Comp 111

Computer-Based Information System in Business

PROBLEM 02-S
Accounting Cycle of a Service Business and Bank Reconciliation

The operating procedures introduced in this chapter will be used in this computer problem. To complete the
problem, follow the step-by-step instructions provided. Each step lists a task to be completed at the computer.
The transactions for Marlow Consulting occurred during the period of November 1 through November 30 of the
current year.

1. Start Integrated Accounting 4e.

2. Open the file named IA4 Problem 02-S.
3. Enter your name in the User Name text box.
4. Save the file to your disk and folder with a file name of 02-S Your Name.
5. Enter the additions to the chart of account.
Add Repair & Maintenance to the chart of accounts. Assign account number 5185 for Repair & Maintenance so that it
will be positioned immediately following Insurance Expense.
Add Dues & Subscriptions to the chart of accounts. Assign account number 5195 to Dues & Subscriptions so that it will
be positioned following Advertising Expense.
6. Enter the general journal transactions:
General Journal Transactions
Nov.01 Paid cash for month’s rent, ₱1,500.00; Check No. 3815.
01 Paid cash for monthly telephone bill; ₱264.97; Check No. 3816.
02 Purchase supplies on account, ₱128.50; Invoice No. 2509
02 Received cash on account, ₱2,000.00; Sales Invoice No. 5328.
03 Paid cash for charitable contribution, ₱75.00; Check No. 3817.
03 Paid cash on account for supplies, ₱95.40; Check No. 3818.
03 Purchased supplies on account, ₱307.25; Invoice No. 2510.
06 Paid cash for mileage reimbursement, ₱335.78; Check No. 3819. Charge to Automobile Expense.
06 Purchased computer repair services on account, ₱395.00; Invoice No. 2511.
07 Paid cash for travel expenses, ₱265.90; Check No. 3820.
07 Purchased office equipment on account, ₱225.00 Invoice No. 2512.
09 Billed client for services rendered, ₱2,500.00; Invoice No. 5432.
09 Received cash on account, ₱810.15; Sales Invoice No. 5430.
13 Billed client for services rendered, ₱3,250.00; Invoice No. 5433.
14 Purchased advertising on account, ₱500.00; Invoice No. 2513.
14 Paid cash for flowers, ₱42.62; Check No. 3821. Charge to Miscellaneous Expense.
17 Purchases a newsletter subscription on account, ₱150.00; Invoice No. 2514.
20 Billed client for services rendered, ₱3,750.00; Invoice No. 5434,
22 Paid cash for fire and theft insurance, ₱325.00; Check No. 3822.
27 Paid cash on account, ₱487.63; Check No. 3823.
27 Paid cash on account, ₱795.66; Check No. 3824.
28 Received cash on account, ₱2,500.00; Sales Invoice No. 5432.
28 Received cash on account, ₱2,850.00; Sales Invoice No. 5431.
30 Paid cash on account, ₱306.78; Check No. 3825.
30 Paid cash on account, ₱307.25; Check No. 3826.
30 Received cash on account, ₱3,500.00; Sales Invoice No. 5429.
30 Paid monthly salaries, ₱2,054.38; Check No. 3827.
30 Owner withdrew cash for personal use, ₱3,500.00; Check No. 3828.

7. Display the chart of accounts.

8. Display the general journal report.
From the Reports button, choose the Journals option and the General Journal report, then click OK. When the Journal
Report Selection window appears, choose the Customize Journal report option. Set the Start Date to 11/01/17 and the
End Date to 11/30/17. Then click OK.
9. Use the auditor and error correction feature of the software to correct the following error:
It was discovered that Sales Invoice number 5429, on November 30, was recorded as ₱100.00 less than the actual
amount of cash received.
a. Click on the Explore toolbar button.
b. When the Explore Accounting System window appears, click on the Plus box preceding Chart of Accounts.
c. When the list of accounts appears in the left window pane, click on Accounts Receivable.
d. In the right window pane, make a note of the amount of the incorrect credit to account receivable for the sales
invoice number 5429 on November 30, then exit the Explore window.
 e. Click the Journal toolbar button and return to the general journal.
f. Find the incorrect journal entry, key the correct amount into both parts of the entry (the noted amount plus
₱100.00), and post the corrected journal entry.
10. Display a corrected general journal report for the month of November.
11. Display a trial balance.
Choose Ledger Reports in the Report Selection window, select Trial Balance, and click OK.
12. Enter the adjustment data for the month of November for Marlow Consulting:
Click Journal on the toolbar, click the General Journal tab, and enter the adjusting entries.
Insurance expired during November ₱ 75.00
Inventory of supplies on November 976.50
Depreciation on office equipment for November 410.17
13. Display the adjusting entries.
Click Reports on the toolbar. When the Reports Selection dialog box appears, choose the Journals option button, select
the General Journal Report option, and enter a Reference restriction of Adj. Ent. so that only the adjusting entries are
reported.
Note: When the A in Adj. Ent. is entered, the computer searches the drop-down list, finds the matching reference, and
places it in the Reference text box.
14. Display the income statement.
Choose the Financial Statements option button from the Report Selection dialog box, select the Income Statement
report, and click OK.
15. Display the Yearly Consulting Fees account detail from the income statement.
Click on the Yearly Amount of Consulting Fees (₱109,882.73), then click Show Detail.
16. Display the balance sheet.
17. Display the Cash account detail from the balance sheet.
Click on the Cash amount (₱7,808.71), then click Show Detail.
18. Display the statement of owner’s equity.
19. Generate a 3-D expense distribution graph.
20. Process the following bank reconciliation data:
Checkbook balance ₱ 7,808.71
Bank credit 253.14
Bank charge 15.50
Balance shown on bank statement 6,548.05
Outstanding deposits as follows:
₱2,500.00
₱2,850.00
₱3,600.00
Outstanding checks as follows:
Check No. Amount
3823 ₱ 487.63
3824 795.66
3825 306.78
3826 307.25
3827 2,054.38
3828 3,500.00
21. Display the bank reconciliation report.
22. Check your work.
23. Save the data file.