. Derrick Epstein has operated a part-time consulting business from his home. As of June 1, 2008, Derrick decided to move to rented quarters and to operate the business, which was to be known as Lumin

STUCK with your assignment? When is it due? Hire our professional essay experts who are available online 24/7 for an essay paper written to a high standard at a reasonable price.


Order a Similar Paper Order a Different Paper

. Derrick Epstein has operated a part-time consulting business from his home. As of June 1, 2008, Derrick decided to move to rented quarters and to operate the business, which was to be known as Luminary Consulting, on a full-time basis. June 1. The following assets were received from Derrick Epstein: cash, $26,200; accounts receivable, $6,000; supplies, $2,800; and office equipment, $25,000. There were no liabilities received.

. Derrick Epstein has operated a part-time consulting business from his home. As of June 1, 2008, Derrick decided to move to rented quarters and to operate the business, which was to be known as Lumin
BST College MBA Program Group Assignment for the Course Financial and Managerial Accounting Last date of Submission April 9, 2022 1. Derrick Epstein has operated a part-time consulting business from his home. As of June 1, 2008, Derrick decided to move to rented quarters and to operate the business, which was to be known as Luminary Consulting, on a full-time basis. June 1. The following assets were received from Derrick Epstein: cash, $26,200; accounts receivable, $6,000; supplies, $2,800; and office equipment, $25,000. There were no liabilities received. 1. Paid three months’ rent on a lease rental contract, $5,250. 2. Paid the premiums on property and casualty insurance policies, $2,100. 4. Received cash from clients as an advance payment for services to be provided and recorded it as unearned fees, $2,700. 5. Purchased additional office equipment on account from Office Station Co., $5,000. 6. Received cash from clients on account, $3,000. 10. Paid cash for a newspaper advertisement, $200. 12. Paid Office Station Co. for part of the debt incurred on June 5, $1,000. 12. Recorded services provided on account for the period June 1–12, $5,100. 14. Paid part-time receptionist for two weeks’ salary, $800. 17. Recorded cash from cash clients for fees earned during the period June 1–16, $3,500. 18. Paid cash for supplies, $750. 20. Recorded services provided on account for the period June 13–20, $1,100. 24. Recorded cash from cash clients for fees earned for the period June 17–24, $4,150. 26. Received cash from clients on account, $4,900. 27. Paid part-time receptionist for two weeks’ salary, $800. 29. Paid telephone bill for June, $150. 30. Paid electricity bill for June, $400. 30. Recorded cash from cash clients for fees earned for the period June 25–30, $1,500. 30. Recorded services provided on account for the remainder of June, $1,000. 30. Derrick withdrew $8,000 for personal use. Instructions 1. Journalize each transaction in a two-column journal, referring to the following chart of accounts 11 Cash 31 Derrick Epstein, Capital 12 Accounts Receivable 32 Derrick Epstein, Drawing 14 Supplies 41 Fees Earned 15 Prepaid Rent 51 Salary Expense 16 Prepaid Insurance 52 Rent Expense 18 Office Equipment 53 Supplies Expense 19 Accumulated Depreciation 54 Depreciation Expense 21 Accounts Payable 55 Insurance Expense 22 Salaries Payable 59 Miscellaneous Expense 23 Unearned Fees Answer 2. at the end of June, the following adjustment a. Insurance expired during June is $175. b. Supplies on hand on June 30 are $2,000. c. Depreciation of office equipment for June is $500. d. Accrued receptionist salary on June 30 is $120. e. Rent expired during June is $1,500. f. Unearned fees on June 30 are $1,875. Prepare: – Complete Accounting Cycle? 2. Howard Jaffe is the founder and manager of Old Town Playhouse. The business wishes to obtain a bank loan to finance the production of its next play. As part of the loan application, Jaffe was asked to prepare a balance sheet for the business. He prepared the following balance sheet, which is arranged correctly but contains several errors with respect to such concepts as the business entity and the valuation of assets, liabilities, and owners’ equity. In discussions with Jaffe and by reviewing the accounting records of Old Town Playhouse, you discover the following facts. 1. The amount of cash, $19,400, includes $16,000 in the company’s bank account, $2,400 on hand in the company’s safe, and $1,000 in Jaffe’s personal savings account. 2. The accounts receivable, listed as $150,200, include $10,000 owed to the business by Dell, Inc. The remaining $140,200 is Jaffe’s estimate of future ticket sales from September 30 through the end of the year (December 31). 3. Jaffe explains to you that the props and costumes were purchased several days ago for $18,000. The business paid $3,000 of this amount in cash and issued a note payable to Ham’s Supply Co. for the remainder of the purchase price ($15,000). As this note is not due until January of next year, it was not included among the company’s liabilities. 4. Old Town Playhouse rents the theater building from Time International. The $26,000 shown in the balance sheet represents the rent paid through September 30 of the current year. Time International acquired the building seven years ago at a cost of $180,000. 