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>Introduction

Blocks of

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ing .. A Financial Perspective

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			Building			Account
	Yun	YM		8					0	9	YM8	09
F9					1		18	08

to the same screen that the project was downloaded from:
www.cybertext.com, The Book List, Building Blocks of Accounting .. A Financial Perspective, Enter password, Upload Your Excel

File

.
Keep two copies of your spreadsheet in two separate places in case one does not work.
You may find it easier to work on this project if you print a hard copy of all the pages.

NOTE:
If there are any questions about the project e-mail markfriedman@miami.edu or call 3

. 28 4

6.
Grade will be based upon answers entered into the shaded boxes.

FAQ

Elf Village Productions 50 Sheet Legal Pad Building Blocks of Accounting .. A Financial Perspective
FAQ

Page 1 FAQ

01 My file used to upload, why is it not uploading? Answer: Sometimes we unknowingly add items to a workbook that inhibits the upload process. The conversion to a Excel Binary Workbook (*.xlsb) version generally fixes the problem. If the problem continues simple send your BINARY file as an attachment with your username and password…friedman@cybertext.com Windows Operating System Select

File
Select

Save

As Select

Save As

Type: Select

Excel Binary Workbook (*.xlsb) Select Save
Select

Continue or Yes if prompted or if it indicates that there is limited memory. Upload the binary file at cybertext.com Apple Operating System

Select File
Select Save As

Select

Format:

Select Excel Binary Workbook (*.xlsb)
Select Save
Upload the binary file at cybertext.com
Elf Village Productions 50 Sheet Legal Pad
Building Blocks of Accounting .. A Financial Perspective

FAQ

Page 2 FAQ

When I try to enter information in the

General Journal

why does an error appears indicating that the cell protected?

Answer:

The computer program is designed to save you time. Instead of requiring you to enter the description four times the program automatically copies the description when you enter a new account number. This process requires that the data entry is limited to those cells which contain unique information. The cells that you can enter data into are the yellow filled cells. FAQ

03 In the feedback section, what does it mean when I have points under reverse? Answer:

If you pay a telephone expense of $

.00 Telephone Expense

0
Cash

100
If you debit cash and credit telephone expense you have reversed the whole entry.

Cash 100

Telephone Expense 100
If you debit cash and credit anything else you have reversed part of the entry.

Cash 100

Rent Expense

100

Elf Village Productions 50 Sheet Legal Pad
Building Blocks of Accounting .. A Financial Perspective

FAQ

Page 3 FAQ

04 How does my instructor get my grade? Answer:

Every time you upload your grade is recorded in a table. Your instructor can look at the table whenever they want to, although only the last grade counts. Keep a hard copy of your last upload for documentation. FAQ 05 I have entered all the transactions and have completed the worksheet however I get following message on the financial statements: “You must finish the worksheet before you can complete the ….” Answer:

The worksheet demonstrates that the accounting system is working. If all of your journal entries are in balance then the Unadjusted Trial

Balance

and the Adjusting Entry columns will balance. The Adjusted Trial Balance

columns net the

Unadjusted Trial Balance

and the Adjusting Entry columns. There are four steps to completing the worksheet: 1.

Copy the account balances from the Adjusted Trial Balance into the either the

Income Statement

or the

Balance Sheet

columns, (debits remain debits and credits remain credits).

Calculate the

Net Income

or Net Loss by finding the difference between the revenues and expenses. 3. Calculate the Net Income or Net Loss by finding the difference between the total of the debit balances and the total of the credit balances of the accounts in the Balance Sheet columns of the worksheet. 4. Compare the two Net Incomes. If they are the same the financial statements will be displayed, otherwise there is an error in the completion of the worksheet.

12 34

xlsx
Excel Binary Workbook (.xlsb)

Welcome

of this page.

File

Yun

8096 YM8096

Account

0
01

0 0

0 0
00 Dec 31 0 0

Transaction Date Account Name Description Debit Credit
0

01 Jun 01

Cash

00 Dec 31 0 0
00 Dec 31 0 0

00 Dec 31 0

Transaction Date Account Name Description Debit Credit
0

01 Jun 01

Cash

00 Dec 31 0 0

Transaction Date Account Name Description Debit Credit

,000.

