ACCT 253 Introductory Financial Accounting – CASE STUDIES PART 1-7 Athabasca University

ACCT 253 Introductory FinancialAccounting – CASE STUDIES PART 1-7 Athabasca University Part 1
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HackSoft Corp. is a small computer consulting business. The company is organized as a corporation and provides consulting services, computer system
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installations, and customprogramdevelopment. HackSoft Corp. showed the following alphabetized post-closing trial balance at February 28, 2014.
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Account Balance
Accounts payable 29,000
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Accounts receivable 82,500
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Accumulated depreciation, building 4,500 q 2 q 2




Building 43,500
Cash __________________________________ 164,000
Retained earnings ________________________ 176,000
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Sharecapital _____________________________ 80,500
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Note:

Therewere13,000 sharesissued and outstandingon February28,2014. Depreciation on
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the building is $700 per month.
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HackSoft Corp.'s salaries expense is a total of$800 per day for each work day (Monday-Friday) in the month (for simplicity, please ignore all statutory
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holidays).
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The following source documents are from March :
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Deposit slip (March 1) q2 q2 q2 Receipt 7909 q2 Invoice 6247 q2 Inter-OfficeMemo3 2
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PurchaseOrder 6582 q2 q2 Receipt from Carrie'sDiner q2 q2 q2 Invoice 6248 q2 Inter-OfficeMemo4 2
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Inter-OfficeMemo1 2
q q2 Invoice 6246 q2 Inter-OfficeMemo2 2
q q2 Customer Statement for Sundown Co q2 q2 q2 q2




Receipt 7904 q2 Receipt 7910 q2 Receipt 7912 q2 Inter-OfficeMemo5 2
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Invoice 7437 q2 Receipt 7911 q2 OnPaceAdvertisingBill 2
q q2 Inter-OfficeMemo6 2
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a) Analyze each of the preceding source documents and prepare journal entries using this information only. Note that some source documents may not require
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an entry. Also, all bills are recorded in the journal on the day they are received. Enter an appropriate description when entering the transactions in the journal.
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Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).
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General Journal q2 Page GJ1 q2 General Journal q2 Page GJ2 q2




Date Account/Explanation F Debit Credit Date Account/Explanation F Debit Credit
1/Mar Cash q2 30,000 4/Mar Food and Drinks Expense q2 q2 q2 63
Share Capital q2 q2 q 2 30,000 Cash q2 q2 63
sharesissued q2 Client dinner q2




2/Mar Computers q 2 16,800 7/Mar Accounts Receivable q2 q 2 13,344
Accounts Payable q2 q2 q 2 16,800 Consulting Revenue Earned q2 q2 q2 13,344
computer cost q2 consultationservices q2




1/Mar Prepaid Insurance q2 q 2 2,400 7/Mar Cash q2 348
Cash q2 q2 2,400 Consulting Revenue Earned q2 q2 q2 348
prepaidinsuramce q2 consultationservices q2




1/Mar Repair Expense q2 q 2 100 9/Mar Cash q2 278
Cash q2 q2 100 Consulting Revenue Earned q2 q2 q2 278
repair consultationservices q2




2/Mar Cash q2 11,200 10/Mar Accounts Receivable q2 q 2 11,136
Unearned Consulting Revenue q2 q2 q2 11,200 Consulting Revenue Earned q2 q2 q2 11,136
for unerned consulting revenue q2 q2 q2 consultationservices q2




General Journal Page GJ3 q2 q2 General Journal q2 Page GJ4 q2




Date Account/Explanation F Debit Credit Date Account/Explanation F Debit Credit
11/Mar Accounts Receivable 18,904 q2 q 2 31/Mar Dividends q2 5,280
Consulting Revenue Earned 18,904q2 q2 q2 Cash q2 q2 5,280
consultationservices q2
disbursment of shares q2 q2




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q 2

, AccountsPayable q2 700
advertising q2




25/Mar Salaries Expense q 2 q2 q 2 13,600
Cash q2 q 2 13,600
salaries
27/Mar Accounts Payable q 2 q2 q 2 16,800
Cash q2 q 2 16,800
computer bill q2




