An accounting cycle comparison – My Assignment Tutor

Please jus the beginning Trial Balance completed in a completed Chart Of Accounts

The Company History and Instructions

Runners Company was started in the State of Ohio two years ago by Mr. Noah Arc as a sole proprietorship. The company distributes running shoes to retailers all over the United States.

Runners Company currently maintains an accrual based manual accounting system and uses specialized journals to record its business transactions. A general ledger is maintained, as are an accounts receivable subsidiary ledger and an accounts payable subsidiary ledger. Financial statements are prepared at the end of each month, and the books are closed on December 31.

An accounting cycle comparison:

Accounting procedures are essentially the same whether they are performed manually or on a computer. The following is a list of the accounting cycle steps in a manual accounting system as compared to the steps in a computerized accounting system.

Manual Accounting System
1. Business transactions occur and generate source documents.
2. Analyze and record business transactions manually into a journal.
3. Post or transfer information from journal to ledger.
4. Prepare a trial balance.
5. Prepare a worksheet, determine and enter necessary adjustments.
6. Journalize and post adjusting entries.
7. Prepare financial statements.
8. Journalize and post-closing entries.
9. Prepare a post-closing trial balance

The accounting cycle comparison shows that the accountant’s task of initially analyzing business transactions in terms of debits and credits (both routine business transactions and adjusting entries) is required in both manual and computerized accounting systems. However, in a computerized accounting system, the “drudge” work of posting transactions, creating and completing worksheets and financial statements, and performing the closing procedures is all handled automatically. In some computerized accounting programs, entries may be entered on business forms and the computer will show the entry in debit/credit format when viewing the Journal.

In addition, computerized accounting systems can perform accounting procedures at greater speeds and
with greater accuracy than can be achieved in a manual accounting system. It is important to recognize,
however, that the computer is only a tool that can accept and process information supplied by the
accountant. Each business transaction and adjusting entry must first be analyzed and recorded in a
computerized journal correctly; otherwise, the financial statements generated by the computerized
accounting system will contain errors and will not be useful to the business.


The Accounting Records for Runners Company

The business transactions completed during the first eleven months of the current year have been
recorded by Runners Company’s former bookkeeper in the manual general ledger. You have been hired to
complete the accounting work for December 2019 into the new computerized accounting system that the owner has chosen, QuickBooks Online, and to prepare the financial statements for the year.

All beginning balances for each general ledger account, each customer and vendor account are included, beginning with the Trial Balance as of December 1, 2019, you are to create the company in the QuickBooks Online program and proceed to complete the December transactions.

After completion of this practice set, you are required to file the tax return for Noah Arc. The return is due July 15, 2020 (Extended because of COVID 19). The normal due date is April 15, 2020

The Runners CompanyTrial Balance December 1, 2019
Acct. No. Debit Credit
10100 $ 56,386
10500 20,000
11000 47,839
11100 $4,500
11500 20,595
11700 250
11900 2,000
16000 10,000
17000 150,000
17500 7,500
18000 42,675
18500 8,535
19000 5,000
20100 56,803
30100 168,662
41000 475,445
41500 4,000
41600 2,000
51000 206,000 .,
60100 133,685
60200 3,000
60300 2,000
60400 7,000
60700 2,750
60800 4,500
60900 1,665
61000 100
$721,445 721,445

The Accounts Receivable and Accounts Payable Beginning balances for December 1, 2019 appear below:

Accounts Receivable Subsidiary Ledger
Customer ID Date of Original Invoice Invoice Number Amount
2050 Feb. 1 6030 $2,000
2052 Nov. 1 6180 28,689
2056 Nov. 1 6192 4,000
2057 Nov. 1 6189 13,150
Accounts Payable Subsidiary Ledger
Vendor Number Date of Original Invoice PO/Invoice Number Amount
02 Nov. 17 3533 $33,000
03 Nov. 17 3532 $18,000
04 Nov. 17 3534 $5,803

1. Set up all General Ledger accounts according to the December 1, 2019 Trial Balance that is provided.

May sure you use a December 1, 2019 date during ALL phases of set up.

You may enter the beginning balance amounts for each account at this time or you can use a journal entry to enter beginning balances. DO NOT ENTER BEGINNING BALANCES FOR THE ACCOUNTS RECEIVABLE, THE ACCOUNTS PAYABLE and THE INVENTORY ACCOUNT. The beginning balances for these 3 accounts will be entered later.

