. Paid cash.
2. Paid Beach Office Supply the balance due on Seaside’s account.
3. Sent a check for $430 to Local Supply to be applied to Seaside’s June 2 purchase.
4. Paid Nautical Industries the balance due on Seaside’s June 28 purchase. You must determine the discount to be taken, if any. Seaside’s creditors only grant discounts on the basis of full payment of a purchase within the discount period.
5. Sent a check for $1195 to Tackle Box Supply to be applied to Seaside’s account.
6. Seaside Marina was informed that the store equipment returned to Office Equipment Company had actually cost Seaside Marina $930 rather than $1,030. Office Equipment Company requested that Mr. Hobie remit a check for $100. Mr. Hobie sent the check.
7. Sold $200 of merchandise to Carl Jenkins on account? terms n/30? invoice #19.
8. Sold $2230 of merchandise to Pope’s Charters on account? terms 2/10, n/30? invoice #20.
9. Sold merchandise to Sail Board City for $890 cash.
10. Paid freight of $215 on incoming purchases. These purchases were all FOB shipping point.
11. Paid $360 for June utilities.
12. Received payment for the balance due from Sail Board City, less discount.
13. The board of directors declared a $1100 dividend to be paid on July 2.
Summarize and post the appropriate columns of the special journals and prepare the trial balance section of the worksheet to prove that the general ledger is in balance. Next, prepare the subsidiary ledger schedules to verify that the subsidiary ledgers balance with their control accounts. Then, journalize and post the adjusting entries using the following information and the journals and ledgers.
Assume 360 days for any interest calculations and follow the traditional rules for rounding. For example,$5.415 rounds to $5.42 and $5.414 rounds to $5.41.
1. Physical inventories as of June 30, 20XX are as follows:
Office Supplies $150
Store Supplies $560
2. Depreciation is based on the end ¬of ¬month balance in the asset account, regardless of the date purchased. Seaside elects to use the straight-¬line method for calculating depreciation. Based on the balances in the following depreciable asset accounts, using the salvage value and useful life given, calculate the depreciation for each asset for the month of June.
Depreciable Asset Salvage Value Useful Life
Office Equipment $288 96 months
Store Equipment $260 120 months
Warehouse $5200 240 months
3. Seaside must accrue salaries of $240 for the last three days of June. Employee income taxes are withheld at a rate of 15% and FICA taxes are withheld at a rate of 10%. The policy regarding the employer’s matching 10% FICA liability is to accrue the amount for the full month’s payroll at the end of the month.
4. Unused advertising amounts to $350.
Prepare the adjusted trial balance section of the worksheet to verify that the general ledger is still in balance. Then, journalize and post the closing entries using the following information, the worksheet and the general ledger.
1. The ending merchandise inventory as of June 30, 20XX is $4,994. Seaside uses a periodic inventory system and uses the closing entry format for handling cost of goods sold? therefore, it does not have a Cost of Goods Sold account.
Prepare a post¬ closing trial balance to prove that the general ledger is still in balance and prepare the financial statements.
June 28 (Monday)
2. Sold $2,000 of merchandise to Sail Board City on account? terms 3/10, n/30? invoice #17. Sail Board City’s address is:
116 Nautical Road
Travis Wharf, VA 23421
ATTN: Archie Bradford
Purchase order number is 0061, dated June 26 and signed by L. Sanford. Shipment date is June 28, shipped by Yellow Freight Bill of Lading No. 007. The product ordered was 200 units of item 7960 oarlocks at $10 each for a price of $2,000. Customer account number is 006.
Assume the role of Jack Hobie. Go to Figure 1.2¬ Seaside Marina Boat Equipment Sales flow chart. Complete the Sales Invoice (Figure 2.1) and print. Also, if you have not already done this, enter the transaction in the Sales Journal and Accounts Receivable subsidiary ledger.
June 28 (Monday)
9. Purchased $1,400 of merchandise for resale from Nautical Industries on account? terms 2/10, n/30. The purchase order number is 0106, the purchase order date is June 28, 20XX. Nautical Industries address is:
206 Water Street
West Point, VA 23106
The phone # is 804¬769¬7111, fax is 804¬769¬7119, contact name is Brad Smith. The part # is 176437,the item is personal floatation device (PFD). The quantity is 280 and the unit price is $5. Ignore taxes for purposes of this exercise and assume shipping is free for orders above $1000.
Assume the role of Jess Nathan. Go to figure 1.6¬ Seaside Marina Purchase Orders flow chart. Completethe Purchase Order (Figure 2.2) and print. Also, if you have not already done this enter the transaction inthe Purchases Journal and Accounts Payable Subsidiary Ledger.
10. The Baytown Bank loaned the money to Seaside Marina. The note shown is a generic note and isFigure 2.7¬ Promissory Note. You do not have to do anything other than observe the format of the noteand make the appropriate entry if you have not done so already.
June 29 (Tuesday)
10. Sail Board City returned $840 of merchandise purchased on June 17 and requested that their account be credited. The invoice date is June 17, the invoice number is 10, the return number is 43, and the credit number is 006. The product is 10 gallons of metallic paint at $84/gallon.
Assume the role of Jess Nathan. Go to figure 1.4, Seaside Marina Sales Returns flow chart. Complete the Credit Memo (Figure 2.3) and print. Also, if you have not already done this, enter the transaction in the General Journal and Accounts Receivable Subsidiary Ledger.
11. Requested and returned $205 of merchandise purchased from Nautical Industries and was given a credit on the account.
The return request number is 003, the date of the request is June 29, 20XX. The reason is damaged goods. Seaside requested and received a credit on their account, account number 1611. Seaside’s phone number is 1¬800¬342¬6000. The dept. is 11. The invoice number is 7436. There were 41 units returned from an original order of 280 units. The product number is 176437¬ the list price is $10. It was authorized by Ely Jones of Nautical Industries on the date it was received (June 29).
Assume the role of Anne Bolin. Go to Figure 1.7 Seaside Marina Purchase Returns. Complete the Request to Return (Figure 2.6) and print. Also, if you have not already done so, enter the transaction in the General Journal and Accounts Payable Subsidiary Ledger.
June 30 (Wednesday)
7. Sold $200 of merchandise to Carl Jenkins on account? terms n/30? invoice #19 Carl Jenkins address is:
619 Bay Street
Oshkosh, WI 54901
The shipment is by Yellow Freight. The document number is 0179, the shipper number is 116 and the carrier number is 1016. The merchandise is 10 paddles at $20 each. The weight is 20lbs and the rate is$1.00/lb. The freight charges are billed to shipper. Eliot Wire represented Yellow Freight.
Assume the role of Jess Nathan. Go to Figure 1.8¬ Seaside Marina’s shipping to customers. Complete the Uniform Bill of Lading¬ Domestic (Figure 2.4) and print. Also, if you have not already done so, enter the transaction in the sales journal and Accounts Receivable Subsidiary Ledger.
Additional information needed by those students that wish to pursue bank reconciliation and payroll.
Transaction Set 0
June 25¬ Paid employees
Jess Nathan worked 44.59 hours¬ DD voucher #5004
Ron Holt worked 31.01 hours¬ DD voucher #5005
Anne Bolin worked 37.04 hours¬ DD voucher #5006
1. Complete the employee record for each employee and print.
2. Complete the payroll register and print.
3. Complete the Direct Deposit voucher for each employee and print.