Download Principles of Accounting I

Galilee College
Principles of Accounting 1
Course No. ACC 111
Galilee Corporate Centre • Joe Farrington Road
P.O. Box EE 16507 - Nassau, Bahamas –
Tel. (242)364-1776 Fax (242)364-1778
Email: [email protected]
www.gcollege.org
TABLE OF CONTENTS
ABOUT THE ACCOUNTING LECTURER
ACCOUNTING PRINCIPLES I SYLLABUS
Chapter 1: Accounting and the Business Environment
Chapter 2: Recording Business Transactions
Chapter 3: Measuring Business Income: the Adjusting Process
Chapter 4: Completing the Accounting Cycle
Chapter 5: Merchandising Operations and the Accounting Cycle
Chapter 6: Accounting Information Systems: Special Journals, Control Account, and Subsidiary
Ledgers
Chapter 7: Internal Control, Managing Cash, and Making Ethical Judgments
Chapter 8: Accounts and Notes Receivable
Chapter 9: Merchandise Inventory
Chapter 10: Plant Assets and Intangible Assets
Chapter 11: Current Liabilities and Payroll
Appendix 1: Accounting Terms
Appendix 2: Associate Degree Program (Accounting)
Appendix 3: Bachelor’s Degree in Accounting
Appendix 4: Accounting Courses Description
Appendix 5: Accounting News
Supplies Needed
• Current Accounting Principles Text
• Calculator
• Note Book/Pencil/Pen
• Ten columnar pad (three students can combine to reduce the cost)
• Four columnar pad (three students can combine to reduce the cost)
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ABOUT THE ACCOUNTING LECTURER
Dr. Willis L. Leon Johnson, CPA
Dr. Willis L. Johnson is a Chartered Accountant and a renowned veteran
educator. For the past five years he has been directing the Galilee CPA Review
program. Dr. Johnson has nurtured scores of Certified Public Accountants in the
Bahamas.
He received his early education at Sandilands Primary School and R.M. Bailey
Senior High School, Nassau, Bahamas. Having an earnest quest for knowledge,
Dr. Willis Johnson, pursued studies in Accounting at Brewster Adult Technical Institute and
Tampa College in Tampa Florida. He further went on to Tiffin Ohio, where he enrolled at Tiffin
University. At the completion of his study tenure at Tiffin University, he became the first
student in the School’s history to simultaneously earn three Bachelor of Arts Degrees.
Additionally, he has acquired a Master of Business Administration degree, a Master of Theology
degree and a Doctorate degree in Philosophy.
Dr. Johnson’s vocational background showcases a tenure at Coopers and Lybrand Accounting
Firm where he served as a Staff Accountant. Following his departure from Coopers and Lybrand
he served as the Chief Accountant at Blanco Chemicals. Dr. Johnson was climbing higher, after
serving Blanco Chemicals for five years, he moved on to Bahamas Telecommunications
Corporation where he was appointed Cost and Budget Accountant. At Batelco he moved
through the ranks of Accountant to Manager, then Senior Manager and finally Executive
Manager. Dr. Johnson retired in 1999 and took on full-time oversight of the Galilee Education
System which comprises of Galilee Academy, Galilee College and Galilee CPA Review and
Galilee Professional Institute. In 2005, Dr. Johnson established the Bahamas Association of
Christian Counselors.
Dr. Johnson passed the Certified Public Accountant’s Exam in 1986 and become a member of
the Colorado Society of Accountants, Colorado State Board of Accountancy and the American
Institute of Certified Public Accountants. He became a member of The Bahamas Institute of
Chartered Accountants in 1989, and has subsequently served on the executive committee as;
Chairman of the Continuing Education Committee, Treasurer and Second Vice President. Dr.
Johnson is also a member of the American Academy of Financial Management where he serves
on the Board of and The American Institute of Certified Public Accountants. Dr. Johnson is a
Master Financial Professional and serves on Global Board of Academic Advisors and Professors
of the American Academy of Financial Management . Dr. Johnson is also a Certified Marriage
and Family Counselor. He currently serves an the treasurer for the Association of Tertiary
Institutions of the Bahamas.
Called to the gospel ministry, Dr. Johnson is an ordained Minister. He is the founding Pastor of
Galilee Ministries International, a locally mission based entity that is designed to bringing relief
to persons who are bereft of precious commodities such as food, clothing, shelter and education.
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For the past five years he has been engaged in directing the Galilee CPA Review program. He is
known for his profound academic theatrics as he delivers the CPA curriculum.
His success rate is phenomenal and measures alongside in the region. Dr. Johnson was the guest
of the AICPA and NASBA at a joint meeting in New York, New York on December 15, 2003 as
they announced the final changes to the new computer-based CPA exam. During this joint
meeting in New York, Dr. Johnson played an integral part in the discussions, as well as, other
prominent Review providers, such as Dr. Irvin Gleim, and Dr. Jim Rigos. The AICPA invited
him again to attend the joint meeting and follow-up session on December 6, 2004 in Jersey City,
New Jersey. During that session, Dr. Johnson advocated for the AICPA to consider its Prometric
testing outside the of the U.S. such as the Bahamas. A committee has been appointed to present
a paper on this possibility.
Dr. Johnson is married to the former Yvette M. Bethell. The couple has five children, Jeremiah,
Joshua, Joel, Jude and Jamés.
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Galilee College
Course Outline
COURSE NUMBER:
ACC 111
COURSE TITLE:
Principles of Accounting I
DEPARTMENT: Accounting
CREDIT VALUE: 3.0
COURSE DURATION: 1 SEMESTER
DATE PREPARED: July 2006
PREREQUISITES
None
REQUIRED TEXTS:
Accounting Principles I, Willis L. Johnson
SUPPLEMENTAL MATERIALS
Ledger forms, columnar pads, journal forms, etc.,
COURSE DESCRIPTION
A study of the conceptual framework which explains financial accounting with an emphasis
on the business and economic information generated in the accounting process. Students
are encouraged to understand the increasing prominence of accounting in virtually all
aspects of business activity.
COURSE OBJECTIVE
The primary objective of this course is to provide a strong foundation for future courses in
business administration by introducing the accounting principles, concepts, procedures, and
techniques underlying financial accounting and reporting with emphasis on business and
economic information generated in the accounting process, and by encouraging an
awareness of the prominence of accounting in virtually all aspects of business activity. A
secondary objective is to initiate course work leading to a major and career in accounting.
Program Context:
This course is a first year core component of all Accounting and Business and Public Administration
Programs
Course Learning Outcomes:
Learning outcomes identify the knowledge, skills and attitudes that successful students will have
developed and reliably demonstrated as a result of the learning experiences and evaluations
during this course.
Evaluation Strategies and Grading:
Class Attendance
Full participation and attendance is expected for this course. Students who miss a class are
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responsible for any information discussed, assigned or distributed in that class period.
Final Project
Home Work
Quiz/Exams
50%
30%
40%
100%
Note that violation of academic honesty can affect the course grade. "Cheating" on an exam
(i.e., the giving or receiving of aid) will result in a course grade of "F."
Note that classroom behavior (for example, talking to other students during lecture) can
negatively affect course grades by as much as three letter grades, e.g., an "A" can become
a "D."
GRADING SYSTEM:
A 94% 100% Excellent
B 87% 93%
Good
C 75% 86%
Average
4.00
3.00
2.00
D 68% - 74% Passed 1.00
F 0% - 67% Failed 0.00
COVERAGE
ABOUT THE ACCOUNTING LECTURER
ACCOUNTING PRINCIPLES I SYLLABUS
Chapter 1: Accounting and the Business Environment
Chapter 2: Recording Business Transactions
Chapter 3: Measuring Business Income: the Adjusting Process
Chapter 4: Completing the Accounting Cycle
Chapter 5: Merchandising Operations and the Accounting Cycle
Chapter 6: Accounting Information Systems: Special Journals, Control Account, and Subsidiary
Ledgers
Chapter 7: Internal Control, Managing Cash, and Making Ethical Judgments
Chapter 8: Accounts and Notes Receivable
Chapter 9: Merchandise Inventory
Chapter 10: Plant Assets and Intangible Assets
Chapter 11: Current Liabilities and Payroll
Appendix 1: Accounting Terms
Appendix 2: Associate Degree Program (Accounting)
Appendix 3: Bachelor’s Degree in Accounting
Appendix 4: Accounting Courses Description
Appendix 5: Accounting News
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Chapter 1: Accounting and the Business Environment
Introduction to Accounting
Accounting can be defined as an information system which identifies, records, and
communicates financial information to decision makers. Decision makers can be
divided into two broad categories: external and internal. In financial accounting we are
concerned with external decision makers such as business owners, potential owners,
creditors, etc.
There are various branches of accounting such as financial, managerial (accounting for
internal decision makers), tax, auditing, cost, and so forth. The importance of
accounting is that it is the language of business and a basic understanding of it is
necessary for almost any job in the business world.
Bookkeeping should be distinguished from accounting. Bookkeeping refers to the
recording of business transactions which is one part of accounting. The term
accounting refers to the entire process of identifying, processing, and communicating
economic events to decision makers.
At the outset of our study of accounting, we want to emphasize the importance of
business ethics. We'll shortly see that one of the important responsibilities of the
accountant is to evaluate business performance. Accountants compute net income,
cost resources owned by the business, determine cash flows, etc. If decision makers
can't have confidence in the financial reports prepared by accountants, then our entire
economic system is subject to collapse. As the authors note, fortunately most
individuals in business are ethical.
