Accounts receivable is recorded at gross the allowance for

Reference no: EM13483987

Your assignment is to set up a journal and general ledger to account for transactions during 2011. This should all be set up in an Excel Workbook. You may use different worksheets but only one workbook. The general ledger can be comprised of a set of T-accounts.

To assist your preparation of financial statements, you should generate post-transaction (unadjusted), pre-closing (adjusted) and post-closing trial balances for each year. (A worksheet like you used in Accounting Principles 1 may be helpful.)

You should also create a set of financial statements (balance sheet, income statement, statement of cash flows and notes to the statements) for 2011. The balance sheet should also have a comparative for 2010.

You should have notes to the financial statements as necessary but as a minimum should include significant accounting policies, current assets, depreciable assets, and long-term debt.

Finally, compose a reflective paragraph describing your experience working on the Portfolio Project. Specifically, describe the concepts learned from this assignment and assess whether financial statements are easier to understand as a result of this assignment.

Background Information

The Widget Company is a small company with only a few employees. Its line of business is to purchase several items from a line of widgets and resale them to other companies. The Company owns one small shop with two rooms, one for sales and office work, and one for product receiving and shipping. The company is owned by a group of investors and it is organized as a corporation.

Widget Company uses a straight-forward financial accounting information system. Of course, accrual accounting is used. Other generally accepted accounting principles used are the $- Value LIFO of valuing product inventory, FIFO for valuing supplies, the straight-line depreciation method for matching the cost of long-term assets to periods of use (half year of depreciation in year of acquisition and disposition), and earnings per share. Widget's fiscal year extends from January 1 through December 31.

Additional information

Accounts receivable is recorded at gross. The Allowance for doubtful accounts is computed at 2% of ending accounts receivable. The Office supplies inventory is valued according to FIFO.

Reference no: EM13483987

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