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
|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
| 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.
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
|-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
|-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
|-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
|comprehensive problem will
serve you well in Advanced Accounting and the rest of your accounting