5. The lighting equipment was purchased on September 26 at a cost of $10,000, but the stage manager says that it isn’t worth a dime. 6. The automobile is Jaffe’s classic 1935 Ford, which he purchased two years ago for $12,000. He recently saw a similar car advertised for sale at $15,000. He does not use the car in the business, but it has a personalized license plate that reads “OTPLAY.” 7. The accounts payable include business debts of $6,000 and the $1,000 balance of Jaffe’s personal Visa card. 8. Salaries payable include $30,000 offered to Robin Needelman to play the lead role in a new play opening next December and $2,000 still owed to stagehands for work done through September 30. 9. When Jaffe founded Old Town Playhouse several years ago, he invested $20,000 in the business. However, New Theatre, Inc., recently offered to buy his business for $184,600. Therefore, he listed this amount as his equity in the given balance sheet. Instructions Prepare a corrected balance sheet for Old Town Playhouse at September 30, current year. Step 1 of 4 (a) Preparation of corrected balance sheet of O T Playhouse on September 30, 2015: The balance sheet is the statement showing the financial position of the reporting entity on the reporting date. This statement gives the detailed description of the assets owned by the company and the obligation to be met by the company on the reporting date. This statement of financial position would act as a tool for the investors in decision making purpose considering the assets and liabilities of the company. Prepare the corrected balance sheet as at September 30, 2015 as below: O T Playhouse Balance Sheet As at September 30, 2015 Liabilities & Equity Amount ($) Assets Amount ($) Liabilities: Cash 18,400 Notes payable 15,000 Accounts receivable 10,000 Accounts payable 6,000 Props & Costumes 18,000 Salaries payable 2,000 Lighting equipment 10,000 Total liabilities 23,000 Equity: Capital 33,400 56,400 56,400 b. For each of the nine numbered items, explain your reasoning for deciding whether or not to include the items in the balance sheet and in determining the proper dollar valuation. Corrected balance sheet at September 30, 2011: OLD TOWN PLAY HOUSE Balance Sheet September 30, 2011 Assets Amount $ Liabilities & Equity Amount $ Cash 18,400 Liabilities:   Accounts receivable 10,000 Notes payable 15,000 Props and costumes 18,000 Accounts payable 6,000 Lighting equipment 10,000 Salaries payable 2,000 Total liabilities 23,000 Equity:   Howard Jaffe Capital 33,400 Total 56,400 Total 56,400 Note: 3. Unadjusted Trial Balance The debit and credit totals are not equal as a result of the following errors: a. The balance of cash was understated by $3,000. b. A cash receipt of $4,500 was posted as a debit to Cash of $5,400. c. A debit of $1,850 to Accounts Receivable was not posted. d. A return of $350 of defective supplies was erroneously posted as a $530 credit to Supplies. e. An insurance policy acquired at a cost of $175 was posted as a credit to Prepaid Insurance. f. The balance of Notes Payable was understated by $7,500. g. A credit of $900 in Accounts Payable was overlooked when determining the balance of the account. h. A debit of $3,500 for a withdrawal by the owner was posted as a credit to Jose Mendrano, Capital. i. The balance of $7,200 in Advertising Expense was entered as $720 in the trial balance. j. Gas, Electricity, and Water Expense, with a balance of $6,900, was omitted from the trial balance. Instructions 1. Prepare a corrected unadjusted trial balance as of March 31, 2008. 2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain. Q:Question:Larger of Totals (identifying number) (equal or unequal) (amount) (debit or credit) Errors: (1) A withdrawal of $3,000 cash by the owner was recorded by a debit of $3,000 to Salary Expense and a credit of $3,000 to Cash . (2) A $650 purchase of supplies on account was recorded as a debit of $1,650 to Equipment and a credit of $1,650 to Accounts Payable. (3) A purchase of equipment for $3,450 on account was not recorded. (4) An $870 receipt onA:Answer:Error No.            Trial  Total (equal or unequa… Q:Question:purchase of office supplies posted as a $50 debit to Office Equipment and a $50 credit to Cash E. All of these errors will cause the trial balance to be out of balance 4. A receipt of $12,600 cash from a customer as a payment on their account was incorrectly credited to Rent Revenue. What is the effect of this error on the financial statements of the company? A. Assets are understated by $12,600 and owners’ equity is understated by $12,600.A:Answer:1) Answer is E Trial balance not balance due to on… Q:Question:Larger of Totals (identifying number) (equal or unequal) (amount) (debit or credit) Errors: i. A withdrawal of $3,000 cash by the owner was recorded by a debit of $3,000 to Salary Expense and a credit of $3,000 to Cash . ii. A $650 purchase of supplies on account was recorded as a debit of $1,650 to Equipment and a credit of $1,650 to Accounts Payable. iii. A purchase of equipment for $3,450 on account was not recorded. iv. A $870 receipt onA:Answer:Types of Errors in Trial Balance – There are 4 typ… Q:Question:636.000 The debit and credit totals are not equal as a result of the following errors a . The cash entered on the trial balance was overstated by $7.000, b. A cash receipt of 58.200 was posted as a debit to Cash of $2.800. c. A debit of $16.500 to Accounts Receivable was not posted 2 ron 15

Writerbay.net

Everyone needs a little help with academic work from time to time. Hire the best essay writing professionals working for us today!

Get a 15% discount for your first order


Order a Similar Paper Order a Different Paper