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ACTION VIDEO PRODUCTIONS Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. i ACTION VIDEO...

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ACTION VIDEO PRODUCTIONS
Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
i











ACTION VIDEO PRODUCTIONS
A Sole Proprietorship Service Business


INCLUDES:
• Company Profile
• Procedures Manual
• Source Documents
• Accounting Forms
• Audit Test


Price ▪ Haddock ▪ Farina


Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
ii
Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
iii
TABLE OF CONTENTS


INTRODUCTION…...……………………………………………………........………1


PROCEDURES MANUAL............................................................... XXXXXXXXXX2


SOURCE DOCUMENTS................................................................. XXXXXXXXXX5


JOURNALS................................................................................... XXXXXXXXXX37


GENERAL LEDGER...................................................................... XXXXXXXXXX45


ACCOUNTING STATIONERY...................................................... XXXXXXXXXX63


AUDIT TEST................................................................................. XXXXXXXXXX75


CHART OF ACCOUNTS.............................................................. XXXXXXXXXX77


Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
1
Introduction

The business in this simulation, Action Video Productions of Surfside, Florida, is organized as a sole
proprietorship and is owned by Adrian Martinez. Having received his bachelor’s degree in fine arts at a
Midwestern university, Adrian moved to the Miami area with the ultimate dream of becoming a video
news photographer. Once he is well established, he wants to direct his own video documentary based on
local subject matter for which he has found a unique perspective—something that could air on local
public television.
His overall professional goal is to own his own
oadcast quality video camera and earn his union
card as a video cameraman. The pay is excellent, and once in the union, he can freelance for various
television news departments around the area.
As a stepping stone to this dream, Adrian decided to create his own business, Action Video
Productions. The business specializes in event video photography, which allows him to utilize his
interests and skills.
Action Video Productions will digitally video record events such as weddings, anniversary parties,
and high school and college sports events. The videos are edited utilizing music where appropriate.
Creative title sequences will be added in order to provide clients with a professionally produced DVD.
Adrian has rented a space that will serve as an office and studio. It is near his apartment and is the base of
operations for Action Video Productions.
To market his business, Adrian plans to build his own Web page and use desktop publishing software
to create two versions of a
ochure (color for the wedding clientele, and black and white, mass-produced
flyers for the sports market). The
ochures will display images of weddings and sporting events he shot
ack in Iowa. The photographs showcase his seasoned eye for subject and composition. He plans to place
ads in the
idal announcement section of local newspapers, and has already introduced himself, through
letters with flyers, to high school and college athletic directors within a 45-minute radius of his home.
Adrian plans to create five-minute sample videos for both weddings and athletic events.
Adrian regularly scans local papers for notices of particular events, such as amateur sporting
tournaments, grand openings, and school plays, and contacts the organizers to acquaint them with his
service.
He has already received telephone inquiries about recording two weddings. A local high school
football coach is considering hiring Adrian to record the home games for the next season.
Adrian has employed Danielle Sloane to pay Action Video Productions’ bills and prepare bank
deposits. You are Adrian’s part-time accountant responsible for maintaining the books for Action Video
Productions.
You will keep the accounting records for Action Video Productions for the month of June. The first
day of operations will be June 2. Transactions should be recorded using the cu
ent year. The material in
this text is organized into three sections:
(1) Procedures Manual
(2) Weekly Transactions and Source Documents
(3) Accounting Forms
Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
2
Procedures Manual
This Procedures Manual contains instructions for completing the simulation.
Source Documents
In this simulation you will analyze various source documents to determine the entries to be made in
the general journal. To determine what information you should enter in the general journal, follow these
steps:
1. Read the source document to determine what the transaction involves.

2. Verify that the arithmetic on the source document is co
ect.

3. Determine the accounts that are affected by the transactions. (Use the chart of accounts for Action
Video Productions on page 77.)
4. Determine the account(s) to be debited and the amount(s).

5. Determine the account(s) to be credited and the amount(s).

6. Determine the word, number, or phrase to describe the transaction.

The source documents are grouped by week and include the following:
(1) Invoices to be paid
(2) Sales invoices
(3) Checks and receipts from clients
(4) Statements of account
(5) Memorandums
 INVOICES
Action Video Productions is a new business and many items will be purchased for its daily business
operations. Equipment and supplies are purchased either for cash or on account. When Action Video
Productions buys items on account, the company selling the items gives Action Video Productions an
invoice indicating the amount that Action Video Productions owes.
Before the information from an invoice is recorded in the general journal, you should check the
arithmetic to make sure that all the amounts have been calculated co
ectly. To verify these amounts,
multiply the quantity of items sold by the unit price for each item to see if the total, which is called an
extension, is co
ect. If there is an e
or in an extension, you should draw a line through the inco
ect
amount and write the co
ect amount above it. After you have verified all the extensions and recalculated
the sales tax, re-add the total column to find the co
ect total for the invoice.
If an e
or is found, notify Adrian Martinez in writing on the stationery provided on page 133. Include
information identifying the amount of the e
or, the item, and the company involved. In a real business
situation, you would call the company involved and ask to have a co
ected invoice issued.
Once you have finished verifying the information on an invoice, record the co
ect entry in the
general journal. The invoice is your source document for the general journal entry. Use "Invoice"
followed by the invoice number as the source document reference or general journal entry description.
Copyright © 2017 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
3
Answered Same DayMar 15, 2022