As you know, there are various kinds of enterprises such as for-profit, non-profit,
government, etc. In our study of accounting we will concentrate on for-profit businesses
which operate as corporations. We will touch on other forms of business structure
including sole proprietorships (single owner business) and partnerships (two or more
individuals co-own the business) but our emphasis will be on accounting for
corporations. A corporation can be defined as a legal entity organized under state law
and having ownership divided into transferable shares of stock.
Financial accounting is governed by rules or guidelines called Generally Accepted
Accounting Principles (GAAP). As we begin to study accounting we will gradually
introduce these principles and concepts. Two basic principles and concepts are:
1.
Economic Entity Concept: An accounting entity is a separate and distinct
unit, standing apart from its owners or shareholders.
2.
Monetary Unit Concept: Only business transactions that can be
expressed in terms of money are included in accounting records and no
adjustment is made for inflation.
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Two agencies have primary responsibility for establishing generally accepted
accounting principles. The primary agency is a private organization, the Financial
Accounting Standards Board (FASB), which issues Statements of Financial Standards.
The second agency is a government organization, the Securities and Exchange
Commission.
A basic tool used by accountants to explain business transactions is the accounting
equation. It can be expressed variously as:
Resources = Equities
Assets
= Liabilities and Owner's Equity
Assets
= Liabilities and Stockholders' Equity
Stockholders' Equity consists of two parts: Paid In Capital (investment by owners) and
Retained Earnings (net income accumulated over the life of the corporation less any
dividends paid). Brief definitions of other terms in the accounting equation are as
follows:
Assets
Economic resources owned by the
organization
Liabilities
Debts owned to third parties
Owner's Equity
Owner's interest in net assets
Stockholders' Equity
Shareholders' interest in net assets
Net assets
Assets - Liabilities
All business transactions can be expressed in terms of the accounting equation and it is
important to gain some mastery over describing business transactions in terms of the
accounting equation.
An account is a summary device used by accountants to describe changes in assets,
liabilities, and stockholders' equity. Note that there are various kinds of asset accounts
such as cash, land, accounts receivable, etc. Also there are various kinds of liability
accounts such as accounts payable, taxes payable, etc. For our purposes now there
are just two categories of owner’s equity accounts: (Capital) Paid In Capital and
Retained Earnings. Note that revenue increases retained earnings and expenses
decrease retained earnings. Finally, note that dividends (distribution of earnings and
profits to stockholders) decrease retained earnings.
Please carefully review the ten business transactions analyzed using the accounting
equation. Note that the accounting must balance (A = L + OE) after each transaction.
The end product of the accounting process is the production of financial statements
which describe in some detail how the business organization is performing. The four
basic financial statements required by GAAP are:
Income Statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
8
Please take some time to review examples of these financial statements, their
headings, time period covered, format, accounts included in each financial statement,
and the interrelationship of financial statements.
The "expert" in financial accounting is the Certified Public Accountant. The CPA Exam
consists of the following four parts:
Auditing and Attestation
Financial Accounting and Reporting
Regulation
Business Environment and Concepts
Since many people rely on accounting information it is important that accountants
maintain the highest ethical standards. As we discuss various topics we will consider
the ethical aspect of the actions we take.
The Accounting Equation
The assets of a business belong to the resource providers who are said to have claims on the assets.
In other words, every asset has its own source provided by an owner or a creditor. Therefore, there
may not be any claim without an appropriate asset or vice versa. The accounting equation is:
Assets = Claims
Claims in their turn are divided into two categories: owners' claims (equity) and creditors' claims
(liabilities):
Assets =
_ Claims
Liabilities + Equity
Algebraically, the amount of total assets minus total liabilities equals equity. Because equity is
equal to the net difference between assets and liabilities, it is also called net assets.
9
For example, suppose Our Company has assets of $800, liabilities of $300, and equity of $500.
These amounts appear in the accounting equation:
Claims
Assets = Liabilities + Equity
$800 =
$300
+ $500
Now, let's see how the elements of accounting equation change during an operating cycle. We will
have a few events and will follow the changes in the accounting equation.
1) Friend Company is created when their owners invest $5,000 into the business. The effects of
the acquisition on the accounting equation are as follows:
Assets =
$5,000 =
__
Claims
__
__Liabilities + Equity
0
+ $5,000
Note that this single transaction is recorded twice, once as an asset and a second time as the
source of that asset (equity). Every transaction is recorded at least twice. This process is known as
double-entry bookkeeping. Since this transaction provided assets to the entity, the transaction will
be called an asset source transaction. Asset source transactions increase both an asset account and
one of the claims accounts.
10
Chapter 1 Exercises
Chapter 1 Homework Problem
11
Chapter 2: Recording Business Transactions
12
13
14
15
Chapter 2 Class Exercise
Instructions:
i.
ii.
iii.
Analyze the transactions and do the following:Post to T Accounts
Prepare a Chart of Account
Record in the General Journal
Shell Shelly Company For June 2006
Transactions (dates)
1. Received Cash from owner as an investment, $8,000
2. Paid for insurance, $600
3. Bought supplies on account from Swan’s Supply Company, $200
4. Bought supplies on account from York Company, $500
5. Returned Merchandise to Swan’s Supply Company $50
6. Paid cash on account to Swan’s Company, $50
7. Bought Equipment for Cash $1,000
8. Sold merchandise on account to Evans Company, $1,000
9. Paid cash for rent, $400
10. Paid cash for advertisement, $75
11. Paid Salaries $600
12. Paid cash on account to York Company, $300.00
13. Sold merchandise for cash $1,200
14. Shell Shelly withdrew $300
16
Chapter 2 Home Work Exercise
Jack Jacky, For April 2006
Analyze the transactions and do the following:1. Post to T Accounts
2. Prepare a Chart of Account
3. Record in the General Journal
4. Post to the General Ledger
5. Prepare a Trial Balance
6. Prepare a Six Column Worksheet
7. Prepare an Income Statement
8. Prepare a Capital Statement
9. Prepare a Balance Sheet
10. Prepare Closing Entries
11. Prepare a Post-closing Trial Balance
Transactions (dates)
1. Received cash from owner as an investment, $6000
2. Bought supplies on account from Helfrey Company, $900
3. Paid cash for insurance, $150
4. Sold merchandise for cash $1,300
5. Bought Equipment for Cash $1,100
6. Paid cash for supplies, $50
7. Paid cash on account to Helfrey Company, $300
8. Sold merchandise on account to Susan Company, $2000
9. Paid cash for rent, $300
10. Returned Merchandise to Helfrey Company $200
11. Paid cash for advertisement, $100
12. Susan Company returned merchandise $500
13. Salaries, $500
14. Jack Jacky Withdrew $200
Instructions:
Analyze the transactions and do the following:1. Post to T Accounts
2. Prepare a Chart of Account
3. Record in the General Journal
4. Post to the General Ledger
5. Prepare a Trial Balance
6. Prepare a Six Column Worksheet
7. Prepare an Income Statement
8. Prepare a Capital Statement
9. Prepare a Balance Sheet
10. Prepare Closing Entries
11. Prepare a Post-closing Trial Balance
17
Chapter 2 Forms
T Accounts
Chart of Accounts
18
General Journal
General Ledger
Trial Balance
19
Six Column Worksheet
Financial Statements
20
Closing Entries
21
Post-Closing Balance
22
Chapter 3: Measuring Business Income: the Adjusting Process
23
24
Chapter 3 - Accruals and Deferrals: Class Exercise 1
1. On January 1, 2004 PEN PENNY received a Utility Bill from BEC for $10,000, the bill was due on
February 28, 2004. (a) Show the entries on January 1, 2004 and February 28, 2004.
2. On March 1, 2004 PEN PENNY company borrowed $400,000 from the Royal Bank of Canada and
issued a notes payable to pay interest at the rate of 6% at the end of each quarter.
a. Show the entry to record the amount borrowed, and the interest expense for March 31st.
3. On August 1, 2004 PEN PENNY company received rent of $30,000 from a tenant for three months
rent.
a. Show the entries on August 1, 2004 and August 31, 2004
4. On July 1, 2004 PEN PENNY Company Paid its insurance for two years $24,000.
a. Show the entries on July 1, 2004 and December 31, 2004
5. On October 1, 2004 PEN PENNY earned royalty of $20,000 but did not receive the amount until
February 3, 2005.
a. Show the entries on October 1, 2004 and February 3, 2005.
Accruals and Deferrals: Home Work Exercise 1
6. On October 3, 2004 TED TEDDY received a Telephone Bill from BTC for $15,000, the bill was due
on November 1, 2004. (a) Show the entries on October 3, 2004 and November 1, 2004.
7. On February 1, 2002 TED TEDDY company borrowed $100,000 from the Bank of Nova Scotia and
issued a notes payable to pay interest at the rate of 5% at the end of each quarter.
a. Show the entry to record the amount borrowed, and the interest expense for February 1st.
8. On March 1, 2003 TED TEDDY company received rent of $45,000 from a tenant for five months
rent.
a. Show the entries on March 1, 2003 and March 31, 2003.
9. On January 1, 2004 TED TEDDY company Paid its insurance for three years $36,000.
a. Show the entries on January 1, 2004 and December 31, 2004
10. On November 1, 2004 TED TEDDY earned royalty of $50,000 and received $25,000 on December
31, 2004 and $25,000 on January 31, 2005.
a. Show the entries on November 1, 2004, December 31, 2004 and January 31, 2005.
