ACCT 211 Individual Learning Project Study Guides

Karla Tanner opens a web consulting business called Linkworks and recorded the following

transactions in its first month of operations.

Apr. Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company

1 in exchange for common stock.

Apr. The company prepaid $9,000 cash for twelve months rent for office space. The company's

2 policy is record prepaid expenses in balance sheet accounts.

Apr. The company made credit purchases for $8,000 in office equipment and $3,600 in office

3 supplies. Payment is due within 10 days.

Apr.

6 The company completed services for a client and immediately received $4,000 cash.

Apr.

9 The company completed a $6,000 project for a client, who must pay within 30 days.

Apr.

13 The company paid $11,600 cash to settle the account payable created on April 3.

Apr. The company paid $2,400 cash for the premium on a 12-month insurance policy. The

19 company's policy is record prepaid expenses in balance sheet accounts.

Apr.

22 The company received $4,400 cash as partial payment for the work completed on April 9.

Apr.

25 The company completed work for another client for $2,890 on credit.
 Apr.

28 The company paid $5,500 cash in dividends.

Apr.

29 The company purchased $600 of additional office supplies on credit.

Apr.

30 The company paid $435 cash for this months utility bill.

Descriptions of items that require adjusting entries on April 30, 2015, follow.

a) On April 2, the company prepaid $9,000 cash for twelve months' rent for office space.

The balance in Prepaid insurance represents the premium paid for a 12-month insurance

b) policy; the policy's coverage began on April 1.

c) Office supplies on hand as of April 30 total $1,200.

Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage

d) value, is $500 per month.

e) The company has completed work for a client, but has not yet billed the $1,800 fee.

f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
General Journal tab -For each transaction, review the unadjusted balance and prepare

the adjusting entry necessary to correctly report the revenue earned or the expense

incurred. After adjusting the accounts, review the general ledger and trial balance for

accuracy.

General Ledger tab - Each journal entry is posted automatically to the general ledger.

Use the drop-down button to view the unadjusted or adjusted balances.

Trial Balance tab - You may view either the unadjusted or adjusted trial balance by

choosing from the dropdown box below. Your choice will determine the reported values

on the financial statement tabs.

Income Statement tab - Use the drop-downs to select the accounts properly included

on the income statement. The unadjusted or adjusted balances will appear for each

account, based on your selection.

Statement of Retained Earnings tab - The unadjusted or adjusted balances will

appear for each account, based on your selection.

Balance Sheet tab - Use the drop-downs to select the accounts properly included on

the balance sheet. The unadjusted or adjusted balances will appear for each account,

based on your selection.

Impact on Income tab -For each adjustment, indicate the income statement and

balance sheet account affected, and the impact on net income. If an adjustment caused

net income to decrease, enter the amount as a negative value. Net income before

adjustments can be found on the income statement tab. (Hint: Select unadjusted on

the dropdown.)

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her

business. (Although the serial problem allowed for various ownership changes in earlier chapters, we

will prepare the statement of cash flows using the following financial data.)

Required:
Prepare a statement of cash flows for Business Solutions using the indirect method for the three months

ended March 31, 2016. Recall that the owner Santana Rey contributed $35,000 to the business in

exchange for additional stock in the first quarter of 2016 and has received $4,000 in cash

dividends. (Amounts to be deducted should be indicated with a minus sign.)