Read ALL instructions before getting started!
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 12 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, and Balance Sheet.
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. For purposes
of the Balance Sheet, be sure to prepare a classifed Balance Sheet. Link your financial statements to your Adjusted Trial Balance.
If necessary, review financial statement preparation in Chapters 4 and 5 of your textbook for a quick refresher.
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 “Post-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. (Helpful hint: After you have completed
and posted all of your adjusting entries, you can make a duplicate copy of your “12-31-12 T-Accounts” tab to replace the existing blank
“Post-Close T Accounts”when posting your closing entries.)
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.
-The Post-Closing Trial Balance should not have any revenue, expense, gain, or loss accounts.
-Check figure 1: Gross profit = $465,250.
-Check figure 2: Income before income taxes = $290,298.
-Check figure 3: Total Liabilities and Stockholders’ Equity = $988,302.
-Check figure 4: Adjusted Trial Balance debit and credit columns total $1,542,219.
-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 the rest of your accounting curriculum.