Depreciation – Class Exercise 2
Milk Milky purchased a new computer on January 1, 2005 at a cost of $25,000. The computer
had a life of 4 years and salvage of $5,000.00. Using the straight-line method, record the
following:1. The purchase on January 1, 2005
2. The Depreciation for 2005
3. What is the book value of the computer at December 31, 2005 and December 31, 2006?
Depreciation – Home Work Exercise 2
Stuck Stucky purchased a new truck on July 1, 2005 at a cost of $20,000. The truck had a life
of 7 years and salvage of $6,000.00. Using the straight-line method, record the following:1. The purchase on July 1, 2005
2. The Depreciation for 2005
3. What is the book value of the truck at December 31, 2005, and December 31, 2006?
25
Chapter 4: Completing the Accounting Cycle
26
27
28
Class Exercise
29
Home Work Exercise
30
Chapter 5: Merchandising Operations and the Accounting Cycle
31
32
33
34
35
36
Class Exercise
Home Work Exercise
Class Exercise 1
Instructions:
1. Under both the perpetual and periodic inventory methods, record all transactions on Page 1 of a
General Journal.
Home Work Exercise 1
Use the information in Exercise 1.
1. Under both the perpetual and periodic inventory methods, record all transactions on Page 1 of a
General Journal.
Class Exercise 2
Use the information in Exercise 1.
1. If the purchase term was 5/10 N’30, what is the entry to record the purchase on January 4th on
account?
2. What is the entry if payment was made on January 13th
3. What is the entry if payment was made on January 25th
4. What is the entry if 30% of the January 20th purchase was returned due to defectiveness?
5. If the January 20th purchase excluded freight of $1,000 and duty of 35% of the total cost, what is
the entry to record all transactions.
a. USE T ACCOUNTS ALONG WITH THE GENERAL JOURNAL, PAGE 2
Home Work Exercise 2
Use the information in Exercise 1.
1. If the purchase term was 10/15 N’30, what is the entry to record the purchase on March 7th on
account?
2. What is the entry if payment was made on March 16th
3. What is the entry if payment was made on March 27th
4. What is the entry if 20% of the January 0th purchase was returned due to defectiveness?
5. If the March 11th purchase excluded freight of 5% on the invoice and duty of 40% of the total cost,
what is the entry to record all transactions.
a. USE T ACCOUNTS ALONG WITH THE GENERAL JOURNAL, PAGE 2
Class Exercise 3
Use the information in Exercise 1.
Assume that the sale on January 20th had credit terms of 5/15 N’30.
1. Record the sale on January 20th
2. On January 25th, customers returned 15% of the goods due to defective packaging. Record the
entry.
3. What is the entry if the customers paid for the goods on January 30th?
4. What is the entry if the customers paid for the goods on February 10th?
a. USE T ACCOUNTS ALONG WITH THE GENERAL JOURNAL, PAGE 3
37
Home Exercise 3
Use the information in Exercise 1.
Assume that the sale on March 15th had credit terms of 3/10 N’30.
5. Record the sale on March 15th.
6. On March 18th customers returned 30% of the goods due to defective packaging, but was allowed
a 25% credit due to its standing policy. Record the entry.
7. What is the entry if the customers paid for the goods on March 20th
8. What is the entry if the customers paid for the goods on March 27th
a. USE T ACCOUNTS ALONG WITH THE GENERAL JOURNAL, PAGE 3
38
Chapter 6: Accounting Information Systems: Special Journals,
Control Account, and Subsidiary Ledgers
39
40
41
42
Class Exercise
Special Journals – Class Exercise
Ken Kenny owns a bicycle and motorcycle store.
The Balances in the Accounts Receivables and Accounts Payable were as follows on November 1,
2005:Accounts Receivables
Loree Adams
$ 3,200
Victor Droste
$ 4,200
Wayne Ivory
$ 2,000
Robert Melvin
$ 1,000
Esther Lorand
$ 1,700
Celia Sotelo
$
500
Leonard Kane
$ 1,147
Jonathan Hunt
$
200
Accounts Payable
Visa Cycle
Delay Motor Cycles
Walden Supplies
Action Cycles
United Bicycle Co.
Baker Supply
Cycle World
$
$
$
$
$
$
$
3,000
2,600
120
2,200
1,000
150
1,650
Instructions:
1. Journalize the following transactions completed during November of the current year. Use page 18 of all
journals. A 6% sales tax has been added to each sale. Source documents are abbreviated as follows:
check, C; memorandum, M; purchase invoice, P; receipt, R; sales invoice, S; cash register tape, T.
2. Post the journals to the subsidiary ledgers and general ledgers
3. Prepare a Trial Balance
Nov 1. Ken Kenny invested $10,000 in the business, R 111
Nov 2. Paid cash for rent, $1,250.00. C244.
Nov 2. Ken Kenny, partner, withdrew cash for personal use, $600. C245.
Nov 2. Ken Kenny, partner, withdrew cash for personal use, $600. C246.
Nov 3. Paid cash for electric bill, $130.00 C247.
Nov 3. Purchased merchandise on account from Visa Cycle Co., $2,275.00. P58.
Nov 4. Paid cash on account to Delay Motorcycles, $1,360.00, covering P56. C248.
Nov 5. Sold merchandise on account to Loree Adams, $1,130.00 plus sales tax, $67.80; total, $1,197.80.
S61.
Nov 5. Paid cash for office supplies, $62.00. C249.
Nov 6. Purchased merchandise for cash, $165.00. C250.
Nov 7. Recorded cash and credit card sales, $5,850.00, plus sales tax, $351.00; total, $6,201.00. S62.
Nov 9. Sold merchandise on account to Victor Droste, $358.00, plus sales tax , $21.48; total, $379.48.
S62.
Nov 9. Received cash on account from Wayne Ivory, $1,775.50 covering S57. R112.
Nov 11. Bought office supplies on account from Walden Supply $68.00. M43.
Nov 12. Purchased merchandise for cash, $180.00. C251.
Nov 12. Received cash on account from Robert Melvin, $996.40, covering S58. R113.
Nov 13. Paid cash on account to Action Cycles, $1,365.00, covering P57. C252.
Nov 14. Ken Kenny, partner, withdrew merchandise for personal use, $3,850.00. M44.
Nov 14. Recorded cash and credit card sales, $2,680.00 plus sales tax, $160.80; total, $2,840.80. T14.
Nov 16. Ken Kenny, partner, withdrew, cash for personal use, $600.00. C253.
Nov 16. Ken Kenny, partner, withdrew cash for personal use, $600.00 C254.
43
Nov 17. Purchased merchandise on account from United Bicycle Co., $825.00. P59.
Nov 18. Purchased merchandise for cash, $196.00. C255.
Nov 18. Bought store supplies on account from Baker Supply, $92.00. M45.
Nov 19. Paid cash on account to Walden Supply, $68.00, covering M43. C256.
Nov 21. Recorded cash and credit card sales, $2,430.00, plus sales tax, $145.80; total , $2,575.80. T21.
Nov 23. Discovered that a payment of cash for advertising in October was journalized and posted in error
as a debit to Miscellaneous Expense instead of Advertising Expense, $125.00. M46.
Nov 23. Paid cash for office supplies, $44.00. C257.
Nov 23. Received cash on account from Esther Lorand, $630.70, covering S59. r114.
Nov 24. Sold merchandise on account to Celia Sotelo, $325.00, plus sales tax, $19.50; total $344.50 S63.
Nov 27. Purchased merchandise on account form Cycle World, $1,240.00. P60.
Nov 27. Paid cash for advertising, $85.00. C258.
Nov 28. Recorded cash and credit card sales, $2,680.00, plus sales tax, $160.80; total, $2,840.80. T28.
Nov 28. Received cash on account from Leonard Kane, $1,147.00, covering S60. R115.
Nov 30.Sold merchandise on account to Jonathan Hunt, $45.00, plus sales tax, $2.70; total, $47.70. S64.
Nov 30. Paid cash to replenish the petty cash fund, $301.00: office supplies, $62.00; store supplies $71.00;
advertising, $88.00; miscellaneous, $80.00. C259.
Nov 30.Recorded cash and credit card sales, $640.00, plus sales tax, $38.40; total, $678.40. T30.
44
45
Special Journal (Class Exercise - Completed Journal)
46
47
48
49
Special Journal (Home Work Exercise)
John Johnny owns a toy store.
The Balances in the Accounts Receivables and Accounts Payable were as follows on August 1, 2005:Accounts Receivables
Jacky Eve
$ 4,300
Moses Deals
$ 5,100
Kevin Blacks
$ 6,500
Rocky Grant
$ 1,600
Vashti Coleby
$ 2,300
Cynthia Pasto
$ 1,200
Francis Plum
$ 1,900
David Brown
$ 2,700
Accounts Payable
Master Rode
Faster Supplies Co.
United Supplies Co.
Quick Enterprises
UPS Co.
Chefte Company
Donnie Supply
$
$
$
$
$
$
$
4,500
3,300
1.220
5,690
2,940
3.750
2,880
Instructions:
1. Journalize the following transactions completed during August of the current year. Use page 6 of
all journals. A 7% sales tax has been added to each sale. Source documents are abbreviated as
follows: check, C; memorandum, M; purchase invoice, P; receipt, R; sales invoice, S; cash register
tape, T.
a. Note: You have to calculate all Sales Taxes (Sales times 7%)
2. Post transactions to all Subsidiary Ledger Accounts
3. Post to all General Ledger Accounts
4. Prepare a Trial Balance
5. Prepare a Schedule of Accounts Receivables & Accounts Payable
Aug 1. John Johnny invested $18,200 in the business, R 321
Aug 2. Paid cash for rent, $1,100.00. C415.
