ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2012.

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Description

ABC
Corporation is a new company that buys and sells office supplies. Business began on January 1, 2012.
Given on the first two tabs
are ABC’s 12/31/12 Unadjusted Trial Balance and a list of needed adjustments.
1. Make all 14 adjustments on the
“Adjusting Journal Entries” tab.
Remember to include a description under each journal entry.
2. Post the adjustments to the general ledger
on the “12-31-12 T-Accounts” tab.
You may have to add T-Accounts for new accounts.
Link your T-Account entries to your
Journal Entries. PLEASE NOTE THAT THE
“BB” (BEGINNING BALANCES) FOR THE
T-ACCOUNTS REPRESENT THE BALANCES AS OF
12/1/12.
3. Once the 12/31/12 T-Accounts are complete,
prepare the Adjusted Trial Balance.
There may be some accounts with zero dollars, and you
may have to insert lines for new
accounts. Link the Adjusted Trial
Balance to your T-Accounts.
4. Use the Adjusted Trial Balance numbers to
complete the Income Statement, Statement of Retained Earnings, Balance Sheet,
and Statement of Cash Flows.
For purposes of the Income Statement,
prepare using the multiple step format and assume that Rent Revenue, any
Unrealized Holding Gains/Losses,
Interest Expense, Interest Revenue, and
any other Gains/Losses are NOT part of the major central ongoing operations
of the company.
Link your financial statements to your
Adjusted Trial Balance. Use the Income
Statement and Balance Sheet to finish the partially completed Statement
of Cash Flows. Since this is ABC’s first year of
operations, several line items on the Statement of Cash Flows have already
been supplied to you.
If necessary, review financial statement
preparation in Chapters 4 and 5 of your textbook for a quick refresher. Plan on using your knowledge gained in
completing Chapter 23 to help with the
preparation of the Statement of Cash Flows.
Additionally, since this is ABC Corporation’s first year of
operations,
the adjusted trial balance for all
current assets and liabilities represents the change during the year for
Statement of Cash Flows analysis purposes.
5. When the Financial Statements are complete,
make the closing entries on the “Closing Entries” tab.
6. When closing entries have been made, post
the entries to the general ledger on the “After-Close T-Accounts”
tab. Make sure your adjusting
journal entries are also on your
After-Close T-Accounts. They will not
automatically flow from tab-to-tab.
7. The final step is the Post-Closing Trial
Balance, which will use the ending balances from the 1/1/13 T-Accounts.
8.
Double-check your work. Here
are a few things to check for:
-Adjusted Trial Balance: Make sure debit column and credit column
total to the same figure at the bottom.
-Net income from the income
statement will flow through to the Statement of Retained Earnings.
-Ending Retained Earnings from
the Statement of Retained Earnings will flow through to the Balance Sheet.
-Ending Cash balance from the
Balance Sheet should match your ending Cash balance on the Statement of Cash
Flows.
-The Post-Closing Trial
Balance should not have any revenue, expense, gain, or loss accounts.
-Check figure 1: Gross profit = $372,450.
-Check figure 2: Income before income taxes = $208,147.
-Check figure 3: Total Assets = $906,151.
-Check figure 4: Cash flow provided by operating activities
= $2,840.
-Check figure 5: Adjusted Trial Balance debit and credit
columns total $1,520,008.
-Remember: Neatness matters in Financial
Statements. Print or Print Preview
before submitting to make sure your statements are neat.
Otherwise, management may send back to you
for revision!
-Include your work at the
bottom of each tab as needed.
-Ask questions prior to the
day/night before the due date. The due
date is clearly indicated on the course schedule.
-Utilize formulas and
worksheet linkings in your financial statements to improve accuracy and save
time in completing the assignment.
-Please take advantage of
Excel by using formulas to calculate groups of numbers (i.e. “Total
Liabilities and Stockholders’ Equity”).
Final comments: This project is intended to make sure that
you understand the accounting cycle as well as several key financial
accounting transactions that you have
studied during your
Intermediate Accounting series. It is
very important to take the necessary time on this project to master these
concepts. The concepts mastered in
this
comprehensive problem will
serve you well in Advanced Accounting and the rest of your accounting
curriculum.

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