Reference no: EM131665989

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ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014.

Given on the first two tabs are ABC's 12/31/14 Unadjusted Trial Balance and a list of needed adjustments.

1. Make all 16 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 "12-31-14 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 UNADJUSTED BALANCES AS OF 12/31/14.

3. Once the 12/31/14 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 (some blank T-Accounts have already been provided for you). 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 21 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 being mindful of the four closing entries you've learned.

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 posted on your Post-Close T-Accounts. They will not automatically flow from tab-to-tab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "12-31-14 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "Post-Close T-Accounts." Just be sure to delete the original "Post-Close T-Accounts" tab already in the workbook before you do this since you can't have two worksheets with the same name.

7. The final step is the Post-Closing Trial Balance, which will use the ending balances from the 12/31/14 T-Accounts after posting your closing entries.

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, loss, or other temporary accounts.

- Check figure 1: Income from operations = $204,236.

- Check figure 2: Total Current Assets = $1,074,329.

- Check figure 3: Total Liabilities & Stockholders' Equity = $1,593,851.

- Check figure 4: Cash flow provided by operating activities = $115,785.

- Check figure 5: Post close Trial Balance debit and credit columns total $1,672,010.

- Check figure 6: Cash flow provided by financing activities $1,200,268.

- 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").

Attachment:- Comprehensive Problem.xlsx