Comprehensive Accounting Cycle Problem

Pioneer Advertising Agency, Inc. – Month Ending November 30, 20x1

ACCT 60100 – Fall 2020
Prof. Miller

This is a continuation of the Pioneer Advertising Agency Case. Previously you completed the
accounting and financial statements for the month of October 20x1, Pioneer’s first month of
operations as a business. Below is a list of transactions that occurred during November 20x1,
Pioneer’s second month of business.

1. On November 3, Pioneer collected $2,000 for services provided in October (see

transaction #11 in the October Pioneer Case).
2. On November 6, Pioneer paid $20,000 to Aero Supply for advertising materials that
were purchased in October on account (see transaction #5 in the October Pioneer Case).
3. On November 8, Pioneer purchased additional supplies of advertising materials from
Aero Supply for $15,000 on account.
4. On November 13, Pioneer received a $25,000 cash payment and billed ReTell Company
$50,000 for advertising services totaling $75,000. The services were provided during
November.
5. On November 21, Pioneer received $70,000 cash as an advance payment for advertising
services that will be provided in December.
6. On November 25, Pioneer received $50,000 cash from Copa Company as partial
payment for advertising services provided during October (see transaction #10 in the
October Pioneer Case).
7. On November 30, Pioneer collected payment of $7,000 from a local newspaper for fliers
designed in November and delivered on November 30 (see transaction #6 in the
October Pioneer Case).
8. Pioneer pays employees’ salaries in cash. Employees are paid once a month, on the last
Friday of each month. The total payroll is $10,000 per workweek. In November, the pay
period ended on Friday, November 30. On November 30, Pioneer made salary
payments of $50,000 representing the period from October 29 through November 30.
9. Pioneer paid Felix Realty $12,000 cash on November 30 for office rent for the month of
November.
10. During November, Pioneer provided services worth $30,000 on account (the clients
were billed for the services on November 30, but cash was not yet collected).
11. One-third of the services related to transaction #3 in the October Pioneer advertising
Case were provided in November.
12. Pioneer performed a count of advertising supplies inventory and noted that $6,000 of
supplies remained at the end of November.
13. Pioneer received an advanced payment of $15,000 on November 30 for services to be
provided in December.
14. Pioneer estimates that 3% of its November ending accounts receivable balance will be
uncollectible. Pioneer did not write-off any specific accounts in November.
15. Pioneer estimates that the company owes income taxes equal to $13,307 for the month
of November. November income taxes will not be paid until early in fiscal 20x2 (i.e., the
next year).
You have been asked to account for the transactions and to prepare a balance sheet and
income statement for the month of November. When recording adjusting entries, remember
that you may need to record entries for transactions from the month of October that require
adjusting journal entries in the month of November. You are required to complete the
following:

1. Record all required journal entries for the above transactions using the Excel worksheet
titled ‘Journal Entries’ and the columns labeled “November Transactions’.
2. On the last day of November, record all of the required adjusting journal entries using
the Excel worksheet titled ‘Adjusting Entries’. Be sure to post adjusting entries for any
transactions that occurred in October but that continue to require adjusting entries in
subsequent months (for example, depreciation expense, accrued interest expense, etc.)
3. Post all of the journal entries and adjusting journal entries to appropriate T-accounts
using the Excel worksheet titled ‘T-Accounts’.
4. For the month of November, prepare an adjusted trial balance using the Excel
worksheet titled ‘Trial Balance’.
5. Prepare an income statement for the month of November using the Excel worksheet
titled ‘Income Statement’.
6. Prepare a statement of shareholders’ equity as of November 30 using the Excel
worksheet titled ‘Stmt of Shareholders’ Equity”.
7. Record closing entries using the Excel worksheet titled ‘Closing Entries’ and post the
entries to the appropriate T-accounts.
8. Prepare a balance sheet as of November 30 using the Excel worksheet titled ‘Balance
Sheet’.

You are to complete this assignment with your team members (using teams that have been
pre-assigned by the MBA office). Use the blank Excel template spreadsheets included in the
Excel file called ‘ACCT 60100 – Fall 2020 Pioneer November Template.xls’ (located on Sakai in
the resources folder ‘Problem, Cases and Solutions’ and the sub-folder ‘Pioneer Advertising
Case – Month of November’) to complete the case. The assignment is due at the end of day
Friday, August 28th. Each team should email to me a completed Excel file including journal
entries, adjusting journal entries, closing entries, T-accounts, trial balance, income statement,
statement of shareholders’ equity, and balance sheet. It is important that you include your
team number and each of your team members’ names in the email.