31/Mar Accounts Payable q 2 q2 q 2 700
Cash q2 q 2 700
advertisement bill q2




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Note that any incorrect entries are highlighted red, but there may also be some entries missing.
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b) What is the next step in theaccounting cycle?
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Post transactionsq 2 q2




Prepare an unadjusted trial balance
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Prepare adjusting entries
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This is the last step
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Prepare closing entries
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Prepare an adjusted trial balance
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Prepare financial statements
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Prepare a post-closing trial balance
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Total marks forthis question: 65
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Overall Mark: 65/70 q2 q2




Your markof 65/70hasbeenrecorded.
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Youcan now move on to the next step, or youcan tryagain to improve your gradeon this step.
2
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DONE

, Part 2 [20 points]
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HackSoft Corp.'s March journal entries have been posted to the general ledger for youas shown below. This is similar tohow an
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accounting software package posts automatically.
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Cash AccountNo.101 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 164,000
1/Mar Issuedshares 2
q GJ1 30,000 194,000
1/Mar Prepaidfor insurance 2
q q2 GJ1 2,400 191,600
1/Mar Paidfor repairs tobuilding
2
q q2 q2 q2 2
q GJ1 100 191,500
2/Mar Receivedpaymentforconsultinginadvance
2
q 2
q 2
q 2
q 2
q GJ1 11,200 202,700
4/Mar Paidfor dinner withclient
2
q q2 q2 q2 2
q GJ2 63 202,637
7/Mar Earnedandreceivedconsulting revenue
2
q 2
q q2 q2 q2 GJ2 348 202,985
9/Mar Earnedandreceivedconsulting revenue
2
q 2
q q2 q2 q2 GJ2 278 203,263
23/Mar Received customer payment q2 q 2 GJ3 13,344 216,607
25/Mar Paidcashfor salaries
q2 q2 q2 2
q GJ3 13,600 203,007
27/Mar Paidinvoicefor computers
q2 q2 q2 GJ3 16,800 186,207
31/Mar Paidbill for advertisingexpense
q2 q2 q2 q2 GJ4 700 185,507
31/Mar Dividends 2
q GJ4 5,280 180,227

AccountsReceivable 2
q AccountNo.106 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 82,500
7/Mar Earned consulting revenue
q2 q2 GJ2 13,344 95,844
10/Mar Earned consulting revenue
q2 q2 GJ2 11,136 106,980
11/Mar Earned consulting revenue
q2 q2 GJ3 18,904 125,884
23/Mar Received customer payment q2 q 2 GJ3 13,344 112,540

Prepaid Insurance q2 AccountNo.128 q2 q2




Date Explanation F Debit Credit Balance
1/Mar Prepaidfor insurance 2
q q2 GJ1 2,400 2,400

Computers AccountNo.151 q2 q2




Date Explanation F Debit Credit Balance
2/Mar Received computers q2 GJ1 16,800 16,800

Building AccountNo.173 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 43,500

Accumulated Depreciation, Building q2 q 2 AccountNo.174 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 4,500

AccountsPayable 2
q AccountNo.201 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 29,000
2/Mar Received computers q2 GJ1 16,800 45,800
25/Mar Receivedbillforadvertisingexpense 2
q 2
q 2
q 2
q GJ3 700 46,500
27/Mar Paidinvoicefor computers
q2 q2 q2 GJ3 16,800 29,700
31/Mar Paidbill for advertisingexpense
q2 q2 q2 q2 GJ4 700 29,000

Unearned Consulting Revenue q2 q2 AccountNo.230 q2 q2




Date Explanation F Debit Credit Balance
2/Mar Receivedpaymentforconsultinginadvance
2
q 2
q 2
q 2
q 2
q GJ1 11,200 11,200

ShareCapital 2
q AccountNo.301 q2 q2




Date Explanation F Debit Credit Balance
28/Feb Opening balance q2 80,500
1/Mar Issuedshares 2
q GJ1 30,000 110,500

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AccountNo.302 2
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