Ace Lawn Care Module 1 Mini Practice Problem


Ace Lawn Care Module 1 Mini Practice Problem

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Ace Lawn Care Module 1 Mini Practice Problem

 

Jim Graham started his career mowing lawns for neighbors while he was in junior high school.  Jim worked summers for the local golf course while he was in high school and now that he has graduated, he is starting his own lawn care business.  You are taking an accounting class at the local community college and have agreed to help Jim set up and maintain the accounting records for his new business.  He has set up a checking account in the business name, Ace Lawn Care, at the local bank.  After some discussion with you, Jim has decided to set the business up as a sole proprietorship.  You and Jim established a chart of accounts to be used in recording the business transactions.  In May, 2014, the following activities occur at Ace Lawn Care.

 

May 1             Jim withdraws $15,000 from his savings account and deposits it in the business’ bank account.

 

May 2             Jim purchases a used truck for $5,000 to use for the lawn care business, he writes a check for $2,000 and signs a 1 year, 6% note for the balance.

 

May 5             Jim purchases a lawn mower for $300 and an aerator for $500 and writes a check for the total amount.

 

May 6             Jim writes a $600 check for a six month insurance policy that expires October 31, 2014

 

May 7             Jim establishes a $500 line of credit account with Jones Fuel, a local gas station.

 

May 8             Jim writes a check for $50 for a weekly advertisement in the local newspaper.  The advertisement will run every Friday through the end of May, 2014.

 

May 16           At the end of the first week, Jim has earned $600 for lawn care services.  Of the $600, $500 was paid in cash and $100 was on credit.

 

May 23           At the end of the second week, Jim has earned $1,100 for lawn care services.  Of the $1,100, $700 was paid in cash and $400 was on credit.

 

May 26           Jim writes a check for $50 to have the mower blade sharpened.

 

May 30           At the end of the third week, Jim has earned $1,000 for lawn care services.  Of the $1,000, $800 was paid in cash and $200 was on credit.

 

May 31           Jim receives payments, on account, in the amount of $500

 

May 31           Jim receives his monthly invoice and writes a check for $150 to Jones Fuel.

 

May 31           Jim writes a check to himself for $1,000 for personal expenses.

 

 

 

Instructions:

 

  1. Using the chart of accounts provided below, and the Excel template provided with this assignment, prepare journal entries, in good form, to record the May transactions. Explanations are optional.
  2. Post the journal entries to general ledger accounts.
  3. Prepare a trial balance as of May 31, 2014, for Ace Lawn Care.

 

Ace Lawn Care

Chart of Accounts

Classification Account Number Account Name
ASSETS 101 Cash
  110 Accounts Receivable
  120 Supplies
  130 Prepaid Insurance
  150 Equipment
  155 Accumulated Depreciation – Equipment
LIABILITIES 201 Accounts Payable
  220 Notes Payable
  225 Interest Payable
OWNER’S EQUITY 301 Owner’s Capital
  305 Owner’s Drawing
REVENUES 401 Lawn Service Revenue
EXPENSES 620 Supplies Expense
  630 Fuel Expense
  640 Repair and Maintenance Expense
  650 Advertising Expense
  660 Insurance Expense
  670 Depreciation Expense
  680 Interest Expense

 

To get your Assignment/Homework solutions;

Simply Click ORDER NOW and fill your paper details. Our support team will review the assignment(s) and assign the right expert whose specialization is same to yours to complete it within your deadline. Our Editor(s) will then review the completed paper (to ensure that it is answered accordingly) before we email you a complete paper

 

 

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