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Ice Cream Systems The goal of this graded project is to create
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answer highlighted questions using this attachment. number response 1-14. Use correct formatting.


Ice Cream Systems

 

The goal of this graded project is to create the following financial statements for Ice Cream

 

Systems (ICS):

 

Balance sheet

 

Income statement

 

Post-closing trial balance

 

Note: It?s important to format financial statements properly. They must follow Generally

 

Accepted Accounting Principles (GAAP), which create a uniformity of financial statements for

 

analyzing. This allows for an easier comparison, as all businesses follow GAAP. Therefore, the

 

financial statements you create should replicate those in the textbook.

 

This project references ?debits equaling credits.? This is a fundamental principle of

 

accounting, and violation of this principle is not acceptable under any circumstance. If debits

 

don?t equal credits, it suggests that someone has ?cooked the books? or presented false

 

information. It also allows for

 

embezzlement. If debits don?t equal credits, the cause may be a lack of understanding of

 

accounting principles or carelessness when making journal entries, posting to the general

 

ledger accounts, or completing the math. Remember that instructors are available to help

 

you! If your mistakes are careless, go back over the work slowly until the error is found.

 

The accounting equation must balance on the balance sheet. This is another fundamental

 

principle of accounting that can?t be violated. Unbalanced equations are completely

 

unacceptable. When the equation doesn?t balance, it?s easily detectable by someone who

 

knows accounting, and it suggests the numbers have been ?fudged.? If your debits equal your

 

credits and you understand which general ledger accounts belong on which financial

 

statements, then the accounting equation should balance. It?s really all about understanding

 

the concepts and applying that understanding.

 

The following financial statements are provided for ICS:

 

Chart of Accounts

 

Post-Closing Trial Balance

 

Schedule of Accounts Receivable

 

Schedule of Accounts Payable

 

Schedule of Employer Payroll Taxes Allocation

 

Format for the Income Statement

 

Format for the Balance Sheet

 

Job Cost Record

 

Chart of Accounts

 

Assets (1000?1999)

 


 

Account Number

 


 

Account Title

 


 

1100

 


 

Cash

 


 

1200

 


 

Accounts Receivable

 


 

1300

 


 

Direct Materials

 


 

1350

 


 

Indirect Materials and Factory Supplies

 


 

1400

 


 

Work in Process

 


 

1500

 


 

Finished Goods

 


 

1600

 


 

Prepaid Advertising

 


 

1650

 


 

Prepaid Insurance

 


 

1700

 


 

Office Supplies

 


 

1800

 


 

Factory Equipment

 


 

1800.1

 


 

Accumulated Depreciation?Factory Equipment

 


 

1850

 


 

Office Equipment

 


 

1850.1

 


 

Accumulated Depreciation?Office Equipment

 


 

Liabilities (2000?

 

2999)

 

2100

 


 

Accounts Payable

 


 

2200

 


 

Salaries Payable

 


 

2300

 


 

Federal Withholding Tax (FWT) Payable

 


 

2325

 


 

FICA Tax Payable

 


 

2350

 


 

FUTA Tax Payable

 


 

2375

 


 

SUTA Tax Payable

 


 

2500

 


 

Unearned Revenue

 


 

(Continued)

 

Owner?s Equity (3000?

 

3999)

 

3100

 


 

Common Stock ($10 Par)

 


 

3150

 


 

Paid-In Capital in Excess of Par?Common

 

Stock

 


 

3700

 


 

Retained Earnings

 


 

3900

 


 

Income Summary

 


 

Revenues (4000?4999)

 

4100

 


 

Sales

 


 

4200

 


 

Sales Discounts

 


 

Expenses (5000?5999)

 

5100

 


 

Cost of Goods Sold

 


 

5150

 


 

Factory Overhead

 


 

5200

 


 

Sales Salaries Expense

 


 

5225

 


 

Officers? Salaries Expense

 


 

5250

 


 

Office Salaries Expense

 


 

5300

 


 

Rent Expense

 


 

5350

 


 

Advertising Expense

 


 

5400

 


 

Utilities Expense

 


 

5450

 


 

Office Supplies Expense

 


 

5500

 


 

Postage Expense

 


 

5550

 


 

Telephone Expense

 


 

5575

 


 

Insurance Expense

 


 

5600

 


 

Depreciation Expense

 


 

5700

 


 

Payroll Tax Expense

 


 

5800

 


 

Bad Debt Expense

 


 

5900

 


 

Miscellaneous Expense

 


 

I

 

C

 

E

 

C

 

R

 

E

 

A

 

M

 

S

 

Y

 

S

 

T

 

E

 

M

 

S

 

T

 

r

 

i

 

a

 

l

 

B

 

a

 

l

 

a

 

n

 

c

 

e

 

J

 

a

 

n

 

u

 

a

 

r

 

y

 

1

 

,

 

2

 


 

0

 

?

