Bear Creek Country Club, LLC

1
Bear Creek Country Club, LLC
Fall Semester 2018
Part II
Description of Case:
This is the second part of the Bear Creek project. This part of the project will involve recording the
transactions for the purchase and sale of inventory, accounting for the unearned golf lesson revenue and
the other accounting transactions for the operations of Bear Creek Country Club, LLC for the month of
August 2018. The accounting for each month will be completed using Double Entry 7 accounting
software. You may work together in teams of up to 3 people.
The Project Case, the Excel workbook and the August Double Entry data file for the August 2018 project
has been sent to you via your Blackboard email. The Project Case and the Excel workbook for August
2018 has also been posted to MyAccountingLab in the Shared Documents folder (MAL>Shared
Documents>Double Entry Accounting Cycle). The Project Case for the month contains the instructions
and transactions for preparing the journal entries, adjusting entries, and bank reconciliation for the
month.
Finally, the Project Case contains instructions for the order in which the documents must be arranged
and STAPLED together when turning the Project in.
Due Date:
Part II – Thursday, November 15, turn the project into Room 1100 (the COBE tutor lab) by
6:00 PM. Put the project into the appropriate plastic box.
Monthly Excel Workbook:
In addition to using the Double Entry Software to record transactions, an Excel workbook has
different tabs for calculating supporting information. Specifically, the Excel workbook will contain the
following five tabs:
Bank Reconciliation – reconcile the bank statements to make the necessary adjustments to the
general ledger cash account for unrecorded items.
Inventory Purchases & Sales – the month’s sales and purchases of inventory, separated by the
week.
FIFO Inventory – a worksheet to determine the month’s Cost of Goods Sold using the First In
First Out system for the four main items that the shop keeps in inventory.
Statement of Cash Flows – template to prepare the Statement of Cash Flows for the shop at the
end of every month. Your team will need to review entries in the general ledger cash account to
determine which items are Operating, Investing, and Financing activities and separate them
accordingly. You will also need to print out the cash account out of Double Entry, and determine
that the general ledger ending cash balance equals the ending cash balance on the statement of
cash flows.
August Calculations – a template for calculating the interest on the outstanding note payable and
a template for calculating the changes in the unearned golf lesson revenue account.
The Excel Workbook for each month is posted on MyAccountingLab in the Shared
Documents folder (MAL>Shared Documents>Double Entry Accounting Cycle).

2
Financial Statement Analysis Questions (15 points)
After preparing the journal entries and financial statements for Bear Creek Country Club, LLC. The
board wants you to make a presentation on how the golf course is doing. Answer the following questions
for the board.
1) At the end of August, Is the golf course profitable? Do you think its operations are successful after
two months?
2) Did the golf course have positive cash flows from operations during August?
3) Why is the net income at the end of August that was more than twice the cash flows from operations
during August? Explain the reasons to the Board. What suggestions do you have to help the golf
course collect cash from operations faster?
Business Events and Transactions for August 2018:
The following transactions that occurred during the first week of August are to pay the outstanding
liabilities from July 31
st.
August 1 Pay the July accrued interest to the bank. Also make a $30,000 payment on the
bank note principal.
August 5 Bear Creek Country Club, LLC paid its outstanding accrued July payroll of $3,500
plus an additional $1,000 for salaries incurred between August 1 and August 5.
August 7 Bear Creek Country Club, LLC paid the outstanding accounts payable at July 31,
2018. Since no purchase discounts were available, the full amount owed was paid.
Record the following transactions on August 31
st that occurred during the month of August.
Total Rental Fees for golf clubs, carts, etc collected in cash for the month were $18,750.
Total Green Fee revenues collected in cash for the month were $175,000.
The golf course had 40 more people sign up for Golf lessons beginning the first week of June.
The cost remains $450 for six weeks of lessons.
Golf course maintenance expenses for the month of August paid by check at the date of service
were $28,500.
Total Salary Expenses for the month of August was $12,000; of that amount $10,000 was paid
during the month of August and the remaining $2,000 will be paid next month.
Total Utility Expense (water, sewer, electrical) was paid in cash for $42,500.
3
Purchase and Sale of Inventory Items during August:
The golf course officially opened the Pro Shop on August 1, 2018. Journal Entries are needed for the
transactions involving Inventory sold in the Pro Shop. The weekly inventory sales and purchases
information is contained on the Inventory Purchases and Sales Worksheet tab in the Excel workbook.
Remember all inventory purchases are on credit (Accounts Payable) and all sales are on credit
(Accounts Receivable)
The cash collected or paid related to inventory will be recorded during
September 2018.
The sales and inventory transaction involve 3 types of entries:
1. Record the total purchases for the month of August. All inventory purchases are acquired on
credit (accounts payable). All payments for purchases are due at the beginning of the
following month.
2. Record the total sales for the month of August. All sales made at the Pro Shop are sold on
account (accounts receivable). The accounts receivable are due at the beginning at the
following month. Use the Accounts Receivable and Sales Revenue accounts for these
transactions.
3. Calculate the total Cost of Goods Sold for the month of August. To make this calculation you
will need to complete the FIFO Inventory and Cost of Goods Sold Worksheet tab in the Excel
workbook. Remember on the worksheet you are calculating the Cost of Goods Sold (not the
sales). After completing the FIFO Inventory and Cost of Goods Sold Worksheet, prepare the
journal entry to record the total Cost of Goods for the month of August.
August 2018 – Month End Adjusting Entries:
• Accrue the interest for the month of August on the Note Payable. Since the note was paid
down $30,000 on August 1
st, the interest calculation is based on the new outstanding
principal for the month. (To calculate the interest, use the new outstanding principal
balance and calculate the new interest expense using the 5% interest rate. (adjusted to
equal a single month rate).
• Recognize the revenue earned from the lessons begun at the beginning of the month.
Remember you collected golf lesson fees in July for lessons that began in August. (Four
weeks of lesson were taught in August so recognize 4 weeks’ worth of revenue out of the
6 total weeks). Use the Golf Lesson Revenue account with this transaction.
• Bear Creek Country Club, LLC had additional golf course maintenance expenses of
$1,300 at the end of August to be paid in September.
• Adjust Prepaid Insurance for the amount used in August.

