Prepare a Trial Balance

[sao123]

My cousin called me for homework assistance in accounting.
being that I graduated with a bachelors in Comp Science and minored in Math, she must have thought I might know something about balancing stuff.

gah... so if any of you can point me in the correct direction, it might be helpful.


Problem summay:

[*]Doug created a lawn mowing business on May 1. On August 31 he was ready to dissolve the business and go back to college.
[*]Opened a bank account with $1,000 ($400 of his own money, and a loan of $600 from his dad)
[*]Dougs has a checkbook balance of $690 as of Aug 31.
[*]He is still owed $500 from customers.
[*]He collected $4,250 from customers already.
[*]He bought supplies for $400, and at the end of the summer his remaining supplies(gas+etc) is worth $50.
[*]He hired some friends to help, and paid them $1,900 and still owes them $200.
[*]Doug rented some mower equipment and prepaid $600 for a full 6 month lease. He will get a refund of the difference if he turn ths equipment in early, and it is in good shape.
[*]He is returning it after 4 months, and paid $300 to have one mower repaired to ensure he will get the refund.
[*]Doug bought a trailer for $300 to transport his friends + equipment to the jobs, and believes he used up 1/3 of its expected life.
[*]Doug has $460 in cash withdrawls from the account for the summer.
[*]Doug Paid back his father in august.

Prepare the classified balance sheet of Matlbee Lawn Service at august 31.


We have 6 columns, trial balance, adjustments and adjusted trial balance. (each having a credit and debit column)

so far, we cant get the columns to equal out like they are supposed to... but being a NON-FINANCE person... I have no clue what I am doing.

Debit:
Cash: 690
Accounts Recievable: 500
Supplies: 50
Capital: 1000
Revenue: 4250

total: 6490


Credit:
Rent: 600
Salary Payable: 200
Worker Pay: 1900
Withdrawls: 460
loan repayment: 600
Repair bill: 300
Supplies: 400
total: 4760

i dont even know how to proceed to the next columns until the first 2 balance.

can anyone help us??

 

[theflyingpig]

Originally posted by: sao123

can anyone help us??

No.

 

[sao123]

Originally posted by: theflyingpig

Originally posted by: sao123

can anyone help us??

No.

:sigh

 

[RbSX]

This question is a bitch because it doesn't operate on a timeline.. how annoying.. I did this stuff last semester.

Anyways I know you're wrong because Revenue is always a credit balance.

It LOOKS like you guys are trying to do an income summary.


I'll get back to you.

 

[JulesMaximus]

See, Oracle does all that for me.

 

[sao123]

Originally posted by: RyanSengara
This question is a bitch because it doesn't operate on a timeline.. how annoying.. I did this stuff last semester.

Anyways I know you're wrong because Revenue is always a credit balance.

It LOOKS like you guys are trying to do an income summary.


I'll get back to you.

This is the document she needs to do for this example problem.

 

[mcmilljb]

Well I can already tell you and your cousin are lost just by looking at your debits and credits. I see she doesn't understand debits and credits.
Debit = left side
Credit = right side

Assests have a Debit Normal Balance
Liabilities have a Credit Normal Balance
Owner's Equity has a Credit Normal Balance

Each transaction has at least one debit and at least one credit.
If I debit something, I have to credit something else.

Lets apply what we know to the first transaction.

Opened a bank account with $1,000 ($400 of his own money, and a loan of $600 from his dad)

You have $1000 Cash. That's an assest so we put it on the Debit side of the Cash Account.
Doug has a $400 equity in the business, so we put $400 on the Credit side of the Capital Account because we're increasing his capital equity. Doug has a liability to his dad for $600, so you can call it loan (or accounts payable or whatever you want to represent it since it's due in the future). You just need to know it's a liability. Since we're increasing a liability, we need to add $600 to the Credit side of the liability account which in this case it looks like you're calling it loan repayment.