Aug 2. John Johnny, partner, withdrew cash for personal use, $900. C416.
Aug 3. Paid cash for Utility Bill, $790.00 C417.
Aug 3. Purchased merchandise on account from Master Rode Co., $3,380.00. P28.
Aug 4. Paid cash on account to Faster Supplies Co., $2,450.00, C418.
Aug 5. Sold merchandise on account to Jacky Eve, $1,000.00 plus sales tax, S31.
Aug 5. Paid cash for office supplies, $250.00. C419.
Aug 6. Purchased merchandise for cash, $160.00. C250.
Aug 7. Recorded cash and credit card sales, $5,850.00, plus sales tax, S32.
Aug 9. Sold merchandise on account to Moses Deals, $600.00, plus sales tax S32.
Aug 9. Received cash on account from Kevin Blacks, $2,100 R322.
Aug 11. Bought office supplies on account from United Supplies Co. $100. M13.
Aug 12. Purchased merchandise for cash, $310.00. C251.
Aug 12. Received cash on account from Rocky Grant, $1,310,. R323.
Aug 13. Paid cash on account to Quick Enterprises, $2100, C252.
Aug 14. John Johnny, withdrew merchandise for personal use, $2,350. M14.
Aug 14. Recorded cash and credit card sales, $2,680.00 plus sales tax, T14.
Aug 16. Paid on Account to Master Rode $300.00. C253.
Aug 16. John Johnny, withdrew cash for personal use, $200.00 C254.
Aug 17. Purchased merchandise on account from UPS Co., $1,000.00. P29.
50
Aug 18. Purchased merchandise for cash, $320.00. C255.
Aug 18. Bought store supplies on account from Chefte Company, $190.00. M15.
Aug 19. Paid cash on account to United Supplies Co., $210.00 C256.
Aug 21. Recorded cash and credit card sales, $3,900.00, plus sales tax T31.
Aug 23. Discovered that a payment of cash for advertising in October was journalized and posted in error
as a debit to Supplies Expense instead of Advertising Expense, $375.00. M16.
Aug 23. Paid cash for office supplies, $150.00. C257.
Aug 23. Received cash on account from Vashti Coleby, $920 R324.
Aug 24. Sold merchandise on account to Cynthia Pasto, $590 plus sales tax S33.
Aug 27. Purchased merchandise on account form Donnie Supply, $1,750 P60.
Aug 27. Paid cash for advertising, $120.00. C258.
Aug 28. Recorded cash and credit card sales, $4,000, plus sales tax, T38.
Aug 28. Received cash on account from Francis Plum, $1,890 R325.
Aug 30.Sold merchandise on account to David Brown, $210.00, plus sales tax, S34.
Aug 30. Paid cash to replenish the petty cash fund, $375.00: office supplies, $85.00; store supplies
$110; advertising, $120.00; miscellaneous, $60.00. C259.
Aug 30.Recorded cash and credit card sales, $1,500 plus sales tax, T30.
51
52
Special Journals Forms
53
54
55
Chapter 7: Internal Control, Managing Cash, and Making Ethical
Judgments
Steps in Performing a Bank Reconciliation:
Step 1: Identify outstanding deposits and bank errors that need to be added to the current bank
statement
balance.
Step 2: Identify outstanding checks and bank errors that need to be subtracted from the current
bank statement
balance.
Step 3: Identify amounts collected by the bank (notes), amounts added to our balance by the
bank (interest on
account), and any errors made by the company, when recording the transactions, that
need to be added
to the current book balance.
Step 4: Identify bank service charges, NSF checks, and any errors made by the company that
need to be subtracted
from the current book balance.
Bank Reconciliation format:
Journal entries must be done to record all adjustments made to the book balance. For all of the
adjustments made to increase the book balance cash will be shown as a debit in the entries. For
56
all of the adjustments made to decrease the book balance cash will be shown as a credit in the
entries.
Cash Short and Over:
Any differences between the cash register tape totals and the actual cash receipts is charged
against the cash short and over account.
If the ending balance of the account is a debit, it is shown on the Income Statement as a
Miscellaneous Expense.
If the ending balance of the account is a credit, it is shown on the Income Statement as Other
Revenue.
Journal Entries:
For a cash shortage:
Cash
Cash Short and Over
Sales Revenue
Actual cash received
Difference
Cash register tape totals
For a cash overage:
Cash
Actual cash received
Cash Short and Over
Sales Revenue
Difference
Cash register tape totals
Petty Cash:
Petty cash is a fund containing a small amount of cash that is used to pay for minor expenses.
The amount of the petty cash fund is dependent on how much a company feels it needs to have
on hand to pay for this expenses. The fund is replenished on a regular basis, normally at the end
of the month unless it is necessary to replenish it sooner. The amount of the fund may be
increased or decreased after it is setup, if necessary.
Journal Entries:
For the setup of Petty Cash:
The Petty Cash fund is established by transferring money from the Cash account to the Petty
57
Cash account for the amount of the fund. The size of the fund can always be readjusted at a later
time, either up or down depending on whether you wish to increase or decrease the fund.
Petty Cash
Cash in bank
Amount of fund
Amount of fund
To increase the fund, you would use the same entry as above and debit the Petty Cash and
credit Cash for just the amount of the increase. To decrease the fund, you would reverse the
above entry, by debiting Cash and Crediting Petty Cash for the amount of the decrease.
For replenishment of petty cash:
When the Petty Cash fund needs to be replenished, you would debit each individual expense
or asset account, not Petty Cash, for the amount spent on each one and credit Cash for the total.
Petty Cash is only used in the journal entries when you are either establishing the fund or
changing the size of the fund.
Office Supplies
Delivery Expense
Postage Expense
Misc. Expense
Cash in bank
Amount spent
Amount spent
Amount spent
Amount spent
Total of receipts
58
BANK RECONCILIATION - Class Exercise 1
Sam Sammy Corporation prepares monthly bank reconciliations of its checking account balance. The bank
statement for May, 2001 indicated the following:
Balance, May 31, 2001
$39,700
Service charge for May
80
Interest earned during May
120
NSF from Venus Corporation (deposited by Sam Sammy)
230
An analysis of canceled checks and deposits and the records of Sam Sammy revealed the following:
Checking account balance per Sam Sammy’s books
$40,140
Outstanding cheques as of May 31
2,950
Deposit in transit at May 31
3,110
Error in recording check; check written and cleared bank
for $399; recorded as $309; check used to pay for inventory
a.
Prepare a Bank Reconciliation Statement for Sam Sammy Corporation:-
Sam Sammy Corporation
Bank Reconciliation Statement
May 31, 2001
Balance Per Bank Statement
+ Deposits in transit
- Outstanding cheques
$
$
$
39,700
3,110
(2,950)
Adjusted Bank Balance
$
39,860
b.
Balance Per Books
+ Interest earned
- Bank Service Charge
- NSF check
- Bookkeeping error
Adjusted Book Balance
$ 40,140
$ 120
$ (80)
$ (230)
$ (90)
$
(280)
$ 39,860
Prepare the journal entries that Sam Sammy will need to make as a result of the bank reconciliation.
Each of the adjustments to the Cash balance per the books needs a journal entry (we need to change the
book balance in our ledger from the current balance of 40,140 to actual balance of 39860)
DR
120
Cash
Interest income
CR
120
DR
Bank serv charge expense 80
A/R, Venus Corp
230
Purchases (or Inventory) 90
Cash
CR
400
59
BANK RECONCILIATION
- Home Work 1
Luck Lucky Corporation prepares monthly bank reconciliations of its checking account balance. The bank
statement for June, 2004 indicated the following:
Balance, June 30, 2004
$59,350
Service charge for June
93
Interest earned during June
195
Bank Collection (not included on the books)
4.700
NSF from Capital Corporation (deposited by Luck Lucky)
990
NSF from Toledo Corporation (deposited by Luck Lucky)
3,002
An analysis of canceled checks and deposits and the records of Luck Lucky revealed the following:
Checking account balance per Luck Lucky’s books
$61,260
Outstanding cheque #118 dated June 29
3,500
Outstanding cheque #119 dated June 30
6,450
Deposit in transit dated June 29
4,350
Deposit in transit dated June 30
8,320
a.
b.
Prepare a Bank Reconciliation Statement for Luck Lucky Corporation:Prepare the journal entries that Luck Lucky will need to make as a result of the bank reconciliation.
Cash Short and Over – Class Exercise 2
On July 9, 2005 Stop Stoppy’s cash register tape indicated that the sales were $35,000 exluding
a refund of $3,000. The amount submitted by the sales was $30,000. Instruction: Record the
sales and cashed received by the head cashier.
Cash Short and Over – Home Work Exercise 2
On April 16, 2004 Pap Pappy’s cash register tape indicated that the sales were $27,000. This
includes a refund of $1,000. The amount submitted by the sales was $28,000. Instruction:
Record the sales and cashed received by the head cashier.
Petty Cash – Class Exercise 3
On January 1, 2004 Quip Quippy deposited $600 into the petty cash fund. During the month, the following
was used:Jan 1 Office Supplies
Jan 3 Motor Expenses
Jan 9 Stamps
Jan 15 Cleaning Supplies
$10.00
$12.00
$10.00
$15.00
Instructions:
1. Show the following entries on General Journal page 3:
a. January 1st deposit, b. The expenses for the month c.The amount to replenish the petty cash
fund on January 31, 2004.