 

A

 

C

 

C

 

O

 

U

 

N

 

T

 


 

D D

 


 

N

 

O

 

.

 

1

 

1

 

0

 

0

 


 

C $

 


 

1

 

2

 

0

 

0

 


 

A 5

 


 

1

 

3

 

0

 

0

 

1

 

3

 

5

 

0

 


 

D 6

 

I 1

 


 

1

 

4

 

0

 

0

 


 

F

 

1

 

W

 


 

1

 

5

 

0

 

0

 


 

F 2

 


 

1

 

6

 

0

 

0

 


 

P ?

 


 

1

 


 

P ?

 


 

6

 

5

 

0

 

1

 

7

 

0

 

0

 


 

O 3

 


 

1

 

8

 

0

 

0

 


 

F 2

 


 

1800

 

.1

 

Accumulated Depreciation?

 

Factory Equipment 99,653.35

 

1850 Office Equipment 38,567.00

 

1850.1 Accumulated Depreciation?

 

21

 

00

 


 

Office Equipment

 

Accounts Payable

 


 

9,814.00

 


 

22

 

00

 


 

Salaries Payable

 


 

?

 


 

23

 

00

 


 

FWT Payable

 


 

1,613.11

 


 

23

 

25

 


 

FICA Tax Payable

 


 

822.68

 


 

23

 

50

 


 

FUTA Tax Payable

 


 

1,032.39

 


 

23

 

75

 


 

SUTA Tax Payable

 


 

1,871.20

 


 

25

 

00

 


 

Unearned

 

Revenue

 


 

?

 


 

31

 


 

Common Stock

 


 

350,000.

 


 

00

 


 

($10 Par)

 


 

00

 


 

18,845.66

 

31

 

50

 

Paid-In Capital in Excess of

 

Par?Common 32,500.00

 

3700 Retained Earnings 192,575.09

 

TOTALS $708,727.48 $708,727.48

 


 

ICE CREAM SYSTEMS

 

Schedule of Accounts Receivable

 

January 1, 20?

 

Name

 


 

Balance

 


 

Horsfield Happy Ice Cream

 


 

$17,345.00

 


 

Messina Missions

 


 

9,458.00

 


 

Ashman Alcove Designs

 


 

24,681.00

 


 

Day Dreamer?s Ice Cream

 


 

0.00

 


 

Total Accounts Receivable

 


 

$51,484.00

 


 

ICE CREAM SYSTEMS

 

Schedule of Accounts Payable

 

January 1, 20?

 

Name

 


 

Balance

 


 

O-Ring Enterprises

 


 

$6,941.00

 


 

Smith Synthetics

 


 

0.00

 


 

Rockaway Metal

 


 

2,873.00

 


 

OfficeMax

 


 

0.00

 


 

Total Accounts Payable

 


 

$9,814.00

 


 

ICE CREAM SYSTEMS

 

Schedule of Employer

 

Payroll Tax Allocation

 

January 31, 20?

 

Employer Payroll Taxes

 


 

Job

 


 

Wag

 

es

 


 

FWT

 

(15%

 

)

 


 

Direct Labor Totals

 


 

Sales Salaries

 

Officers? Salaries

 

Office Salaries

 


 

Totals

 

EXAMPLE COMPANY

 

Income Statement

 

For the Period Ending January 31, 20XX

 

Operating Revenue

 

Sales

 


 

$

 


 

FICA

 

(7.65

 

%)

 


 

FUTA

 

(0.8%

 

)

 


 

SUTA

 

(1.45

 

%)

 


 

Total

 

Employer

 

Taxes

 


 

Net

 

Pay

 


 

Less: Sales Discounts

 


 

XXXXX.X

 

X

 

XXX.XX

 


 

Total Operating

 

Revenue

 

Cost

 

COGS?Cost of Goods

 

Sold

 


 

$

 

XXXXX.XX

 