How do we check this transaction?
$1000 cash = $400 capital + $600 loan
It balances so we know we did it right.
Now just apply this to each transaction ignoring any adjustments you need to make because you're just trying to account for all the transactions. After your trial balance works out, then you can do adjustments and the adjusted balance.

 

[ItsPat]

The problem really sucks. You do an adjustment after a period is over, and it doesn't say the period is over on any of the bullet points. Is that exactly how the problem reads?

I can get it to balance fine, but I don't see how they have a 690 dollar balance at the end in their checking account.

 

[sao123]

Originally posted by: ItsPat
The problem really sucks. You do an adjustment after a period is over, and it doesn't say the period is over on any of the bullet points. Is that exactly how the problem reads?

I can get it to balance fine, but I don't see how they have a 690 dollar balance at the end in their checking account.

Doug Maltbee formed a lawn service business as a summer job. To start the business on May 1, he deposited $1,000 in a new bank account in the name of the proprietorship. The $1,000 consisted of a $600 loan from his father and $400 of his own money. Doug rented lawn equipment, purchased supplies, and hired fellow students to mow and trim his customer's lawns.
At the end of each month, Doug mailed bills to his customers. On August 31, he was ready to dissolve the business and return to Louisiana State University for the fall semester. Because he was so busy, he kept few records other than his checkbook and a list of amounts owed to him by customers.
At August 31, Doug's checkbook shows a balance of $690, and his customers still owe him $500. During the summer, he collected $4,250 from customers. His checkbook lists payments for supplies totaling $400, and he still has gasoline, weedeater cord, and other supplies that cost a total of $50. He paid his employees $1,900, and he still owes them $200 for the final week of the summer.
Doug rented some equipment from Scholes Machine Shop. On May 1, he signed a six-month lease on mowers and paid $600 for the full lease period. Scholes will refund the unused potion of the prepayment if the equipment is in good shape. To get the refund, Doug has kept the mower in excellent condition. In fact, he had to pay $300 to repair a mower.
To transport employees and equipment to jobs, Doug used a trailer that he bought for $300. He figures that the summer's work used up one-third of the trailer's service potential. The business checkbook lists a payment of $460 for cash withdrawals by Doug during the summer. Doug paid his father back during August.
As a team, prepare the income statement of Maltbee Lawn Service for the four months May through August. Prepare the classified balance sheet of Maltbee Lawn Service at August 31.

 

[CPA]

Assets = Liabilities + Owners Equity

It's a Trial sheet so you will have to concern yourself with each line item. I have provided you a Balance Sheet (which is not a Trial Balance) to give you some direction. You will have to do the rest on your own.

Asset
Cash $690
Prepaid Lease $200 (less 4 months usage (expense))
Equipment $300
Depreciation ($100)
A/R $500

Total Assets $1590

Liabilities
Salaries Payable $200

Owner's Equity
Owner's Contribution $400
Owner's Withdrawal ($460) (This is actually a debit in a liability account)
Retained Earnings $1450 (income for the period)

Total Liab + OE = $1,590

Trial Balance is basically what was in the account May 1. Adjustments are, well....adjustments, during the period. Adjusted balance is what's the balance at Aug 31 (beginning balance plus/minus adjustments). Remember, for a trial balance you need to show each account seperately, including expense lines. There are accounts she will need to include that are not necessarily given in the example - for instance, depreciation.

 

[sao123]

boy am I glad I can stick to programming, because Id never make it as an accountant.

 

[DarrelSPowers]

Dude, I'm taking accounting 209 for my business minor, and I did this EXACT same problem the other day, baked out of my head, and got the right answer.

Listen to the CPA, he knows his shit.

 

[CPA]

Originally posted by: DarrelSPowers
Dude, I'm taking accounting 209 for my business minor, and I did this EXACT same problem the other day, baked out of my head, and got the right answer.

Listen to the CPA, he knows his shit.

Accounting...so easy even a stoner can do it!

 

[CPA]

Originally posted by: sao123

boy am I glad I can stick to programming, because Id never make it as an accountant.

