On December 1, you and your friends invest $300,000 into the company in exchange for Let’s Dance common stock
Loving Laurie’s Laundry
Accounting Cycle Project #2
BUS 2101 – Introduction to Financial Accounting
Mr. Steve Benner
Loving Laurie needs your help! She really dislikes accounting and doesn’t know what
to do. A couple of days ago, she heard a rumor that you were an accounting wiz. She hu
ied
ack to her Laundromat, picked up the phone, and called you in for an interview. Laurie was
so impressed that she decided to hire you on the spot. She has told you to do the following:
Colored Journal Entries from steps 2, 5, and 8 of the accounting cycle
Colored Ledger Accounts (T-Accounts) from steps 3, 5, and 8 of the accounting cycle
A Completed Worksheet in color for steps 4, 5, and 6 of the accounting cycle
Colored Financial Statements. This should include a statement of operations, a
statement of retained earnings, and a classified statement of financial position
A post-closing trial balance in color
Additional things to consider:
Only 1 T-Account needs to be created for each account. See Chart of Accounts.
Please Note: Laurie has been in business for a while, therefore, your Ledger
accounts (T-Accounts) may already have balances in them.
When doing journal entries, remember that debits come before credits and that both
must equal.
Remember, each time you post to the ledger account, you should put the reference
number in your general journal.
Assume the year is 2021 for your transactions and financial statements.
Round all numbers to the nearest dollar, if needed.
Do not procrastinate; it will only make things harder on you!!
Grading:
This is an individual project, however, you are always encouraged to work with a
friend. DO NOT simply copy your friends work, do your own work!!
This accounting cycle is worth a total of 100 points.
On Sunday, March 21st you will be required to turn in your project online in dropbox
y 11:30pm. Late Fees = you will lose 5 points per day until 20 days have passed,
then a grade of zero. For those of you who attend class, you are allowed to turn it in in-
person instead of online (for Monday class = March 22nd; for Wednesday class = March
24th) with no penalty from your grade.
Failure to use color could cost you up to 15 points.
The accounting cycle should be organized in the same order that the first accounting
cycle was. Failure to organize co
ectly will cost you up to 10 points.
Ledger # Account September 30th Balance
101 Cash 55,213$
102 Accounts Receivable 192$
103 Supplies 743$
104 Prepaid Insurance 1,842$
105 Land 33,355$
106 Building 106,320$
107 Accum. Depr. - Building 3,180$
108 Equipment -$
109 Accum. Depr. - Equipment -$
201 Accounts Payable -$
202 Notes Payable -$
203 Salaries Payable -$
204 Interest Payable -$
205 Income Tax Payable -$
301 Common Stock 123,123$
302 Retained Earnings 71,362$
303 Dividends -$
401 Laundromat Revenues -$
501 Advertising Expense -$
502 Depr. Expense - Building -$
503 Depr. Expense - Equipment -$
504 Income Tax Expense -$
505 Insurance Expense -$
506 Interest Expense -$
507 Salaries Expense -$
508 Supplies Expense -$
EXPENSES
Create a T-Account for all accounts listed below. Don't forget to put them in color!!!
Loving Laurie's Laundry Corporation
Chart of Accounts
ASSETS
LIABILITIES
OWNER'S EQUITY
REVENUES
Loving Laurie’s Laundry Transactions
1. On October 1, Loving Laurie decided to replace her washers and dryers. At the end of last
month, she sold off all of her equipment. Many of the machines were
eaking down and she
was getting tired of customer complaints. She purchased 67 washers and 64 dryers from
Barney’s Bargain Barn. Each washer cost $1,105 and each dryer cost $888. She made a down
payment of $23,456 and put the remaining balance on account. All account balances must be
fully paid within 2 months. The washers and dryers have an expected life 6 years, a salvage
value of $11,563, and will be fully depreciated using the straight-line method.
2. On October 2, Loving Laurie noticed she needed some extra supplies. She purchased $2,353
worth of supplies from Danny’s Discount Depot paying cash.
3. On October 4, Loving Laurie shovel’s in the revenues…literally!! She empties all of her
quarters, dimes, and nickels from the washers and dryers into buckets. She loves counting coins
and counted a total of 11,081 quarters, 3,948 dimes, 2,644 nickels, and 1,375 pennies!!
4. On October 6, Loving Laurie decided to buy the land next to her business since it was so cheap.
She paid $17,155 for the land. She plans on using the land for additional parking space during
peak washing times!
5. On October 7, Loving Laurie received cash from some of her clients who had put their washing
and drying fees on account last month. She received a total of $177 from her customers.
6. On October 10, Loving Laurie hires Joyful Jenny. She thought she would be great for business
since she is full of joy!! Her duties will include assisting customers and cleaning the machines.
It is expected that she will work 28 hours this month at a rate of $9.25 an hour.
7. On October 13, Loving Laurie empties her machines and counts her coins. She counted 10,738
quarters, 4,441 dimes, and 2,108 nickels. Laurie also allows some of her customers to pay later if
they like. She uses her magic key to start the machines for these particular customers. All
customers must pay their balance owed within 30 days. Laurie needs to recognize additional
evenues of $444 on account. (Note: All of this information can be recognized in a single
transaction).
8. On October 16, Loving Laurie contacted Loan Shark Sally about obtaining a loan. Barney’s
Bargain Barn needed $44,400 of the balance due from Laurie. Therefore, Laurie got a loan from
Sally in the amount of $44,400 to pay off some of her balance. The loan will be paid off in 6
equal installments due April 16th and October 16th for each of the next 3 years. Sally will charge
36% interest on the loan. Interest will be paid with each installment. (Note: there are two
transactions occu
ing here, first recognize the loan and then pay your liability).
9. On October 17, Loving Laurie paid Awesome Ad’s $692 for flyers to hang around town. The
flyers contain information about Laurie’s new machines and are expected to increase her
evenues by a whopping 50.77% within a year. Laurie expenses this immediately.
10. On October 19, Loving Laurie decided to pay dividends of $2,222 to stockholders.
11. On October 20, Loving Laurie empties her machines. She counted a total of $2,888 in coins!
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