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Petty Cash – Home Work Exercise 3
On June 1, 2004 Teach Teachy deposited $1,000 into the petty cash fund. During the month, the following
was used:June 2 Gasoline Expenses
June 3 Coffee Supplies
June 5 Cleaning Supplied
June 8 Gasoline Expenses
June 12 Office Supplies
June 15 Loan to A. Sacky
June 20 Gasoline Expenses
$15.00
$5.00
$8.00
$16.00
$15.00
$20.00
$12.00
Instructions:
1. Show the following entries on General Journal page 4:
a. January 1st deposit, b. The expenses for the month c.The amount to replenish the petty cash
fund on June 30, 2004.
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Chapter 8: Accounts and Notes Receivable
Receivables:
Accounts Receivable - amounts to be collected from customers for goods or services provided
Notes Receivable - a written promise for the future collection of cash
Accounting for Uncollectible Accounts:
Allowance Method: - recording collection losses on the basis of estimates. There are two
methods that
can be used to estimate the Uncollectible Accounts expense:
(1) Percent of Sales - referred to as the Income Statement approach because it computes the
uncollectible
accounts expense as a percentage of net credit sales.
Adjusting Entry:
Uncollectible Accounts Exp
Net credit sales * %
Allowance for D. A.
Net
credit sales * %
(2) Aging of Accounts Receivable - referred to as the Balance Sheet approach because
this method estimates bad debts by analyzing individual accounts receivables according to the
length of time that they are past due. Once separated by past due dates, each group is then
multiplied by the percentage that each group is estimated to be uncollectible (as shown in the
display below).
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Adjusting Entry:
Uncollectible Accounts Exp
Allowance for D.A
Desired End Bal. - Current Bal.
Desired End Bal. - Current Bal.
Writing off an Uncollectible Account:
Allowance for D.A.
Acct. Rec. - Customer name
Amount uncollectible
Amount uncollectible
Direct Write-off Method - accounts are written off when determined to be uncollectible
Writing off an uncollectible account:
Uncollectible Accounts Exp
Acct. Rec. - Customer name
Uncollectible
Amount Uncollectible
Amount
Recoveries of Uncollectible Accounts:
Two entries are required: (1) reverse the write off of the account
(2) record the cash collection of the account
(1) Reinstating the Account:
Acct. Rec. - Customer name
Amount written off
Allowance for D.A.
Amount written off
(2) Collection on the Account:
Cash
Amount received
Acct. Rec. - Customer name
Amount received
Credit Card and Bankcard Sales:
Non Bank Credit card sales - cash is not received at point of sale (Amer. Ex., Discover)
Journal Entry for Credit Sale:
Acct. Rec. - credit card name
Difference
Credit card Discount Exp.
Sales Amount * %
Sales
Sales amount
Journal Entry for Collection of Non Bankcard sale:
Cash
Amount owed
Acct. Rec. - credit card name
Amount owed
Bankcard sales - cash is considered to be received at the point of sale (Visa, MasterCard)
Journal Entry for Bankcard Sale:
Cash
Difference
Credit card discount Exp.
Sales Amount * %
Sales
Sales amount
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Notes Receivable:
Determining the maturity date of a note:
Step 1: Start of with the term (length) of the note
Step 2: Subtract the number of days remaining in the current month
Step 3: Subtract the number of days in the following month. Keep repeating this step until the
result is less
than the number of days for the next full month. This resulting number will be the day in
which the
note matures in the next month.
Example: Find the maturity date for a 120 day note dated on September 14, 1999
Maturity date would be the 12th day of January 2000.
Computing Interest on a note:
Principal of note * Interest % * Time = Interest Amount
Time can be expressed in years, months or days depending on the term of the note or the date on
which the interest is being calculated.
If time is expressed in months, then time is should as a fraction of a year by dividing the number
of months the interest is being calculated for by 12.
Time = (# of months) / 12
If time is expressed in days then time is shown as a fraction of a year by dividing the number of
days the interest is being calculated for by 360. NOTE: Use 360 instead of 365.
Time = (# of days) / 360
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Recording Notes Receivable:
If note was received because we lent out money:
Notes Receivable
Cash
Face Value of Note
Face Value of Note
If note was received as a payment on an accounts receivable:
Notes Receivable
Accounts Receivable
Face Value of Note
Face Value of Note
The collection of the note at maturity:
Cash
Notes Receivable
Interest Revenue
Maturity Value of Note
Face Value of Note
Interest Received
Accruing of Interest on a Note:
Interest Receivable
Interest Revenue
Principal * Interest % * Time
Principal * Interest % * Time)
Discounting of Notes Receivables:
There are five basic steps involved when discounting a note:
Step 1: Compute interest due on the note . . . . . . . . . . . . . . . . . . . Principal * Interest % * Time
Step 2: Compute maturity value (MV) of the note . . . . . . . . . . . . . . Principal + Interest (from
Step 1)
Step 3: Compute the number of days the bank will hold the note . . . Term of Note - number of
days past
Step 4: Compute the bank’s interest on the note . . . . . . . . . . . . . . . MV * Interest % * Time
Step 5: Compute the proceeds to be received . . . . . . . . . . . . . . . . . MV - Bank’s Interest (from
Step 4)
Journal Entry if the proceeds > maturity value:
Cash
Proceeds
Notes Receivable
Interest Revenue
Face Value of Note
Difference
Journal Entry ff the proceeds < maturity value:
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Cash
Interest Expense
Note Receivable
Proceeds
Difference
Face Value
Accounting for Dishonored Notes:
If a note is dishonored (not paid on time) by the maker of the note, then the note receivable must
be transferred to accounts receivable for the maturity value of the note.
Accounts Receivable
Note Receivable
Interest Revenue
Maturity Value
Face Value
Interest Earned
If the note was discounted to a bank and was then dishonored by the maker, then we must pay
the bank the maturity value of the note plus a protest fee. This amount will then be charged to the
person who gave us the note as an accounts receivable.
Accounts Receivable
Cash
Maturity Value + Protest fee
Maturity Value + Protest fee
Financial Ratios:
Acid-Test (Quick) Ratio = (Cash + ST Investments + Net current receivables) / Total Current
Liabilities
Day’s Sales in Receivables = (Average Net Receivables * 365) / Net Sales
66
Uncollectible Accounts - Class Exercise 1
Use T Accounts to indicate your knowledge in journalizing and the General Journal page 7
JOHN JOHNNY Company had the following transactions:December 31, 2004
1.
Accounts Receivable Balance
Credit Sales
$100,000
$175,000
Situation 1 - JOHN JOHNNY believes that 3% of Credit Sales will not be collected
Situation 2 - JOHN JOHNNY’s experience is that 4.5% of Accounts Receivable Balance will not be
collected.
a. Record the allowance for uncollectible accounts under both methods
b. Show the Balance Sheet portion under both Method
Uncollectible Accounts – Home Work Exericse 1
TOM TOMMY Company had the following transactions:December 31, 2005
2.
Accounts Receivable Balance
Credit Sales
$120,000
$200,000
Situation 1 - TOM TOMMY believes that 2% of Credit Sales will not be collected
Situation 2 -TOM TOMMY’s experience is that 5% of Accounts Receivable Balance will not be
collected.
a. Record the allowance for uncollectible accounts under both methods
b. Show the Balance Sheet portion under both Method
Accounts Receivables Written-off - Class Exercise 2
1. On January 8, 2005, Slick Slicky, a customer skipped town and his account was written off as
uncollectible in the amount of $1,500
2. On January 15, 2005, after receiving salvation in a church in Freeport, Slick Slicky came in and
paid $1,000 on his account.
Instructions: Record the following entry under both the allowance method and the direct write-off
method.
i.
The January 8th transaction
ii.
The transaction on January 15th to reinstate the account
iii.
The payment on January 15th
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Accounts Receivables Written-off – Home Work Exercise 2
1. On May 8, 2006, Sick Sicky, a customer died and her account was written off as uncollectible in the
amount of $2,800
2. On June 17, 2006, after challenging the estate for the amount outstanding, Sick Sicky’s Father Age
Agey, paid 50% of the outstanding amount.
Instructions: Record the following entry under both the allowance method and the direct write-off
method.
i.
The May 8th transaction
ii.
The transaction on May 17th to reinstate the account
iii.
The payment on May 17th
Credit Card Sales – Class Exercise 3
On November 30, 2005 the Sell Selly company had total sales of $100,000. The sales comprised of the
following:Credit Sales 2/10 EOM
30%
Cash Sales
35%
Credit Card Sales (Visa)
25%
There was a 1% credit card fee on all credit card sales, which is deducted by the
credit card company.
Instructions:1. Record the sales on November 30th
2. Record the credit card fees on November 30th
3. Record the net Credit Sales Collection on December 12th
4. Record the net Credit Card Sales Collection on December 15th
Credit Card Sales – Home Work Exercise 3
On August 24, 2006 the Book Booky company had total sales of $300,000. The sales comprised of the
following:Credit Sales 3/15 ‘60
20%
Cash Sales
40%
Credit Card Sales (Visa)
40%
There was a 2% credit card fee on all credit card sales, which is deducted by the
credit card company.