01 Jun 01 1110 Cash Hudson’s investment

00 Dec 31 0 0
00 Dec 31 0 0

Transaction Date Account Name Description Debit Credit
Transaction # 1 Not in Balance by $40,000.
01 Jun 01 1110 Cash Hudson’s investment 40,000.00

00 Dec 31

Hudson’s investment

00 Dec 31 0 0

Transaction Date Account Name Description Debit Credit
0
01 Jun 01 1110 Cash Hudson’s investment 40,000.00

00 Dec 31 3100 Capital Stock Hudson’s investment 40,000.00
00 Dec 31

00 Dec 31

2. Calculate the Net Income or Net Loss by finding the difference between the revenues and expenses.
3. Calculate the Net Income or Net Loss by finding the difference between the total of the debit balances and
the total of the credit balances of the accounts in the Balance Sheet columns of the worksheet.
4. Compare the two Net Incomes. If they are the same the financial statements will be displayed, otherwise
there is an error in the completion of the worksheet.

Building Blocks of Accounting — A Financial Perspective

The instructions start on row

FIRST

LAST

For example,

In the date field enter the date of the transaction. If you do not enter a date value an error message will appear.

Transaction

Date

Name

Description

Debit

Credit

Jun 01

Dec

Dec 31

In the account field enter the account number that corresponds to the account in the chart of accounts.

You can also use the pull down list to find the appropriate account number. If you use a number that

is not on the chart of accounts an error message will appear.

The name of the account will automatically appear in the name column. If it is the wrong

account renter the correct account number.

Enter the description in the description field.

1110

Hudson’s investment

Enter the amount in the debit field.

Transaction # 1 Not in Balance by $

40,00

0.00

Enter the second account number.

3100

Capital Stock

Enter the amount in the credit field.

1. Copy the account balances from the Adjusted Trial Balance into the either the Income Statement or the

Balance Sheet columns, (debits remain debits and credits remain credits).

Note:

Save and make backup copies regularly.

Welcome to the world’s first ePractice case, an individualized, internet generated and graded case study that focuses on the analytically portion of the accounting cycle while automating the repetitive posting cycle.
NOTE: If the program is not working e-mail markfriedman@miami.edu,

5.284.6296.
Step I – The

Chart of Accounts

The chart of accounts includes all of the accounts that you can use to solve your case. You may want to print the chart of accounts and use it as an easy reference guide.
Step II – Journalizing the

Transactions

.
Using your unique transactions record the corresponding general journal entry, rounding to two decimal places.
June 1: Hudson Bloom made a $40,000 cash investment in his business,

Byte of Accounting

.
Press Here To Create The General

Ledger

Step III –

Worksheet

Although not graded, you need to complete the Worksheet. If each of your journal entries are in balance then your Unadjusted Trial Balance, the Adjusting Entry and Adjusted Trial Balance columns will be in balance.
Step IV – Prepare the Financial Statements.
After you have entered all of the transactions and prepared the Worksheet, you are to prepare the Income Statement, Shareholder’s Equity Statement and Balance Sheet using the forms provided.
Step VI – Upload the File.
Whenever you want to have cybertext.com grade your work submit it to them on the bottom of the screen that you downloaded the file.
Grading:
You will be graded on the Journal Entries and the three financial statement. The case will be computer graded, therefore make sure all numbers are in the appropriate cells. The computer will evaluate your transactions when grading your financial statements.
Step V – Prepare the

Closing Entries

.
Based upon the information from your Worksheet or from your Financial Statements, prepare the closing entries.