4

August 31, 2018: Preparation of August Bank Reconciliation:
The golf course received the bank statement for August 2018 from its bank during the first week
of June 2018. You need to prepare the bank reconciliation for August by reconciling the cash
balance shown on the bank statement with the unadjusted cash balance in the general ledger
cash account.
The bank statement at August 31, 2018 showed the cash balance was $207,950. The general
ledger showed the
unadjusted cash balance in the general ledger cash account at August
31, 2018 was $210,550. (Use the Bank Reconciliation tab of the Excel workbook).
An examination of the bank statement disclosed the following:
1. Outstanding checks totaled $430.
2. The bank had issued a $1,480 debit memo for three insufficient funds (NSF)
checks.
3. The bank statement enclosures included a debit memo for $55 that had been
deducted from the Bear Creek Country Club, LLC account to pay for new checks.
Record the $55 charge to Bank Service Charges in the general ledger.
4. The bank statement showed a check was written for $500. The check register
showed that Bear Creek Country Club, LLC had recorded the check as $50. It
should have been recorded on Bear Creek Country Club, LLC’s books for $500.
The check was written for utility expenses.
5. Deposits in transit were $1,200.
Preparation of the Statement of Cash Flows:
Using the Cash account (T- account in the General Ledger), prepare a Statement of
Cash Flows for the month of April 2018. Use the Statement of Cash Flows tab of the
Excel file provided in
MyAccountingLab> Shared Documents>
Project Check Figure
For small business, one of the key internal controls is the preparation of the month end
bank reconciliation.
The True Cash Balance for the project is $208,565. This
balance
appears in three places on the project. First, it is the August ending balance
on the bank reconciliation
. Second, it is the ending general ledger balance for the cash
account (remember you need to post your bank reconciliation journal entries into the
Double Entry software).
Finally, this is the ending cash balance that shows on the
August 31 Statement of Cash Flows.

5
Complete Project and Turn in to the Tutor Room 1100
(Due Thursday, November 15, 2018)
Documents to print from the Double Entry Software:
Print off the following statements from the accounting software after all the transactions have been
entered. All the statements can be printed by opening them from the
Display menu and selecting
File>Print. Make sure the correct date range is selected (if your Trial Balance is blank, it might be
that the date is wrong)
.
Journal
Trial Balance
Income Statement
Balance Sheet
Running balance Ledger for Cash account
Documents to print from the Excel Workbook:
Bank Reconciliation
FIFO Inventory Worksheet
Statement of Cash Flows
Order to staple documents when submitted for grading
Bank Reconciliation with student’s names and class times
Supporting Calculations
FIFO Worksheet
Journal
Running balance Ledger for Cash account
Trial Balance
Income Statement
Balance Sheet
Statement of Cash Flows
Financial Statement Analysis Questions (15 points)

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