Acct. No. AccountType DetailType Debit Credit
10100 Bank Checking $56,386
10500 Other Current Assets Investments – Other 20,000
11000 Accounts Receivable Accounts Receivable
11100 Other Current Assets Allowance for Bad Debts 4,500
11500 Other Current Assets Inventory
11700 Other Current Assets Prepaid Expenses 250
11900 Other Current Assets Prepaid Expenses 2,000
16000 Fixed Assets Land 10,000
17000 Fixed Assets Buildings 150,000
17500 Fixed Assets Accumulated Depreciation 7,500
18000 Fixed Assets Machinery & Equipment 42,675
18500 Fixed Assets Accumulated Depreciation 8,535
19000 Fixed Assets Furniture & Fixtures 5,000
20100 Accounts Payable Accounts Payable
20200 Other Current Liabilities Federal Income Tax Payable
20300 Other Current Liabilities Other Current Liabilities
20400 Other Current Liabilities Other Current Liabilities
20500 Other Current Liabilities Other Current Liabilities
20600 Long Term Liabilities Note Payable
20700 Other Current Liabilities Other Current Liabilities
30100 Equity Opening Balance Equity 168,662
30200 Equity Owner’s Equity
Acct No. Account Type Detail Type Debit Credit
36000 Equity Paid in Capital or Surplus
41000 Income Sales of Product Income 475,445
41500 Income Discounts/Refunds Given 4,000
41600 Income Discounts/Refunds Given 2,000
41700 Income Other Investment Income
51000 Cost of Goods Sold Supplies & Materials- COGS 206,000
60100 Expenses Office General Administration 133,685
60200 Expenses Utilities 3,000
60300 Expenses Supplies and Materials 2,000
60400 Expenses Advertising/Promotional 7,000
60500 Other Expense Depreciation
60600 Other Expense Depreciation
60700 Expenses Insurance 2,750
60800 Expenses Bad Debts 4,500
60900 Expenses Other Business Expenses 1,665
61000 Other Expense Other Miscellaneous Expense 100
61200 Expenses Interest Paid
61300 Other Expenses Depreciation
61400 Expense Taxes Paid
19500 Fixed Assets Accumulated Depreciation
61100 Cost of Goods Sold Supplies & Materials-COGS

2. Add the following Customers and their beginning balance amounts:

Accounts Receivable beginning balances for December 1, 2019
Customer ID Original Date ofInvoice InvoiceNumber Amount
2050 Feb 1 6030 $2,000
2052 Nov 1 6180 28,689
2056 Nov 1 6192 4,000
2057 Nov 1 6189 13,150
Totals $47,839

3. Add the following Vendors and their beginning balance amounts:

Accounts Payable beginning balances for December 1, 2019
Vendor Number Original Date ofInvoice PO/InvoiceNumber Amount
02 Nov 17 3533 $33,000
03 Nov 17 3532 18,000
04 Nov 17 3534 5,803
Totals $56,803

4. Add the following items that you will be selling to the Products and Services List:

· The TYPE is Inventory

· The Inventory asset account is 11500 Inventory

· The Income account is 41000 Sales

· The Expense account is 51000 Cost of Goods Sold

Item #& Name CostPrice Sale Price
105/Adidas $25 $75
110/Reebok $35 $90
120/Converse $22 $65
130/Payless $19.95 $50

5. After the completion of instructions 1 through 4, print a Trial Balance as of December 1, 2019. Check your work by comparing to the original Trial Balance. Correct any errors. Name the Trial Balance:

Runners Company

Trial Balance

As of December 1, 2019

You are required to submit this with the rest of your project.

6. Enter all of the transactions for December 2019.

7. Prepare a Schedule of Accounts Receivable as of XXXXXXXXXX and submit with the rest of your project.

8. Prepare a Schedule of Accounts Payable as of XXXXXXXXXX and submit with the rest of your project.

9. Print a Trial Balance before you begin adjustments. Name the Trial Balance:

Runners Company

Trial Balance before Adjustments

As of December 31, 2019

You are required to submit this with the rest of your project.

10. You are now prepared to enter your adjustments. The following is your Adjustment data:

After you complete your adjustments, run another trial balance and name it, Trial balance after Adjustments. You are required to submit this with the rest of your project.

· The physical inventory of merchandise at the close of business, December 31, 2019 showed $25,822.50 consisting of:

Item #105 Quantity on Hand 250 pairs

Item #110 Quantity on Hand 320 pairs

Item #120 Quantity on Hand 172 pairs

Item #130 Quantity on Hand 230 pairs

Use the Inventory Quantity Adjustment window to make the above adjustments to inventory.

Use the Inventory Quantity Adjustment window to make the above adjustments to inventory, using general account #61100, Inventory Adjustment Expense. The total value of the adjustments adds up to -$1,351.

· Refer to your Trial Balance before adjustments to verify adjustments:

The physical inventory of merchandise at the close of business on December 31, 2019 showed $25,822.50

Office Supplies on hand on December 31, $1,500

Insurance expired for the month of December, $250

Depreciation expense for 2019: (You can enter a compound entry)

Office Equipment $8,535

Building 7,500

Display Cases 1,000

Accrued salaries at December 31, $7,000 (no need to record payroll taxes)

Accrued interest at December 31, $400

Accrued property tax For November and December but payable in April 2020, $1,139

Income tax Paid on Dec 31, 2019 is $24,000.