Chart of Accounts

Name

1110 Cash Debit 1

Debit 2

Credit 4

Debit 8

Debit

Credit

Debit

Credit

Building Debit

Credit

Debit

Credit

3100 Capital Stock Credit

in Excess of Par Value

Credit

Debit

Credit

Rent Expense Debit

Debit

Telephone Expense Debit

Debit

	Number	Normal Balance	Error #	Message
Debit And Credit On Same Line
11	20			Accounts Receivable	Debit Before Credit
11		21			Allowance for Doubtful Accounts	Need An	Account Number
1	13			Prepaid Insurance	Round To Two Decimal Places
1		14			Prepaid Rent		16	Need a Description
1		15			Office Supplies		32	Need a Date
			1211				Office Equip.	64
		1212			Accum. Depr.-Office Equip.	128
				1311					Computer Equip.	25
		1312			Accum. Depr.-Computer Equip.	512
1	41	10	24
		1412			Accum. Depr.-Building
		1510			Land
		2101			Accounts Payable
		2102			Advanced Payment
		2103			Interest Payable
			2105			Salaries Payable
21	06			Income Taxes Payable
		2201			Mortgage Payable
		2202			Notes Payable
			3110					Paid-in Capital
	3200			Retained Earnings
	33			Dividends
3400	Income Summary
		4100		Computer & Consulting Revenue
		5010
		5020			Salary Expense
		5030			Advertising Expense
		5040			Repairs & Maint. Expense
		5050			Oil & Gas Expense
		5080			Supplies Expense
		5090			Interest Expense
		5100			Insurance Expense
			5110			Depreciation Expense
		5120			Bad Debt Expense
	5130			Bank Expense
	5140
	5150	Income Tax Expense

Transactions

Byte of Accounting

,400. The par value of the common stock was $28 per share.

made an investment in Byte of Accounting, Inc., by purchasing

6 shares of its common stock by contributing computer equipment with a fair market value of $13,200 and office equipment with a fair value of $780. The par value of the common stock was $28 per share.

The full price of the computer was $150,000.00. A five-year note was executed by Byte for the balance.

05.

00 from invoice number 98

2 was returned to Discount Computer for credit to be applied against the outstanding balance owed by Byte.

00 each.

,000.00 payment reducing the principal owed on the June 2 purchase of computer equipment from Royce Computers.

,000.00. The balance of the cost is to be allocated to the building. Check # 5005 was used to make the down payment of $10,700.00. A thirty year mortgage with an inital payement due on August 1st, was established for the balance.

4 in the amount of $300.00 from the local newspaper for advertising.

15.

Ignore payroll taxes.

18.

00 was received on billings.

25.

28.

– Round to two decimal places.

00 worth of general office supplies remained on hand as of June 30. This did not include any of the Super RoutePro. There were 5 units of Super RoutePro on hand. We use FIFO to determine the valuation of the supplies.

32.

34.

35.

37.

40.

42.

line. The worksheet contains all of the accounts and their balances which you can then transfer to the appropriate financial statement.]