XXXXX.X

 

X

 


 

Total Cost

 


 

XXXXX.XX

 


 

Gross Profit

 


 

XXXXX.XX

 


 

Operating Expenses

 

Sales Salaries Expense

 


 

XXXXX.X

 

X

 


 

Officers? Salaries

 

Expense

 


 

XXXXX.X

 

X

 


 

Office Salaries Expense

 


 

XXXXX.X

 

X

 


 

Rent Expense

 


 

XXXXX.X

 

X

 


 

Advertising Expense

 


 

XXXXX.X

 

X

 


 

Utilities Expense

 


 

XXXXX.X

 

X

 


 

Office Supplies Expense

 


 

XXXXX.X

 

X

 


 

Postage Expense

 


 

XXXXX.X

 

X

 


 

Telephone Expense

 


 

XXXXX.X

 

X

 


 

Insurance Expense

 


 

XXXXX.X

 

X

 


 

Depreciation Expense

 


 

XXXXX.X

 


 

X

 

Payroll Tax Expense

 


 

XXXXX.X

 

X

 


 

Bad Debt Expense

 


 

XXXXX.X

 

X

 


 

Miscellaneous Expense

 


 

XXXXX.X

 

X

 


 

Total Operating

 

Expenses

 


 

XXXXX.XX

 


 

Net Profit/(Loss)

 


 

$XXXXX.X

 

X

 


 

EXAMPLE COMPANY

 

Balance Sheet

 

As of January 31, 20?

 

ASSETS

 

Current Assets

 

Cash

 


 

$XXXXX.X

 

X

 


 

Accounts Receivable

 


 

XXXX.XX

 


 

Direct Materials

 


 

XXXX.XX

 


 

Indirect Materials and Factory Supplies

 


 

XXXX.XX

 


 

Work In Process

 


 

XXXX.XX

 


 

Finished Goods

 


 

XXXX.XX

 


 

Prepaid Advertising

 


 

XXXX.XX

 


 

Prepaid Insurance

 


 

XXXX.XX

 


 

Office Supplies

 


 

XXXX.XX

 


 

Total Current Assets

 

Property, Plant & Equipment

 


 

$XXXXX.X

 

X

 


 

Factory Equipment

 


 

$XXXXX.

 

XX

 


 

Less: Accumulated Depreciation? Factory

 

Equipment

 


 

XXXXX.X

 

X

 


 

Office Equipment

 


 

XXXX.XX

 


 

Less Accumulated Depreciation? Office

 

Equipment

 


 

XXXX.XX

 


 

XXXXX.XX

 


 

XXXX.XX

 


 

Total Property Plant & Equipment

 


 

XXXXX.XX

 


 

TOTAL ASSETS

 


 

$XXXXX.X

 

X

 


 

LIABILITIES

 

Accounts Payable

 


 

$XXXX.XX

 


 

Salaries Payable

 


 

XXXX.XX

 


 

FWT Payable

 


 

XXXX.XX

 


 

FICA Tax Payable

 


 

XXXX.XX

 


 

FUTA Tax Payable

 


 

XXXX.XX

 


 

SUTA Tax Payable

 


 

XXXX.XX

 


 

Unearned Revenue

 


 

XXXX.XX

 

$XXXXX.X

 

X

 


 

TOTAL LIABILITIES

 

STOCKHOLDERS? EQUITY

 

Common Stock ($10 Par)

 


 

$XXXXXX.

 

XX

 


 

Paid-In Capital in Excess of Par?Common Stock

 


 

XXXXXX.X

 

X

 


 

Retained Earnings

 


 

XXXXXX.X

 

X

 


 

TOTAL STOCKHOLDERS? EQUITY

 


 

XXXXXX.X

 


 

X

 

TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY

 


 

$XXXXXX.

 

XX

 


 

The following is the background information necessary for completion of the accounting

 

period as it relates to Ice Cream Systems Inc. (ICS):

 

ICS manufactures and sells ice cream machines, refrigeration systems, and parts for these

 

systems. It manufactures all machines and parts in a single production department.

 

As the controller of the company, you are responsible for daily accounting operations,

 

adjusting and closing the monthly accounting periods, and preparation of financial

 

statements.

 

ICS operates on a calendar-year basis from January 1st to December 31st with a monthly

 

accounting period. It uses a job-order cost system.