Instructions:1. Record the sales on August 24, 2006
2. Record the credit card fees on August 24, 2006
3. Record the Credit Sales Collection on September 14th
4. Record the net Credit Card Sales Collection on September 30th
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Notes Receivables – Class Exercise 4
Record the following transactions for Pet Petty company:On July 1, 2005, received a 10%. 2 year note from Past Pasty for $10,000 to replace an
accounts receivable that was 78 days old. Instructions:1. Record the note received on July 1, 2005
2. Record the interest received on December 31, 2005
Notes Receivables – Home Work Exercise 4
Record the following transactions for Stip Stippy company:On October 1, 2005, received a 12%. 1 year note from Bret Bretty for $8,000 to replace an
accounts receivable that was 125 days old. Instructions:3. Record the note received on October 1, 2005
4. Record the interest received on December 31, 2005
69
Chapter 9: Merchandise Inventory
Comparison of Inventory Systems:
Periodic - does not keep a continuous record of inventory on hand
- physical inventory is required at least once a year
Perpetual - keeps a continuous record of inventory on hand
- an annual physical inventory is still required
Journal entries for Purchases and Sales of Inventory:
Determining the Cost of Goods Sold (Periodic System):
+
=
=
Beginning Inventory Balance
Purchases
Cost of Goods Available for Sale
Ending Inventory Balance
Cost of Goods Sold
70
Inventory Costing Methods:
(1) Specific Unit Cost - Cost method based on the specific cost of particular units of inventory
(2) Weighted Average Cost - Cost method based on the weighted average cost of inventory
purchased and held during the period
(3) FIFO - Cost method by which the first costs into inventory (first units purchased) are the first
costs out to cost of goods sold (first units sold). Ending Inventory consists of the most recent
purchases.
(4) LIFO - Cost method by which the last costs into inventory (last units purchased) are the first
cost out to cost of goods sold (first units sold). Ending Inventory consists of the beginning
inventory and the earliest purchases made.
Accounting Principles and Concepts:
Consistency Principle - a business should use the same accounting method and procedures from
period to period.
Disclosure Principle - a business’ financial statements must report enough information for
outsiders to make knowledgeable decisions about the business.
Materiality Concept - a business must perform strictly proper accounting only for items and
transactions that are significant to the business’ financial statements.
Conservatism - a business should report the least favorable figures in the financial statements
Lower of Cost or Market - requires that an asset be reported in the financial statements at
whichever is lower
(1) its historical cost or
(2) its current market value.
Estimating Inventory using the Gross Margin (Gross Profit) Method:
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Class Exercise 1
Home Work Exercise 1
Class Exercise 2
Laz Lazy used the Gross Profit method to estimate inventory. The following transactions were
available as at December 31, 2005.
Beginning Inventory $100,000
Cost of Goods sold 40% of Sales
Sales
$900,000
Purchases
50% of Sales
Instructions: Prepare a cost of goods sold statement
Home Work Exercise 2
Phil Philly used the Gross Profit method to estimate inventory. The following transactions were
available as at December 31, 2005.
Beginning Inventory $150,000
Gross Profit
40% of Sales
Sales
$1,500,000
Purchases
200% of gross profit
Instructions: Prepare a cost of goods sold statement
72
Chapter 10: Plant Assets and Intangible Assets
Types (classifications) of Assets:
1.) Current Assets - short lived assets used in the operations of a business
2.) Plant Assets - long lived tangible assets used in the operations of a business
3.) Long Term Investment - long lived tangible assets held for investment purposes
4.) Intangible Assets - assets with no physical form but the special rights they have give them
value
Cost of a Plant Assets:
Costs assigned to a plant asset equal the sum of all costs incurred to bring the asset to its
intended purpose minus all discounts received.
Land Costs include:
1.) Original purchase price
2.) Commissions
3.) Survey fees
4.) Legal fees
5.) Back property taxes
6.) Grading and clearing the land
7.) Demolishing or removing of buildings
Land Improvements costs include:
1.) Fencing costs
2.) Paving driveways
3.) Sprinkler systems
4.) Lighting
5.) Signs
Buildings cost include:
1.) Original purchase price
2.) Commissions
3.) Sales and other taxes
4.) Repairs and renovations
5.) Architectural fees
6.) Building permits
7.) Contractor’s charges
8.) Materials, labor, and overhead
9.) Capitalized interest
Machinery and Equipment cost include:
1.) Original purchase price
2.) Transportation charges
3.) Insurance while in transit
4.) Sales and other taxes
5.) Commissions
6.) Installation charges
7.) Testing costs (before placed in service)
8.) Repairs (before placed in service)
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Assets and their related expense account:
Construction in Progress:
Construction in progress is an asset that the company is constructing for its own use in the
business.
Capitalizing Interest:
Interest expenses in connection with the construction of an asset is to be capitalized as part of the
cost of that asset.
Interest to be capitalized = the lessor of:
(1) Interest based on the Average Accumulated Construction expenditures
Or
(2) Actual interest cost on borrowed money "during the construction period"
Journal Entry to record construction costs incurred:
Building (or Construction in Progress)
Cash (or Notes Payable)
$xxxxx
$xxxxx
Journal Entry to record accrued interest:
Building (or Construction in Progress)
Interest Expense
Interest Payable
Capitalized Interest
Difference (if any)
Total accrued interest
Lump sum purchase of assets:
Costs are divided among the assets according to their relative sales (market) values, if the costs
have not already been divided in the sales agreement. In allocating the purchase price to the
74
assets, the first step is to added together the market values of each asset to get a total market
value. Next you will divide each asset's individual market value by the total market value to
come up with a percentage. Now this percentage will be multiplied by the total purchase price.
The resulting amount represents how much of the total purchase price will be allocated to each
individual asset account.
NOTE: The total you get for the Allocated Asset Cost column may not equal the total purchase
price exactly due to rounding. But the difference should be small and can be fixed by rounding
the cost of the assets up or down. In the example above, the percentage for the second asset
comes out as 26.666666%. But by rounding the percentage off to 26.67% the total allocated
asset cost comes out to balance with the total purchase price. If we had not round the percentage
off and left it as 26.66%, then our total allocated asset cost would have come out to $9999.
Capital vs Revenue Expenditures:
Capital Expenditures - increases the capacity or efficiency of an asset or extends its useful life.
Expenditures are debited to the asset’s account
Revenue Expenditures - merely maintain an asset or restores the asset to working order.
Expenditures are debited to an expense account
Examples of the difference between Capital and Revenue Expenditures for a delivery truck:
Capital
Major engine overhaul
Modification of body for
new use of truck
Additions to storage
capacity of the truck
Revenue
Repair of transmission or other
mechanism
Oil change, lube, etc
Replacement tires, windshield
Paint job
Depreciation:
75
Useful life - length of service that a business expects to get from an asset may be expressed in
terms of years, units, miles or any other measurement
Residual value - expected cash value of an asset at the end of its expected useful life
Depreciation Methods:
Double declining balance method:
Step 1: Find Straight line (SL) rate = 100% / Useful life
Step 2: Find Double declining balance (DDB) rate = SL rate * 2
Step 3: Find depreciation for the year = Beginning Book Value * DDB rate
NOTE: Depreciation taken cannot bring the book value below the residual value in any given
year.
Normally the depreciation will have to be limited in the assets last couple of years of
service.
Journal Entries for the Disposal of Plant Assets:
When fully depreciated:
Accumulated Depreciation - Asset
Loss on disposal of asset
Asset
When not fully depreciated:
Accumulated Depreciation - Asset
Loss on disposal of asset
Asset
Total Depr. taken
Residual Value
Original cost
Total Depr. taken
Remaining Book Value
Original Cost
Sale of a Plant Asset:
76
When selling a Plant Asset follow the steps below to make the appropriate journal entry.
Step 1.) Calculate the depreciation for the year up to the time of sale. Since most sales do not
happen at the beginning
or end of the month or year, it might be necessary to prorate the depreciation up to the
day of sale.
Depreciation for the year * (number of months/12)
Example: $5000 * (8 months/12) = $3333
Depreciation Expense, Asset
$3333
Accumulated Depreciation, Asset
$3333
Step 2.) Determine the Gain or Loss on the sale
Cash received
$5000
Book value of asset
Original cost
$50000
Less: Accumulated Depr.
(40000) (10000)
Gain (Loss) on sale
$(5000)
Step 3.) Journal entry to record the sale
Cash
Sales price ($5000)
Accumulated Depr, Asset
Total Depr. taken (40000)
Loss on sale of asset
Difference (5000)
Asset
Original Cost (50000)
If there was a gain on the sale of the asset, then there would be a credit to "Gain on sale of asset"
account rather than a debit to "Loss on sale of asset."
Exchanging of Plant Assets:
Asset
Accumulated Depr, Asset
Loss on exchange of asset
Asset
Cash
Cost of New asset (45000)
Total depr. taken on old asset (17500)
Difference (2000)
Cost of Old asset (60000)
Cash paid (4500)
If there is a gain, the difference would be credited to "Gain on exchange of asset" rather than
shown as a debit to "Loss on exchange of asset".
Depletion of Natural Resources:
Depletion is calculated using the units of production method.
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Journal entry:
Depletion Expense
Depletion per unit * Units produced
Accumulated Depletion
Depletion per unit * Units produced
Amortization of Intangible Assets:
Amortization - is computed on a straight line basis. It is charged directly against the asset rather
than to an accumulated amortization account
Intangible assets include: patents, copyrights, trademarks, goodwill
Journal Entry:
Amortization Expense - Intangible asset
Intangible asset
Original cost / useful life
Original cost / useful life
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Depreciation: Class Exercise 1
Trip Trippy purchased a vehicle on January 1, 2001 for $25,000. The vehicle had a useful life of 5 years
and salvage of $5,000.
Instructions: Complete the following using the (a) Straight-line method of depreciation and the (b) Double
Declining Balance:1.