Management has decided to increase the Allowance for Uncollectible Accounts by $200.

11. Run the following reports which will be turned in with this project and will be used to complete the tax return for this project:

Income Statement Run the report from December 1, 2019 to December XXXXXXXXXX

Balance Sheet Run report from December 1, 2019 to December 31, 2019

Statement of Cash Flows Run the report from December 1, 2019 to December 31, 2019

Journal Run the report from December 1, 2019 to December 31, 2020

Journal Run the report from December 2, 2019 to December 31, 2020

12. Include the following ratios to be submitted with your project:

· Current Ratio

· Quick ratio

· Debt ratio

· Return on assets

· Return on equity

13. Prepare a tax return using the free Intuit ProConnect tax software. This return and all its schedules and forms are to be submitted with your project

Instructions for Tax return for Noah and Joan Arc

Noah and Joan Arc live with their family in Dayton, Ohio. Johns Social Security number is XXXXXXXXXXNoah was born on February 22, 1972, and Joan was born on July 1, 1984. Both enjoy good health and eyesight. Noah owns and operates a company that sells running shoes to other stores around the United States. Joan is a firefighter for the city of Dayton.

1. The Arcs have two children, a son named Billy Bob (Social Security number XXXXXXXXXX), born on March 21, 2010, and a daughter named Mary Sue (Social Security number XXXXXXXXXX), born on December 3, 2013.

2. Noah and Joan’s Tax documents are included.

3. Noah’s company is located at 1415 S. Patterson Blvd, Dayton, OH XXXXXXXXXXThe name of the company is “The Runners Company” and its taxpayer identification number is XXXXXXXXXXSince you handle Noah’s accounting, you have printed the income statement from your QuickBooks software included in the attached paperwork.

4. Noah and Joan paid the following amounts during the year (all by check):

Political contributions $250

Church donations (for which a written

Acknowledgement was received) 2,625

Real Estate on their home 1,375

Medical co-pays for doctor visits 700

Mortgage interest for purchase of home see form 1098 included

Tax return preparation fees 500

Credit card interest 220

Auto insurance premiums 600

Uniforms for Joan 125

5. Noah has a long-term capital loss carryover from last year of $2,375.

6. Noah and Joan own rental property located at 16 Oakwood Ave, Dayton, OH 45409.The revenue and expenses for the year are as follows:

Rental Income $13,800

Insurance 575

Interest expense 6,870

Property Taxes 1,000

Miscellaneous Expenses 700

Depreciation (The house was acquired in XXXXXXXXXX,000

7. All family members were covered the entire year under health care insurance under Joan’s employer.

8. The Arcs paid Ohio general sales tax of $976 during the year.

Required: You are to prepare their federal income tax return in good form, signing the return as the preparer. Make realistic assumption about any missing data (addresses, etc.) that you may need.

The following forms and schedules are required:

Form 1040 Schedule E

Schedule 1 Schedule SE

Schedule B Form 2441

Schedule C Form 8949

Schedule D Qualified Dividends and Capital Gain Worksheet

Form 8995 Child Tax Credit Worksheet

Charlotte Squab Financial Services

This Photo by Unknown Author is licensed under CC BY-SA


123 Wall Street

New York, NY 10022

December 31, 2019

Joan and Noah Arc

1265 W. Riverview Avenue

Dayton, OH 45402


Payor Box 1bQualifiedDividends Box 2aCapitalGainDistributions Box 4Federal IncomeTax Withheld Box 6Foreign TaxPaid Box 10Tax-ExemptDividends
Exxon Mobil 308.00 00.00 00.00 00.00 00.00
Texas Utilities 1,220.00 00.00 00.00 00.00 00.00
Coca-Cola 320.00 00.00 00.00 00.00 00.00
Description Date Sold Proceeds Basis ReportedTo IRS
100 shares BlueCorp. 08/15/2019 4,500.00 2,500.00
50 shares YellowCorp. 06/05/2019 6,100.00 5,300.00
25 shares Red corp. 10/07/2019 12,300.00 1,600.00


January 12, 2020

Noah and Joan Arc

1265 W. Riverview Avenue

Dayton, OH 45402

Dear Joan and Noah,

Thank you for a great 2019 at Roundup! We appreciate your patronage during the year and hope to provide excellent service for Mary Sue in 2020. We have provided the tax information for calendar year 2019 below. Please let us know if you need any additional informational.


Charles F. Burgundian

Charles F. Burgundian

Executive Director, Roundup Day Care


Date of Service Child’s Name
Jan 01, 2019 to Dec 31, 2019 Mary Sue Arc

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