 

Jobs that are in process are recorded on Job Cost Records. Records are maintained for each

 

job. New jobs are assigned numbers sequentially. They contain the accumulated costs for

 

direct material, direct labor, and factory overhead. (For the purposes of this project, it?s

 

assumed that all jobs prior to the current accounting period are either in process or complete

 

and all resulting entries have been made in the previous accounting period.)

 

ICS makes all journal entries in the General Journal. No special journals are used.

 

For purposes of this project, cash doesn?t need to be rec- onciled to a bank statement.

 

Information related to Payroll:

 

Payroll is paid monthly on the last day of each month. Therefore, there is no accrual for

 

payroll.

 

Gross pay for direct labor goes to Finished Goods or Work in Process if appropriate.

 

Salaries for non-factory workers go to the appropriate salary expense accounts.

 

The company?s salesperson works on 10% straight commission of sales during the month.

 


 

Federal Withholding Tax is 15% of gross pay for everyone and is recorded whenever gross pay

 

is recorded. FWT is remitted monthly for the previous month.

 

There are no deductions for state or local withholding tax.

 

FICA tax rate is 7.65% of gross pay. (FICA is Social Security and Medicare.) Since this is the

 

first month of the new year, no one will reach the Social Security limit. FICA is remitted

 

monthly for the previous month.

 

FUTA tax rate is 0.8% of gross wages with no limit. SUTA tax rate is 1.45% of gross wages with

 

no limit. FUTA and SUTA are paid yearly in January (for the previous year).

 


 

There are no other miscellaneous deductions, such as union dues.

 

All employer payroll taxes (employer?s portion of FICA, FUTA, and SUTA) are recorded on the

 

last day of the month.

 

Employer payroll taxes related to factory workers go to Factory Overhead.

 

Employer payroll taxes related to all non-factory workers go to Payroll Tax Expense.

 

ICS has two material accounts:

 

Direct Materials

 

Indirect Materials and Factory Supplies

 

Factory Overhead is applied to each job at 25% of direct labor costs for that job.

 

Debits to Factory Overhead represent actual overhead, and credits represent applied

 

overhead. The difference between actual and applied factory overhead is insignifi- cant and

 

should be closed out to Cost of Goods Sold as an adjusting entry at the end of each month.

 


 

Markups to determine the selling price of a job for ICS are 150% of estimated job costs. All

 

sales are exempt from sales tax, as ICS sells locally to resellers.

 

Shipping is not a consideration for the purposes of this project.

 

ICS uses a perpetual inventory system. When a sale is made, debit Cost of Goods Sold and

 

credit Finished Goods for the cost of the job.

 

All sales are on account with terms of net 30 days. No discounts are given.

 

All cash/checks received are deposited in the Cash account.

 

No separate bank account is kept for payroll.

 

Direct materials, indirect materials, and factory supplies are purchased on account.

 

Terms from all vendors for expenses are net 30 days.

 

Factory Supplies are added to the Indirect Materials and Factory Supplies general ledger

 

account.

 

A periodic inventory system is used for office supplies with all purchases going to inventory.

 

All payments?referred to as cash or check?are made by check from the Cash Account. (For

 

purposes of this project, no check register or checks will be given. No reconciliation of the

 

cash account will be required. Assume that all checks are written.

 

1Set up the General Ledger accounts, Accounts Receivable, and Accounts Payable accounts.

 

Use the following blank forms (make as many copies as necessary). Insert the beginning

 

balances from the Trial Balance and Schedules of Accounts Receivable and Payable.

 

1. Journalize the following entries for the month of January in the General Journal. Use the

 

following blank forms (make as many copies as necessary). When using the Work in Process

 

account, be sure to post to the appropriate Job Cost Record.

 

Narrative of Transactions

 


 

January 2?Paid Mass Media $4,200.00 for

 

prepaid advertising in local newspapers for

 

the next 12 months.

 

January 2?Paid Pierce Properties $2,750.00

 

for January rent. Of this amount, 25% is for

 

office facilities and 75% is for factory

 

facilities.

 

January 2?Paid Owen?s Insurance $6,000.00

 

for prepaid insurance for the first quarter of

 

the year.

 

January 3?Received a check from Horsfield

 

Happy Ice Cream as partial payment on

 

account in the amount of $5,000.00.

 

January 3?Paid Rockaway Metal the balance

 

of $2,873.00 on account.