2.
3.
4.
5.
The entry to record the purchase on January 1, 2001
The depreciate schedule for the entire five years
The entry to record depreciation for the first year
The Fixed Asset portion of the Balance Sheet at December 31, 2001
If the vehicle was sold for 80% of its cost in year for
a. Record the entry to resold the sale, as well as, gain or loss.
Depreciation: Homework Exercise 1
Strick Stricky purchased a building on January 1, 2003 for $150,000. The Building had a useful life of 20
years and salvage of $30,000.
Instructions: Complete the following using the (a) Straight-line method of depreciation and the (b) Double
Declining Balance:1.
2.
3.
4.
5.
The entry to record the purchase on January 1, 2003
The depreciate schedule for the entire five years
The entry to record depreciation for the first year and second years
The Fixed Asset portion of the Balance Sheet at December 31, 2003 and December 31, 2004
If the building was sold for $100,000 on June 30, 2009
a. Record the entry to resold the sale, as well as, gain or loss.
Capital Expenditure – Class Exercise 2
The following data was taken from the books of Date Datey at December 31, 2005:i. Payment for Salaries
$10,000
ii. Payment for Office Supplies
$5,000
iii. Payment for Equipment
$25,000
iv. Freight on Equipment purchased
$6,000
v. Insurance on Equipment purchased $3,500
vi. Duty on Equipment purchased
$12,500
vii. Freight to deliver old equipment sold $2,500
viii. Small repairs on old equipment
$600
ix. Paid office rent
$1,000
x. Purchase a new office safe
$5,000
Instructions: Prepare schedules of Capital and Revenue Expenditures
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Capital Expenditure – Home Work Exercise 2
The following relates to Yuk Yuki as at December 31, 2005
1. Paid for insurance, $600
2. Bought supplies on account from Swan’s Supply Company, $200
3. Bought Equipment for Cash $15,000
4. Paid freight on Equipment 4% of purchase price
5. Paid duty on Equipment 30% of Equipment cost, plus freight
6. Paid cash for rent, $400
7. Paid cash for advertisement, $75
8. Paid Salaries $600
9. Purchase a land for $30,000
10. Paid stamp tax on land 7 % of land cost
Instructions: Prepare schedules of Capital and Revenue Expenditures
Capital Expenditure – Home Work Exercise 3
Write a one page essay comparing revenue versus capital expenditures
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Chapter 11: Current Liabilities and Payroll
Short Term Notes Payable:
Journal Entry to record purchase made with a note:
Machinery
Notes Payable, Short Term
Face Value (FV) of note
Face Value (FV) of note
Journal Entry to accrue interest on the note:
Interest Expense
Interest Payable
FV * xx% * (# months/12)
FV * xx% * (# months/12)
Short Term Notes Payable issued at a discount:
1. Where the bank deducts the total interest due on the note from the face value of the note
and gives the remaining proceeds to the business.
2. At maturity the full amount (Face Value) is repaid to the bank.
Journal Entry for the borrowing of cash:
Cash
Discount on Note Payable
Note Payable, Short Term
Proceeds
FV * xx% * (term of note/360)
Face Value
Journal Entry for Accruing Interest Expense:
Interest Expense
Discount on Note Payable
FV * xx% * (# days accrued/360)
FV * xx% * (# days accrued/360)
Journal Entry for payment of note at maturity:
Notes Payable, Short Term
Cash
Face Value
Face Value
Recording of Sales and related Sales Tax Payable:
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Unearned Revenue:
This is where the business receives a cash payment for services or goods before the goods or
services are provided to the customer. The payment is shown as a liability until the goods or
services are provided to the customer. Once they have been provided they are transferred from
the Unearned Revenue account to the normal Revenue account for the business. The Revenue
account credited depends on what was provided to the client. If a service was provided, then it
would be called Service Revenue. But you could also have accounts titled Rent Revenue,
Subscriptions Revenue, Tuition Revenue (as in the case of this college), etc..
Journal entry for advanced payment:
Cash
Unearned Revenue
Amount received
Amount received
Journal entry for when goods or services are provided:
Unearned Revenue
Service Revenue
Value of goods/services provided
Value of goods/services provided
Estimated product warranty payable:
Warranty expense must be recorded in the same period that the business recognized the sales
revenue for the product. However, since the exact warranty expense is not known until the
customer returns the merchandise for a replacement or repairs, it must be estimated. Usually it is
estimated as a percentage of sales. The percentage is derived from past experience.
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Journal entry to accrue warranty expense:
Warranty expense
Estimated Warranty Payable
Sales * xx%
Sales * xx%
Journal entry for the repair of product under warranty:
Estimated Warranty Payable
Cash
repair costs
repair costs
Journal entry for the replacement of a product under warranty:
Estimated Warranty Payable
Inventory
replacement cost
replacement costs
Estimated Vacation Pay Liability:
The vacation pay is figured as a percentage of the payroll (gross pay). The percentage is equal to
the "vacation time allowed" (in weeks) divided by the "total work time" (in weeks) for a year.
Journal entry to record vacation expense
Vacation Pay Expense
Estimated Vacation Pay Liability
Payroll * xx%
Payroll * xx%
Journal entry to record vacation time taken:
Estimated Vacation Pay Liability
Cash
Vacation pay
Vacation pay
Payroll:
Gross pay - total amount of salary, wages, & commissions before taxes and other deductions
Net pay - gross pay minus all deductions
Payroll deductions:
Income tax - federal income taxes withheld from an employees gross pay. The amount withheld
depends on the gross pay, marital status, and the number of allowances (dependents) claimed by
the employee. The amount withheld is a liability to the business since it must be paid to the
government.
Social Security (FICA) tax - consists of two parts (1) OASDI (Social Security) and (2) Medicare
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- OASDI is applied to the first $65,000 of an employee’s wages at a rate of 6.2%
- Medicare is applied to all of an employee’s wages at a rate of 1.45%
Other Payroll Deductions - other deduction may include union dues, insurance premiums,
charitable contributions, and contributions to retirement plans. These deductions may or may not
appear on each employee's paychecks. Most of these deductions are voluntary.
Employer Payroll Taxes:
FICA tax - employers must match the amount of FICA tax withheld from the employee’s gross
pay
State Unemployment Compensation (SUTA) tax - a tax paid only by the employer to the state. It
is applied only to the first $7,000 of each employee’s gross pay.
Federal Unemployment Compensation (FUTA) tax - a tax paid only by the employer to the
federal government. It is also applied only to the first $7,000 of each employee’s gross pay.
Payroll entries:
To record payroll:
Salary (Wages) Expense
Employee Income Tax Payable
FICA Tax Payable
Employee Union Dues Payable
Salary (Wages) Payable
Gross Pay
Income tax withheld
Gross pay * FICA%
Amount of dues
Net Pay
To record employer’s payroll tax expense:
Payroll Tax Expense
FICA Tax Payable
SUTA Tax Payable
FUTA Tax Payable
Total of all taxes
Matches the employee’s tax
Gross pay * SUTA%
Gross pay * FUTA%
To record employee benefits paid by the employer:
Health Insurance Expense
Life Insurance Expense
Pension Expense
Employee Benefits Payable
Amount paid
Amount paid
Amount paid
Total of all benefits
To record payment of net pay:
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Salary (Wages) Payable
Cash
Net Pay
Net Pay
To record payment of payroll taxes and deductions:
Employee Income Tax Payable
FICA Tax Payable
Employee Union Dues Payable
Employee United Way Payable
SUTA Tax Payable
FUTA Tax Payable
Cash
Amount due
Amount due
Amount due
Amount due
Amount due
Amount due
Total paid
To record the payment of employee benefits:
Employee Benefits Payable
Cash
Amount paid
Amount paid
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Class Exercise 2
If Jeff Jeffy allows two weeks vacation per annum for all employee, what is the entry to record accrued vacation if
only 25% of the staff took vacation for 2003?
Home Work Exercise 2
If Heff Heffy allows three weeks vacation per annum for all employee, what is the entry to record accrued vacation if
only 40% of the staff took vacation for 2003?
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Appendix 1 – Accounting Terms
Accounts Payable: Accounts of money you owe. A liability that is usually created when you've made a
purchase on credit.
Accounts Receivable: Accounts of money owed to you for the sale of goods or services.
Accrual basis: A method of accounting where transactions are recorded as they occur regardless of when
payment for that transaction is made or received
Accrued Assets: Assets from revenues earned but not yet received.
Accrued Expenses: A liability incurred during the accounting period for which payment has not been made.
Accrued Income: Income earned during an accounting period but not received/recorded by the end of the
period.
Aging: The grouping of like transactions by date. Example - sorting invoices by due date.
Adjusting Entries: Special accounting entries that are made when you close the books at the end of an
accounting period to bring the ledger up to date.
Asset: Items that a business or individual owns or are owed.
Audit: The scrutinizing of accounting records and supporting documents for accuracy and completeness.
Audit trail: The information within the accounting system that reveals the effects of a transaction.
Bad Debt: An account or receivable that has been deemed unrecoverable and written-off.
Balance Sheet: A statement listing the total assets and liabilities; indicating the net worth of the company for the
given time period.
Capital: The right to assets of the owner of a business..
Cash basis: An accounting method where transactions are recorded when the actual change of payment occurs,
regardless of when the goods or services are delivered.
Certified Financial Statements: Financial statements that have been audited and certified by a CPA.
Chart of accounts: A numerical listing of a business’s accounts.
Closing Entries: Journal entries made at the end of the period to return the balance in all accounts to zero and
ready the account for the next reporting period..
