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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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What’s the journal, ledger, worksheet, adjustments, closing entries , post-closing trial balance , and statements?

Transcribed Image Text:Case
Accounting Cycle
and operated by Bryson Woods. The closing balances at the end of August 2021 and the chart of accounts are
BW Travel and Tours is a travel agency that offers international and local travel packages. The company is owned
shown below.
BW Travel and Tours
Balance Sheet
As at August 31, 2021
Liabilities
Assets
Cash
$14,230 Accounts Payable
$11,700
$16,200
Accounts Receivable
$8,520 Unearned Revenue
$0 Bank Loan
$25,000
Prepaid Insurance
$65,800
Equipment
-$9,600 Total Liabilities
Accumulated Depreciation
$52,900
Woods Capital
$26,050
Total Assets
$78,950 Total Liabilities & Owners' Equity
$78,950
Account Description
Account #
REVENUE
ASSETS
Cash
101
Service Revenue
105
EXPENSES
Accounts Receivable
Prepaid Insurance
110
Advertising Expense
Equipment
120
Depreciation Expense
Accumulated Depreciation
125
Insurance Expense
LIABILITIES
Interest Expense
Accounts Payable
200
Salaries Expense
Interest Payable
205
Telephone Expense
Salary Payable
210
Travel Expense
Unearned Revenue
215
Rent Expense
Bank Loan
220
OWNER'S EQUITY
Woods Capital
300
Woods Withdrawals
310
Income Summary
315
For the month of September 2021, BW Travel and Tours had the following transactions:
Sept 1
Bryson invested $15,000 cash and equipment valued at $12,500 into the business.
Prepaid $4,500 for insurance for one year.
Sept 1
Sept 1
Paid $1,950 cash for September's rent.
Sept 2
Provided travel package to group of travellers; they paid $22,500 now and will pay
$4,500 later.
Sept 5
Recorded travel expenses for $9,100 to be paid next month.
Purchased equipment with $13,000 cash.
Sept 11
Sept 15
Paid $5,850 cash to reduce the balance of accounts payable.
Sept 18
Received $4,260 cash from customers for the travel services provided last month.
Received a telephone bill for $880 which will be paid next month.
Sept 20
Sept 23
Paid $4,150 cash for employee's salaries.
Received $26,700 cash in advance from travellers for travel services to be provided next
Sept 26
month.
Sept 28
Paid $2,530 advertising expense for the promotion of the travel and tours in the month
of September.
Sept 29
The owner withdrew $6,550 cash for personal use.
Sept 30
Paid $833 cash for the bank loan which included $625 principle and $208 interest.
Sept 30
Received a loan from the bank for $20,000
Note: This amount is due in 2 years plus accrued interest at 10%
Account Description
Account #
400
500
510
515
520
545
550
555
560

Transcribed Image Text:At the end of September, the following adjustment had to be journalized to properly report the balances of the
company's accounts:
Sept 30
$31,560 of the balance of unearned revenue, still remains unearned.
Sept 30
BW Travel and Tours billed a group of travellers for additonal travel services. This
package is amounting to $8,200. They agreed to pay next month.
One month of prepaid insurance worth $375 has been used.
Sept 30
Sept 30
Monthly depreciation on the equipment was $1,270.
Sept 30 Accrued salary expense of $2,075 for an employee.
The bank loan is payable over 6 years and $625 monthly payment.
Required:
a) Enter the opening balances from the August 2021 balance sheet into the general ledger accounts.
b) Prepare the journal entries for the month of September and post them to the appropriate general ledger
accounts.
c) Create the trial balance in the worksheet, and then complete the remaining section of the worksheet.
d) Prepare the journal entries for the adjustments and post them to the appropriate general ledger accounts.
e) Create the income statement, statement of owner's equity and the classified balance sheet.
f) Prepare the journal entries to close the books for the month of September 2021 (use the income summary
account), and post the journal entries to the appropriate general ledger accounts.
g) Create the post-closing trial balance.
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