 

January 4?Sold two ice cream systems to

 

Day Dreamer?s Ice Cream. The estimated

 

direct labor is

 

$8,200.00. The estimated direct material is

 

$3,350.00. The estimated indirect material is

 

$350.00. Day Dreamer?s is to be billed in the

 

amount of $20,925.00 on account. A check

 

for $5,000.00 will be collected as a deposit

 

against that sale. The start date will be

 

January 7th. The date promised will be

 

January 23rd. Assign the contract to Job 74.

 

January 5?Mountain Swirl Ice Cream

 

purchased and took delivery of one ice cream

 

machine for

 

$7,500.00. Record the sale and the cost of

 

the sale. Markup is 150% of cost. Transfer

 

cost from Finished Goods to COGS.

 

January 6?Purchased indirect material on

 

account from Electrical Systems Corp. in the

 

amount of

 

$3,643.00. Set up a new Accounts Payable

 

account, and record the purchase.

 

January 6?Purchased factory supplies on

 

account from Grommet Supplies in the

 

amount of

 

$847.21. Set up a new Accounts Payable

 

account, and record the purchase.

 


 

January 9?Assign the manufacture of one ice

 

cream machine to Job 75. A direct material

 

requisi- tion shows $1,450.00 of direct

 

materials, and an indirect materials

 

requisition shows $170.00 of indirect

 

materials. A time card shows $3,650.00 of

 

direct labor for the completed job. Factory

 

overhead is based on 25% of direct labor

 

cost. Transfer the completed job from Direct

 

Material and Indirect Material to the Finished

 

Goods account. When making the journal

 

entry for applying direct labor, debit Finished

 

Goods for the gross pay and credit FWT

 

Payable and FICA Tax Payable for the

 

appropriate amounts with the net pay going

 

to Salaries Payable.

 

January 10?Receive a check from Horsfield

 

Happy Ice Cream as partial payment on

 

account in the amount of $5,000.00.

 

January 10?Receive a phone bill in the

 

amount of $1,402.22 from Unique Telephone

 

Systems on account.

 

January 15?Paid Liberty Bank $2,435.79 for

 

December payroll taxes payable for the

 

amounts of FWT Payable, $1,613.11; FICA Tax

 

Payable, $822.68.

 

January 15?Assign Job 76 to Cold

 

Refrigeration for the purchase of a

 

refrigeration system. The start date will be

 

January 16th. The completion date will be no

 

later than February 28th. The esti- mated

 

direct material is $9,175.00. The estimated

 

indirect material is $1,860.00. The estimated

 

direct labor is $15,600.00. The contract

 

amount is $45,800.00. A deposit of

 

$10,000.00 was pro- vided by Cold

 

Refrigeration in signing the contract. The

 

deposit is unearned revenue. Half of the

 

contract will be billed upon 50% completion

 

with the deposit applied against that billing

 

with the remaining amount due immediately.

 

A quarter of the contract will be billed upon

 

75% completion of the contract with the

 

amount due immediately. The remaining

 

amount of the contract is to be billed when

 

the job is 100% complete and is payable

 

within 30 days of the billing.

 


 

January 16?Purchased $4,441.00 of factory

 

supplies from Johnston Equipment paid in

 

cash.

 

January 16?Purchased $2,965.00 of direct

 

materials from Smith Synthetics on account.

 

January 16?Purchased $427.50 of office

 

supplies from OfficeMax on account.

 

January 19?Apply from direct materials

 

requisition $2,800.00 of direct materials.

 

Apply from indi- rect materials requisition

 

$325.00 of indirect materials. Apply from

 

time cards $7,950.00 of direct labor to

 

Job 74 completing the job. Applied factory

 

overhead is based on 25% of direct labor

 

cost. Transfer the completed job to the

 

COGS account from Direct Material and

 

Indirect Material and Factory Overhead

 

accounts. When making the journal entry

 

for applying direct labor, debit COGS for

 

the gross pay and credit FWT Payable and

 

FICA Tax Payable for the appropriate

 

amounts with the net pay going to

 

Salaries Payable.

 

January 20. ?Paid the electric bill from

 

Susquehanna Electric in the amount of

 

$2,356.21 for the month of December.

 

Allocate 30% to Factory Overhead.

 

January 20?Paid the FUTA Tax Payable for

 

the previous year.

 

January 20?Paid the SUTA Tax Payable

 

for the previous year.