Credit: An entry on the right side of an account - decreases assets or increases liabilities.
Debit: An entry on the left side of an account - increases assets or decreases liabilities.
Depreciation: The allocation of the cost of a tangible, long-term asset over its useful life.
Expenses: The daily costs incurred in running a business.
Fiscal: A 12 month accounting period. Not necessarily a calendar year.
General Ledger: The master record of all the balance sheet and income statement account balances.
Gross profit: The amount of net sales minus the amount of cost of sales
Income statement: A statement that summarizes revenues and expenses.
Invoice: A form, sent from the seller to the buyer, listing the items bought, price, terms etc..
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Journal: A chronological record of transactions, also known as the book of original entry.
Ledger: A book containing accounts to which debits and credits are posted from books of original entry.
Liability: A debt or obligation.
Net sales: The amount left when returns, discounts, and allowances are deducted from sales revenue.
Operating Expenses: The expenses that are incurred from the daily operation of the business.
Owners' equity: The owners' right to the assets of an entity.
Prepaid Expenses: Amounts that are paid in advance for product is not used up during the accounting period.
Post: The process of transferring amounts from a journal to the appropriate ledger accounts.
Purchase order: Written instructions to a vendor to ship and bill for the listed items.
Reversing Entry: An entry made to reverse a prior entry..
Trial Balance: A work sheet showing the balances in each account; used to prove the equality of debits and
credits.
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Appendix 2
Associate Degree Program (Accounting)
Financial Accounting and Standards
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Appendix 3
Bachelor’s Program (Accounting)
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Appendix 4
Accounting Courses Description
COURSE DESCRIPTION
ACCOUNTING
ACC 111 ACCOUNTING PRINCIPLES I
Introduction to the fundamental Principles of Accounting and its relationship to business.
Includes the basic accounting procedures from the business transaction through the journals
and ledgers to the financial statements. Emphasis is placed on principles and procedures in
accounting for receivables, payables, inventories, plant assets and payroll.
3 Semester Hours
ACC 112 ACCOUNTING PRINCIPLES II
Major emphasis is placed on the procedures involved in accounting for capital structure of
corporations. Includes accounting principles for partnerships, departmental operations, home
and branch activities and bond issues. Also introduced is basic Accounting procedures,
fundamentals of Financial Statement Analysis and Tax Accounting.
Prerequisite: ACC 111 3 Semester Hours
ACC 211 INTERMEDIATE ACCOUNTING I
Theories and problems involved in proper recording of transactions and preparation of financial
statements. Review of the accounting cycle, discussion of financial statements, analysis of
theory as applied to transactions relating to current assets, current liabilities, long-term
investment and presentation on the Balance Sheet.
Prerequisite: ACC 112 3 Semester Hours
ACC 212 INTERMEDIATE ACCOUNTING II
Detailed presentation of theory applied to plant and equipment, intangible assets, long-term
debt, capital stock and surplus; correction of errors of prior periods; analysis of financial
statements and statement of application of funds.
Prerequisite: ACC 211 3 Semester Hours
ACC 214 COST ACCOUNTING I
A Comprehensive study of the Manufacturing Business using a job order Cost Accounting
system.
Prerequisite: ACC 112 3 Semester Hours
ACC 215 COST ACCOUNTING II
A Comprehensive study of the Manufacturing Business using a process Cost Accounting
system and a standard Cost Accounting system. Also studied is cost data for planning, control
and decision making. Prerequisite: ACC 214 3 Semester Hours
ACC 221 QUICKBOOKS ACCOUNTING
This course will familiarize students with the basic concepts from in QuickBooks. First time
users of QuickBooks will be introduced to the various features this accounting software has to
offer. Using a Windows environment, students will receive hands-on instruction as they work
through scenarios of entering data and setting up accounts.
3 Semester Hours
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ACC 311 MANAGERIAL ACCOUNTING
This course stresses the use of accounting for Managerial planning and control. Emphasis is
placed on the role of accounting in decision making. It covers retailing, wholesaling,
manufacturing and administrative operations.
Prerequisite: ACC 112 3 Semester Hours
ACC 312 ADVANCED ACCOUNTING I
Property Acquisition, Revaluation and Retirement, Depreciation Principles and practices are
studied in greater depth. Intangible Assets, Current and long-term Debt, Pension Plans,
Corporation formation and Capital Stock transactions are covered.
Financial Statement
analysis, Funds flow and related statements are given thorough treatment. Frequent reference
is made to pronouncements by the Securities and Exchange Commission and the American
Institute of Certified Public Accountants (AICPA).
Prerequisite: ACC 212 3 Semester Hours
ACC 313 ADVANCED ACCOUNTING II
Accounting theory and current practices are studied in depth with emphasis on the concepts
and standards prevailing in the accounting profession. Coverage is afforded such topics as
Partnerships formation, Dissolution and Liquidation, Installment and Consignment Sales, Home
Office and Branch Accounting Consolidations.
Prerequisite: ACC 312 3 Semester Hours
ACC 314 GOVERNMENTAL ACCOUNTING
Study of accounting for governmental entities including: budgets, general funds, capital project
funds, debt service funds, trust and agency funds, fixed assets, capital expenditures, property
tax accounting, and interfund relationships. Also includes accounting standards for voluntary
health and welfare organizations, colleges, hospitals, and other types of not-for-profit
organizations.
Prerequisite: ACC 212 3 Semester Hours
ACC 315 PRINCIPLES OF AUDITING
A practical presentation of modern audit practices, emphasizing the principles and objectives of
an audit. Analysis of the audit basis, the best standards, objective reporting, the adoption of
improved accounting standards, business controls, professional ethics, and legal liability.
Prerequisite: ACC 212 3 Semester Hours
ACC 321 INDIVIDUAL INCOME TAXES
The Internal Revenue Code, the various income tax acts, and problems of the preparation of
U.S. tax returns are studied as they relate to the individual. Emphasis is placed on the
determination of income and statutory deductions in order to arrive at the net taxable income.
Prerequisite: ACC 212
3 Semester Hours
ACC 322 CORPORATE INCOME TAXES
The U.S. Internal Revenue Code and the various income tax acts are studied as they relate to
partnerships, estates, trusts, and corporations. Federal estate tax return problems are
considered. Methods of tax research are integrated into each of the areas studied.
Prerequisite: ACC 321
3 Semester Hours
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Appendix 5
Accounting News
On December 6, 2004, the American Institute of Certified Public
Accountants held a significant joint meeting at the Harbor Side
Financial Centre in Jersey City, New Jersey. At this joint session
which included the National Association of State Boards of
Accountancy and the Prometric Testing Center, certain CPA Review
Providers were invited, which included, Dr. Irvin Gleim of Gliem
Publication, Dr. Willis L. Johnson, of the Galilee CPA Review, and
other leaders in the provisioning of CPA education. Both Dr. Gleim
and Dr. Johnson attended the original meeting for the new Computer
Based Examination on December 15, 2003 a the AICPA
headquarters in New York.
Dr. Johnson called for local CPA testing in the Bahamas and other countries outside the U.S. Supported by Dr.
Gleim and other review providers, Dr. Johnson substantiated his plea by referring to charges for hotel, airline, meals,
transportation and excessive time in the U.S. He indicated that although the exams can now be taken in Miami, CPA
candidates have experienced numerous difficulties that are financially and emotionally burdensome. Dr. Johnson
presented cases where the Prometric system either crashed, malfunctioned or encountered other administrative
difficulties.
Further he said, that the state boards take an unusual long time before a candidate can receive his or her Notice to
Schedule. Some time at least four month. While he said that these problems might exist if testing is locally done, at
least, candidates will be at home and the cost of rescheduling will not be difficult to bear.
During the session it was reported that some 308 Bahamian candidates sat the CPA exam in 2003. While the 2004
statistics were not completed, Dr. Johnson indicated that there will be an increase in numbers due to the increase in
his volume of candidates engaged in the Galilee CPA Review Program.
As a result of the widespread support for local testing outside the U.S. , a task force was appointed to present a white
paper to the AICPA by mid January 2005. This white paper will address the following issues:•
•
•
•
•
International volume
Disadvantages if the Exam is not administered outside the U.S.
Additional testing administrative fee
Internationally security issues
Examination Frequency
David Ginsburg, President and CEO of Prometric, who supports local testing in the Bahamas and other countries
outside the U.S will address security issues.
Gleim CPA Publications
Irvin N. Gleim, Ph.D., CIA, CMA, CFM, CPA, CFII, is Professor Emeritus, at the Fisher School of Accounting,
University of Florida. He has been active in both pilot and accountant training for over 30 years. His knowledge
transfer systems make learning and understanding an intuitively appealing process.
Dr. Gleim is helping individuals attain higher levels of knowledge (analysis, synthesis, and evaluation) while they
learn concepts and problem solving techniques. Dr. Gleim’s mission is to maximize knowledge transfer while
minimizing time, frustration, and cost.
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Galilee CPA Review
Willis L. Johnson, Ph.D., CPA, MFP, Certified Marriage and Family Counselor serves as president of Galilee
College and Galilee Professional Institute. Dr. Johnson is a veteran lecturer. For the past five years he has been
engaged in directing the Galilee CPA Review program. He is known for his profound academic theatrics as he
delivers the CPA curriculum. His success rate is phenomenal and measures alongside other giants in the region.
The Galilee CPA Review is newly fueled and well prepared to provide quality instruction by way of a sophisticated
approach that will catapult candidates to the levels of success that they aspire to.
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