Omega Cleaning: Create a chart of accounts, journal entries
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Create a Chart of Accounts-consider the following.
What assets your company will require
Your investment
Revenue
At least 3 expenses
Your capital and withdrawal accounts
As a sole proprietor cleaning business.
Discuss the internal controls necessary for your business. Consider how the Sarbanes-Oxley Act applies.
Develop an income statement, statement of equity, and balance sheet by using the trial balance.
Develop journal entries for the first month. You must have the following, at a minimum:
Please scenario below
Initial investment
Revenue/sales
3 expenses
Owner's withdrawal(s)
Post these to the ledger.
Develop a trial balance.
Discuss the challenges that you will face in ensuring the integrity of your company's accounting information.
Use one Excel spreadsheet with worksheets for the journal, the ledger, and the trial balance.
June 1 Omega Cleaning Business began business by investing $85,000 cash from his personal bank account to the business bank account to start the business:
June 1 prepaid Rent 795
Jun. 2 Omega ordered cleaning supplies, $950;
Jun. 4 Omega purchased cleaning equipment for cash, $2800;
Jun. 5 leased a van by making two months lease payments in advance, $800;
Jun. 8 received the cleaning supplies ordered on October 2 and agreed to pay one half the amount in ten days from now and the rest in 30 days;
Jun. 10 Paid for repairs on the van with cash in the amount of $95;
Jun. 11 received cash for cleaning carpets, $575;
Jun. 16 Paid half of the amount owed on the supplies purchased on Jun. 7, $475;
Jun. 20 Billed customers for cleaning carpets, $759;
Jun. 25 Paid for additional repairs on the van with cash, $65;
Jun. 26 received $300 cash from the customers billed on Jun. 21;
Jun. 30 Pete withdrew $550 from the business for his personal use.
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Solution Summary
Your tutorial shows the given transaction in June, JEs, ledger and trial balance impacts. There is also some additional activity posted to the accounts (a handle full of transactions, not extensive). I created an Income Statement, a Balance Sheet and a Statement of Equity for June. A provided a chart of accounts and a some brief comments about internal controls.
Solution Preview
See chart of accounts attached in Excel.
Assets needed:
Cleaning equipment (vacuum, buckets, mops, brooms, dusters)
Computer (for billing, record keeping, corresponding)
Cash (working capital)
Internal controls:
The person opening the mail should not have any access to the accounting records. They should deposit all the funds and pay the bills but not be able to record any of it in the ledger. The person doing the ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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