 

January 23?Ashman Alcove Designs paid

 

the balance on account.

 

January 27?Paid O-Ring Enterprises the

 

balance owed on account.

 

January 27?Paid post office $300.00 cash

 

for postage added to postage meter.

 

January 28?Apply from direct materials

 

requisition $4,600.00 of direct materials.

 

Apply from indirect materials requisition

 


 

$950.00 of indirect materials. Apply

 

$8,000.00 (from time cards) of direct

 

labor and factory overhead to Job 76,

 

completing 50% of the job. Factory

 

overhead is based on 25% of direct labor

 

cost. Transfer the partially completed job

 

from Direct Material and Indirect Material

 

to WIP. When making the journal entry for

 

applying direct labor, debit WIP for the

 

gross pay and credit FWT Payable and

 

FICA Tax Payable for the appropriate

 

amounts with the net pay going to

 

Salaries Payable. Set up the accounts

 

receivable and bill Cold Refrigeration for

 

50% of the contract on account, applying

 

the initial $10,000.00 deposit against the

 

billing.

 

January 29?Received a check from Cold

 

Refrigeration in the amount of $9,976.25

 

on account.

 

January 31?Received the following data

 

for the monthly payroll: Direct labor

 

(already recorded) $19,600.00 Sales

 

commission 5,132.50

 

Officers? salaries 5,000.00

 

Office salaries 1,920.00

 

Record the monthly payroll. Direct labor

 

payroll has already been recorded, as it

 

was incurred in January. Debit other

 

salary expense accounts for the

 

appropriate amounts; credit FWT Payable

 

for 15% of gross pay; credit FICA Tax

 

Payable for 7.65% of gross pay; and

 

credit Salaries Payable for the net pay.

 

Record the payroll taxes imposed on the

 

employer for all personnel for the month

 

of January. (Prepare the ?Schedule of

 

Employer Payroll Taxes Allocation? using

 

the appropriate

 

tax rates.)

 

January 31?Received a check from

 

Messina Missions for the balance on

 

account.

 

January 31?Received a check from

 

Horsfield Happy Ice Cream for the

 

remaining balance on account.

 


 

January 31?Paid all employee wages

 

earned in January.

 

3Post the general journal entries to the General Ledger, the Accounts Receivable Ledger, and

 

the Accounts Payable Ledger. Use the Post Ref. column to ensure that each line item of the

 

journal entries is posted correctly to each general ledger account. Posting from the journal to

 

the ledger is nothing more than rearranging the information; however, focus and concentrate

 

because it?s easy to make a mistake.

 

4Calculate the balances in the general ledger accounts. Use an Excel spreadsheet or a

 

printing calculator to run the numbers several times. Don?t use a hand-held calculator, as it?s

 

far too easy to make a mistake using it.

 

5Prepare the Schedules of Accounts Receivable and Accounts Payable.

 

6Prepare an Unadjusted Trial Balance using the balances from the general ledger accounts.

 

7Journalize the following adjusting entries in the general journal.

 

Adjusting Entries

 

January 31?Expense Prepaid Advertising for the month of January.

 

January 31?Expense Prepaid Insurance for the month of January.

 

January 31?Office supplies physical inventory as of January 31 is $276.21.

 

January 31?Depreciation for the month of January for Factory Equipment is $2,987.12.

 

Depreciation for Office Equipment is $266.99.

 

January 31?Close out Factory Overhead of $190.24 to Cost of Goods Sold.

 

8Post the adjusting journal entries to their respective ledger accounts, and calculate new

 

balances for those accounts.

 

9Prepare an Adjusted Trial Balance using the balances from the general ledger accounts. Use

 

the blank form provided in step six.

 

10Prepare an Income Statement following the formats shown in the Example Company

 

Statements using the following blank form as a worksheet:

 

11Journalize and post the closing journal entries in the general journal.

 

Jan. 31?Prepare closing entries to close revenue and expense accounts to Income Summary,

 

and transfer the net income to Retained Earnings.

 

12Post the closing journal entries to the respective ledger accounts, and calculate new

 

balances for those accounts.

 

13Prepare a Post-Closing Trial Balance using the balances from the general ledger accounts.

 

Use the blank form that was provided in step six.

 


 

14From the Post-Closing Trial Balance, create the Balance Sheet following the formats shown

 

in the Example Company Statements using the following blank form as a worksheet

 


 

 







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