Question

Scenario:

You’ve just secured a new client in your accounting practice, the Rawls Repair Corporation, (RRC) a brand new small business specializing in bicycle repair. The owner, Rob Rawls, is a terrific cyclist and bike repair specialist, but definitely not an accountant. Your job is to help Rob put his affairs in order. Luckily Rob has only been in operation for a month and things have not gotten too out of hand yet! Rob has to submit his financial statements to his investors and doesn’t know where to begin. It’s your job to go through the complete Accounting cycle to prepare the financial statements for the RRC.

Requirements	Task description	Using this
1	Prepare the journal entries in the general journal	Journal entries
2	Post journal entries to the general ledger	General ledger
3	Prepare a trial balance	Trial balance

1. Complete requirements 1-3 on the journal entries. General ledger and trial balance worksheets

2. Put work into worksheets

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs, completed the following transactions:
October Transactions
Date	Transaction Description
Oct. 1	Began business by making a deposit in a company bank account of $12,000, in exchange for 1,200 shares of $10 par value common stock.
Oct. 1	Paid the premium on a one-year insurance policy, $1,200.
Oct. 1	Paid the current month's store rent expense, $1,040.
Oct. 3	Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance was placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1. Note: Use Accounts Payable for the Balance Due.
Oct. 8	Purchased repair supplies from McKenna Company on credit, $390.
Oct. 12	Paid utility bill for October, $154.
Oct. 16	Cash bicycle repair revenue for the first half of October, $1,362.
Oct. 19	Made payment to McKenna Company, $200.
Oct. 31	Cash bicycle repair revenue for the last half of October, $1,310.
Oct. 31	Declared and paid cash dividend of $800.

Account Type	Account Number	Account Title	Normal Balance
Assets
	111	Cash	Debit
	117	Prepaid Insurance	Debit
	119	Repair Supplies	Debit
	144	Repair Equipment	Debit
	145	Accum Dep -Repair Equipment	Credit
Liabilities
	212	Accounts Payable	Credit
	213	Income Tax Payable	Credit
Stockholders Equity
	311	Common Stock	Credit
	312	Retained Earnings	Credit
	313	Dividends	Debit
Revenue
	411	Bicycle Repair Revenue	Credit
Expenses
	511	Store Rent Expense	Debit
	512	Utility Expense	Debit
	513	Insurance Expense	Debit
	514	Repair Supplies Expense	Debit
	515	Dep Expense - Repair Equipment	Debit
	516	Income Tax Expense	Debit

REQUIREMENT #2: Post the October journal entries to the following T-Accounts and compute ending balances.
					Cash (111)		Bicycle Repair Revenue (411)
Prepaid Insurance (117)			Store Rent Expense (511)
Repair Supplies (119)			Utility Expense (512)
Repair Equipment (144)			Insurance Expense (513)
Accum. Depr.-Repair Equipment (145)			Repair Supplies Expense (514)
Accounts Payable (212)			Depr. Exp.-Repair Equipment (515)
Income Taxes Payable (213)			Income Taxes Expense (516)
Common Stock (311)
Retained Earnings (312)
Dividends (313)

Answer 1