Closing Entries

Yun Ma 8	26
Description of transaction
01.	June 1: Lauryn made an investment in Byte of Accounting, Inc. by purchasing 5,550 shares of its common stock for $166,500 cash. The par value of the common stock was $28 per share.
02.	June 1: Yun Ma made an investment in Byte of Accounting, Inc., by purchasing 2,560 shares of its common stock paying $32,400 in cash and by contributing computer equipment with a fair market value of $	44
03.	June 1:				Courtney	46
04.	June 2: Check # 5002 was used to make a down payment of $30,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 7	65		42
June 4: Additional office equipment costing $700.00 was purchased on credit from Discount Computer Corporation. The invoice number was 984	32.
06.	June 8: Unsatisfactory office equipment costing $1	40.	43
	07	June 8: Purchased office supplies for $1,600.00 from Staples on account. The invoice number was 61298. Included in the purchase was 10 units of Super RoutePro at a cost of $	15.
08.	June 10: Check # 5003 was used to make a $	23
09.	June 14: Check # 5004 was used to purchase a one-year insurance policy covering its computer equipment for $5,304.00 from Seth’s Insurance. The effective date of the policy was June 16 and the invoice number was 2	38
10.	June 16: Checks in the amount of $8,510.00 were received for services performed for cash customers.
11.	June 16: Byte purchased a building and the land it is on for $107,000.00 to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $		17
12.	June 17: Check # 5006 for$9,600.00 was paid for rent of the office space for June, July, August and September.
13.	June 17: Received invoice number 26	35
14.	June 21: Accounts payable in the amount of $560.00 were paid with Check # 5007.
June 21: Check # 5008 was used to purchase a fax machine for the office from Office Machines Express for $800.00. The invoice number was 975-3	28.
16.	June 21: Billed various miscellaneous local customers $4,400.00 for consulting services performed.
17.	June 22: Check # 5009 was used to pay salaries of $960.00 to equipment operators for the week ending June	18.
June 22: Received a bill for $1,140.00 from Computer Parts and Repair Co. for repairs to the computer equipment. The invoice number was 43254.
		19	June 22: Check # 5010 was used to pay the advertising bill that was received on June 17.
20.	June 23: Purchased office supplies for $800.00 from Staples on account. The invoice number was 65498. Included in the purchase was 10 units of Super RoutePro at a cost of $18.00 each.
21.	June 23: Cash in the amount of $3,5	25.
22.	June 28: Billed $5,910.00 to miscellaneous customers for services performed to June 25.
23.	June 29: Paid the bill received on June 22, from Computer Parts and Repairs Co with Check # 5011.
24.	June 29: Cash in the amount of $5,600.00 was received for billings.
June 29: Check # 5012 was used to pay salaries of $960.00 to equipment operators for the week ending June 25. Ignore payroll taxes.
26.	June 30: Received a bill for the amount of $990.00 from O & G Oil and Gas Co. The invoice number was 78	45		37
	27	June 30: Check # 5013 was used to pay for a cash dividend of $0.21 per share to Lauryn, a shareholder of Byte.
June 30: Check # 5014 was used to pay for a cash dividend of $0.21 per share to Yun Ma a shareholder of Byte.
29.	June 30: Check # 5015 was used to pay for a cash dividend of $0.21 per share to Courtney, a shareholder of Byte.
	Adjusting Entries
30.	The rent payment made on June 17 was for June, July, August and September. Expense the amount associated with one month’s rent.
31.	A physical inventory showed that only $3	35.
The annual interest rate on the mortgage payable was 9.00 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 16.
33.	Record a journal entry to reflect that one half month’s insurance has expired.
A review of Byte’s job worksheets show that there are unbilled revenues in the amount of $19,000.00 for the period of June 28-30.
The Building and the Office Equipment have the following estimated useful lives:
Building – 31.5 years
Office Equipment – 7.0 years
Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The building’s salvage value is $7,000.00. The office equipment has a salvage value of $400.00. Calculate the depreciation for one month using the straight-line method of depreciation.
The Computer Equipment has an estimated useful life of 5.00 years.
	36	Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The computer equipment’s scrap value is $20,000.00. Calculate the depreciation for one month using the double declining method of depreciation.
A review of the payroll records show that unpaid salaries in the amount of $576.00 are owed by Byte for three days, June 28 – 30. Ignore payroll taxes.
The note payable to Royce Computers (transactions 04 and 08) is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year.
38.	[IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $120,000.00. On June 10, eight days later, $23,000.00 was repaid. Interest expense must be
calculated on the $120,000.00 for eight days. In addition, interest expense on the $97,000.00 balance of the loan ($120,000.00 less $23,000.00 = $97,000.00) must be calculated for the 20 days remaining in the month of June.]
	39	Our CPA has informed us to estimate that 3.00% of Computer & Consulting Revenue will be uncollectable.
Based on the information on the “Bank Reconciliation” sheet prepare the journal entry required to increases cash.
41.	Based on the information on the “Bank Reconciliation” sheet prepare the journal entry required to decreases cash.
Income taxes are to be computed at the rate of 25 percent of net income before taxes.
[IMPORTANT NOTE: Since the income taxes are a percent of the net income you will want to prepare the Income Statements through the	Net Income Before Tax
43.	Close the revenue accounts.
44.	Close the expense accounts.
45.	Close the income summary account.
46.	Close the dividends account.

Transaction

General Journal

General Journal
Transaction Date Account Name Description Debit Credit

Balance

0 0
01 Jun 01 1110 Cash

0 0 0 0

01 Jun 01 3100 Capital Stock investment by Lauryn

0 0 0 0 0 0 0

01 Jun 01 3110

investment by Lauryn

0 0 0 0 0 0 0

00 Dec 31 0 0 0 0 0 0 0 0 0 0
0

02 Jun 01 1110 Cash

0 0 0 0

02 Jun 01 1311 Computer Equip. investment by Yun Ma

0 0 0 0 0 0 0

02 Jun 01 3100 Capital Stock investment by Yun Ma 0 0 0 0 0 0 0 0

00 Dec 31 0 0 0 0 0 0 0 0 0 0
0 0

03 Jun 01 1311 Computer Equip. Courtney 0 0 0 0 0
03 Jun 01 1211 Office Equip. Courtney 0 0 0 0 0 0 0 0
03 Jun 01 3100 Capital Stock Courtney 0 0 0 0 0 0 0 0
03 Jun 01 3110 Paid-in Capital in Excess of Par Value Courtney 0 0 0 0 0 0 0 0

0 0

04 0 0 0 0 0 0