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The Everything at a Discount Accounting Problem A Review of the Accounting Cycle Closing Balances Permanent accounts Opening Balances Permanent accounts The Basic Accounting Cycle Financial Statements Transactions for the period End of period Adjustments Purpose: The purpose of this individual accounting cycle problem is to review key principles of the Accounting Cycle that we have been learning this semester, while also improving your critical thinking, demonstrating your understanding and application of the fundamental accounting cycle steps, organization, including the correct use of accounting formats and titles, and time management skills. Your First Day at Brilliant Accounting Firm Congratulations! You have just been hired as a new junior accountant at Brilliant Accounting, an established accounting firm with a great reputation. It is November 15, 2021, and you just arrived in Martin Hall for your first day at your new job!. Your first new client is Harry Warren, owner of a small merchandising company called "Everything at a Discount." It is Mr. Warren's goal to one day compete directly with Jeff Bezos and Amazon and have his own home delivery megacompany. But for now, he runs his start up business operations from a small store on Montross Avenue in Rutherford. Since his background is in logistics, he is also offering consulting services and the consulting income will be recognized as service revenue. The service revenue will help provide additional money while he works to expand Everything at a Discount. Everything at a Discount started operations on August 1, 2021, and it is Mr. Warren's desire to expand that brings him to Brilliant Accounting, and you, for help. Mr. Warren would like to expand his business and to do that he needs to get his accounting in order. Not surprisingly, to understand the business and how well it is operating, Mr. Warren is asking you to prepare a complete accounting cycle for the business. Based on the information below, please prepare a complete accounting cycle for August 2021 for Everything at a Discount. mation in its current form? Discuss this among your team and then continue. August 1 August 1 The following assets were received by Everything at a Discount from Harry Warren: Cash $14,500; accounts receivable $21,800; supplies $4,200, office equipment $8,500. No liabilities were received. Paid two months rent on a rental office space on Montross Avenue, Rutherford 54,800 Paid the premiums for one year insurance policy $4,500 Received cash from clients as an advanced payment for services to be provided $5,500 August 2 August 4 August 5 Purchased office equipment on account from Staples on Route 17 $6,500 August 6 August 10 August 12 August 12 Received cash from clients on account, $15,300 Paid cash for advertisement in Rutherford newspaper, $400 Paid Staples for part of the debt incurred on August 5,55,200 Recorded services provided on account for the period Aug 1 - Aug 12 $13,300 August 14 August 17 Paid receptionist for 2 weeks' salary, $1,750 Received cash from cash clients for fees earned for the period Aug 1 - 17, 59,450 August 18 Paid cash for supplies, 5600 Recorded services provided on account for the period August 13 -20, $6,650 August 20 August 24 Received cash from cash clients for fees earned for the period Aug 17 - 24, $4,000 Received cash from clients on account $12,000 August 26 August 27 August 29 August 31 August 31 Paid receptionist for 2 weeks' salary, $1,750 Paid telephone bill for August $325 Paid utility bill for August $675 Received cash from cash clients for fees earned for the period Aug 25. 31, $6,200 Recorded services provided on account for the remainder of August $4,000 Warren withdrew $13,500 from the business. August 31 August 31 Instructions: Complete the Accounting Cycle as indicated in the following 4 steps. Step 1: Prepare the journal entries, post to T-Accounts and prepare the Unadjusted Trial Balance. Make sure your Unadjusted trial balance is in balance (debits = credits) before you move on to Step #2. Step 2: Using the additional information below, prepare the adjusting entries and the Adjusted Trial Balance. a) Insurance expired during August, $375 b) Supplies on hand at August 31, $1,525 c) Depreciation of office equipment for August, $750 d) Accrued receptionist salary on August 31, $175 e) Rent expired during August, $2,400 f) Unearned fees on August 31 are $2,750 Make sure your Adjusted trial balance is in balance (debits = credits) before you move on to Step #3 Step 3: Prepare, in proper form, the Income Statement, the Statement of Owner's Equity and the Balance Sheet for "Everything at a Discount". Make sure your Balance Sheet is in balance (assets - liabilities + owner's equity) before you move on to Step #4. Step 4: Prepare the closing entries and Post-CLosing Trial Balance Make sure your Post-Closing trial balance is in balance (debits = credits) before you turn in your

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