ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2012.
Question # 00005146
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Updated on: 12/11/2013 02:16 AM Due on: 12/24/2013
| 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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Rating:
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Solution: ABC Corporation is a new company