ACCT 2220 Lecture : Journal-entry
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Read the Interview for the Miss Peach Project below and write asystems requirement checklist with these five general catagories:Outputs, Inputs, Processes, Performance and controls.
In a prior interview, Miss Peach provided the informationsummarized below. She has also provided associated documentationshe thought might be helpful.
Payroll
Currently Miss Peach pays her students $3 each Monday usingpaper money for doing their assigned chores during the week. Shethen charges them $1 for rent on their desks. She also pays bonusesfor bringing in homework (about $8 a week) and for good behavior($1 a day).
This works pretty well as far as it goes, but Miss Peach wouldlike to model real life even more. With the new system, thestudents' pay would be posted to their bank accounts. In order forthe tax tables to work, Miss Peach will have to increase the weeklysalaries to about $150. Each week the students would receive anearnings statement that would list their gross pay (broken down bysalary, bonuses, and hourly pay), their current deductions (Federalincome tax, Social Security tax, Medicare tax, and Michigan stateincome tax), and their net pay deposited into their bank account.The rent for their desks would be inflated to $25 and would be anautomatic deduction from the students' weekly pay. There would alsobe a column indicating the year-to-date values.
Although Miss Peach currently does not pay an hourly wage, shewould like the option to do so at a later time.
Miss Peach has included a copy of her weekly earnings statementto be used as a model.
Earnings Statement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kelly Elementary School 5150 Riverside Drive Marshall, MI 49068 | Period Ending:9/24/2004 Pay Date: 9/24/2004 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxable Marital Status: Single Exemptions/Allowances: Federal: 1 State: 1 | Pamela Peach 135 Grove Street Marshall, MI 49068 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Store Currently Miss Peach opens the class store Monday, right afterpayday. She runs the store herself, but would like the new systemto support students running the store. She keeps the inventorystocked fairly well considering her limited time and resources. Shemostly uses standard school supplies (see list below), although shesometimes supplements the inventory with stickers and craftsupplies from her own pocket or items donated by parents. Currentlyno records are kept. Although very popular with the students, Miss Peach finds thecurrent system way too chaotic. Her main goal is to use thecomputer to make it possible for the students to run the storethemselves. Shifting the responsibility for running the store toher students would make it into a learning experience for them. Italso would make it possible to open the store anytime a student isfinished with his or her regular activities. General supplies include pencils, pens, crayons, markers, chalk,white paper, lined paper, notebooks, colored paper, tissue paper,construction paper, rulers, scissors, glue sticks, tape, brassfasteners, envelopes, paint, pipe cleaners, glue, and popsiclesticks. Donated supplies include books, arts and craft materials (leftover cloth and yarn, toilet paper rolls, bottle caps), and sciencematerials (plastic yogurt containers, seeds, potting soil). Miss Peach has included a copy of the paper receipt currentlybeing used in the school store to be used as a model. |
4th Grade StoreKelly Elementary School 5150Riverside Drive Marshall, MI 49068
Customer: ID Date:
Receipt
Qty | ID | Description | Each | Total |
Subtotal | ||||
Tax (6%) | ||||
Debit Total |
Signature:
Bank
Currently Miss Peach acts as the bank. All transactions are inpaper money and the only records are related to the normal gradingactivities of homework and behavior. She would like the new systemto allow students to have access to their bank accounts through anATM machine.
Through the ATM the students should be able to change theirpasswords, check their current balances, transfer funds between thechecking and savings accounts, and see or print listings of alltransactions for a period of time. Money in the savings accountshould accrue interest.
Miss Peach has included a copy of her bank checking and savingsaccount transaction histories to be used as a model.
Teachers Credit Union |
Checking Account History
Hurricane Inc. purchased a portfolio of available-for-sale securities in 2016, its first year of operations. The cost and fair value of this portfolio on December 31, 2016, was as follows:
1 | Name | Number of Shares | Total Cost | Total Fair Value |
2 | Tornado Inc. | 830.00 | $14,857.00 | $16,185.00 |
3 | Tsunami Corp. | 1,230.00 | 31,488.00 | 34,809.00 |
4 | Typhoon Corp. | 2,170.00 | 44,268.00 | 43,834.00 |
5 | Total | $90,613.00 | $94,828.00 |
On June 12, 2017, Hurricane purchased 1,400 shares of Rogue Wave Inc. at $50 per share plus a $80 brokerage commission.
Required:
A. | Provide the journal entries to record the following (refer to the Chart of Accounts for exact wording of account titles and be sure to enter the year as part of the date):
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B. | How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities? |
Chart of Accounts
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hurricane Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Journal
Shaded cells have feedback.
A. Provide the journal entries. Refer to the Chart of Accounts for exact wording of account titles. Be sure to enter the year as part of the date.
How does grading work?
PAGE 10
JOURNAL
Score: 33/51
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
---|---|---|---|---|---|
1 | ? | ? | |||
2 | ? | ||||
3 | ? | ? | |||
4 | ? |
Points:
6.47 / 10
Feedback
Check My Work
1. The gain or loss is the difference between the portfolio cost and its fair value. The offset account for the gain or loss entry is the valuation allowance account.
2. Increase the investment and decrease Cash for the purchase price (Shares x Per share amount) plus brokerage fee.
Final Question
Shaded cells have feedback.
B. How are unrealized gains and losses treated differently for available-for-sale securities than for trading securities?
Unrealized gains and losses for available-for-sale securities are accumulated over time and reported as a credit (positive) or debit (negative) balance in the Stockholdersâ Equity section. As a result, the changes in fair valueare not reflected on the income statement, as is the case with trading securities. Bypassing the income statement issupported on the grounds that available-for-sale securities will be held for alonger time than trading securities; thus, fluctuations in market prices havea greater opportunity to âcancel outâ over time.
Points:
5 / 5