Solution

Neha answered on Mar 15 2022
38 Votes
Journal
        GENERAL JOURNAL
        DATE    DESCRIPTION    POST. REF.    DEBIT    CREDIT
        2-Jun    Bank a/c    Memorandum 1    $ 8,500.00
            To Capital            $ 8,500.00
            (Being Bnak account opened at Florida National Bank and deposited 8500 dollars.)
        2-Jun    Personal computer package (1.0 GHz Processor, keyboard, monitor, mouse, printer and cables)    Invoice 1131    $ 2,100.00
            Matrix capture card for MPEG 2 compression with editing software package        $ 2,000.00
            Additional color monitor        $ 300.00
            Pair computer speakers        $ 60.00
            AC stabilizer        $ 150.00
            Work table        $ 175.00
            Sales Tax (6%)        $ 287.10
            To Cash/Bank            $ 5,072.10    check 101 - 2100
            (Capitalised the assets bought for business.)
        2-Jun    20 Newspapers    Invoice 1250    $ 20.00
            Sales Tax (6%)        $ 1.20
            To Cash/Bank            $ 21.20    102 -21.2
            (For purchase of 20 different weekly community newspapers)
        3-Jun    100 8x10 color @ 1.35 per copy    Invoice 602    $ 135.00
            500 8x10 b&w @ .07 per copy        $ 35.00
            Sales Tax (6%)        $ 10.20
            To Cash/Bank            $ 180.20    103
            (For copying of marketing flyers.)
        4-Jun    Rent (highland Realtors)    Memorandum 2    $ 975.00
            To Cash/Bank            $ 975.00    104
        3-Jun    Newspapers    Statement    $ 450.00
            To Cash/Bank            $ 450.00    105
            (10 weekly community newspapers)
        5-Jun    Sports utility vehicle    Memorandum 3    $ 23,540.00                ca
            To Cash/Bank            $ 23,540.00
        5-Jun    Adrian Martinez    Source Doc 8    $ 28.00
            To Cash/Bank            $ 28.00    106
            (reimbursement of cash paid to athletic department milings)
        5-Jun    Accounts Receivable    Invoice S101    $ 1,950.00
            To DeCilla/Boles Wedding    Receipt 1        $ 650.00
            To sales            $ 1,300.00
            (Videography of DeCilla/Boles Wedding)
        5-Jun    Accounts Receivable    Invoice S102    $ 600.00
            To DeCilla/Boles Wedding    Receipt 2        $ 300.00
            To sales            $ 300.00
            (Videography of Glastre Art Gallery grand opening and delivery of unedited digital master DVDs)
        8-Jun    Digital video camera    Invoice 2105    $ 2,100.00
            DVD recorder        $ 250.00
            4-hour battery belt        $ 550.00
            Tripod        $ 200.00
            Sales tax(6%)        $ 186.00
            To Cash/Bank            $ 3,286.00
            (Being assets purchased)
        9-Jun    DeCilla/Boles Wedding    Receipt 3    $ 300.00
            To Sales            $ 300.00
            (Videography of Glastre Art Gallery grand opening and delivery of unedited digital master DVDs)
        9-Jun    Blank DVD    Invpice 1602    $ 300.00        108
            Sales tax(6%)        $ 18.00
            (Purchase done)            $ 318.00
        9-Jun    Adrian Martinez    Memo 5    $ 550.00        109
            To Cash/Bank            $ 550.00
            (Reimbursement)
        10-Jun    Accounts Receivable    Invoice S103    $ 1,500.00
            To Golden Anniversary    Receipt 4        $ 500.00
            To sales            $ 1,000.00
            (Videography of Golden Anniversary)
        11-Jun    Accounts Receivable    Invoice S104    $ 1,030.00
            To Sales            $ 1,030.00
        11-Jun    Liability Coverage    Source doc 19    $ 756.00
            To Cash/Bank            $ 756.00    110
        12-Jun    Cash    Receipt 5    $ 650.00
            To Accounts Receivable            $ 650.00
            (Receipt for 2nd installemnt)
        12-Jun    Cash/ Bank    Sorce doc 21    $ 450.00
            To Sales            $ 450.00
            (DVD Sales)
        15-Jun    Salary    22    $ 750.00
            To Cash/Bank            $ 750.00    111, 112
            (Salary paid)
        15-Jun    DeCilla/Boles Wedding    Receipt 5    $ 650.00
            To sales            $ 650.00
            (Sales)
        16-Jun    8 channel sound board    Invoice 7083    $ 325.00
            CD Player        $ 130.00
            Sales Tax 6%        $ 27.00
            To Cash
anks            $ 482.00
            (Paid)
        16-Jun    Check    Statement    $ 174.00        113
            To Advertisment            $ 174.00
            (For Ad played)
        17-Jun    Cash        $ 650.00
            To Accounts Receivable            $ 650.00
            (Received for Nicholas wedding)
        17-Jun    Check    27    $ 44.52
            To Sales            $ 44.52    114
            (To duplicate weddingS)
        18-Jun    Bank    Memo 8    $ 46.64
            To Cash            $ 46.64
            (Deposited received from Dade)
        19-Jun    Cash    Receipt 8    $ 500.00
            To Accounts Receivable            $ 500.00
            (Installemnt received)
        19-Jun    Cash    Receipt 9    $ 350.00
            To Accounts Receivable            $ ...
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