Funny thing is in college I started out in programming and changed to accounting.

 

[Kntx]

Originally posted by: sao123

boy am I glad I can stick to programming, because Id never make it as an accountant.

I program accounting systems... double lose.

 

[BoomerD]

Originally posted by: sao123

Originally posted by: RyanSengara
This question is a bitch because it doesn't operate on a timeline.. how annoying.. I did this stuff last semester.

Anyways I know you're wrong because Revenue is always a credit balance.

It LOOKS like you guys are trying to do an income summary.


I'll get back to you.

This is the document she needs to do for this example problem.

ROFL..Rock Castle?

She must be taking the same quickbooks class I took last semester.




Debit:
Cash: 690
Accounts Recievable: 500
Supplies: 50
Capital: 1000---------Should be a CREDIT, not a Debit
Revenue: 4250------ Should be a CREDIT, not a Debit

total: 6490


Credit:
Rent: 600------------Unless the rent is owed and not paid, this should be a debit
Salary Payable: 200
Worker Pay: 1900
Withdrawls: 460---------Withdrawals should be a debit
loan repayment: 600------How is this set up? Probably "loan expense" or something similar--DEBIT
Repair bill: 300 -Repair Expense---DEBIT
Supplies: 400 Unless this is supplies USED---it should be a DEBIT
total: 4760


Here a tip for your "cousin."

Assets, withdrawals, and expenses are normally Debit+ accounts
Liabilities, Capital, and Revenues are normally Credit+ accounts

http://www.jemappelleandre.com...%20Entry%20%20Rule.jpg

 

[DarrelSPowers]

Originally posted by: CPA

Originally posted by: DarrelSPowers
Dude, I'm taking accounting 209 for my business minor, and I did this EXACT same problem the other day, baked out of my head, and got the right answer.

Listen to the CPA, he knows his shit.

Accounting...so easy even a stoner can do it!

Yeah, the class is at 8AM and I really wish I could be more awake so I could get more out of it. The guy who teaches it was a very successful CPA and retired to teach a joke class for business minor students. Best part about his teaching is how he constantly goes off on how things are "really done" all of the "gray areas" and how less ethical accountants consistently get away with what they do.

Being an engineer, accounting is a bit too abstract for me, but taking this class really makes me respect, and want to make friends with, good accountants.

 

[sao123]

ok well... after re-reading CPA... and more research... I might be getting the hang of this.

NOT REALLY

but i might be getting closer to the answer.

Text
How close is this, and what do we have to do next?


this is making my head hurt.



edit: i fixed a really egregious error...
i labeled the assets and LOE backwards.

 

[PingSpike]

Sorry dude, after I completed accounting I had that part of my brain surgically removed to prevent suicide.

 

[CPA]

Originally posted by: sao123
ok well... after re-reading CPA... and more research... I might be getting the hang of this.

NOT REALLY

but i might be getting closer to the answer.

Text
How close is this, and what do we have to do next?


this is making my head hurt.



edit: i fixed a really egregious error...
i labeled the assets and LOE backwards.

Won't be able to answer until tonight because bbzzdd is blocked here at work.

 

[BoomerD]

I'm not sure why you have the $50 credit for supplies in the income statement. Those accounts should be clean. All adjustments should be taken care of in the worksheet.

http://www.principlesofaccount...T/C4art/worksheeta.PNG

 

[dquan97]

nobody asked for pics!?

PICS!

 

[Ns1]

Would it make you feel dirty if a mentally deficient doper helped you out with your trial balance?

 

[sao123]

Originally posted by: Ns1
Would it make you feel dirty if a mentally deficient doper helped you out with your trial balance?

should it?
Would you ask for C++ help from an arrogant religious man?

 

[sao123]

Originally posted by: dquan97
nobody asked for pics!?

PICS!

hmm... well if you look hard enough, you can find a picture of me.
Replace the face with Peppermint Patty from charlie Brown, add freckles and 2 kids.
surely u can imagine eh?