Reference no: EM132461921

This part should not be inputted into SAP until you are done with the spreadsheet.

In this step, you will figure out the adjusting entries and then enter them into the trial balance spreadsheet first. All entries are dated January 31, 2020. This is imputed exactly as in SAP 1. I recommend doing entries as 5 separate entries rather than one compound entry.

Adjusting Entry Information:

Point 1. The building needs to be depreciated for the month of January. When the building was purchased, it had a book value of $100,000. It has a useful life of 40 years with a $23,200 salvage value with the straight-line method being used. (Post to SAP with 1-4)

Point 2. The office furniture needs to be depreciated for the month of January. When the office furniture was purchased, it had a book value of $20,000. It also has a useful life of 3 years with a $2,000 salvage value with the straight-line method being used. (Post to SAP with 1-4)

Point 3. The office equipment needs to be depreciated for the month of January. When the office equipment was purchased, it had a book value of $10,000. It has a useful life of 3 years with a $1,000 salvage value with the straight-line method being used. (Post to SAP with 1-4)

Point 4. The vehicle needs to be depreciated for the month of January. When purchased, it had a book value of $16,000. It has a useful life of 5 years with a $2,320 salvage value with the straight-line method being used. (You will be combining 1-4 into one entry for entering into SAP. Depr exp; Acc depr-fixed assets.)

Point 5. A count of supplies indicates that there is still $2,000 worth of supplies on hand. Run this adjustment through the Prepaid Supplies account. Cost center needed in SAP for Supplies expense.

Point 6. The rent expense for the month of January was paid for using the prepaid expense account. You prepaid for four months, and one month has passed and needs to be expensed. A cost center is needed in SAP for the Rent expense.

Point 7. The payroll liability for January 2020 needs to be accrued. There are 5 working days to accrue, use commissions (# 300600) for the payable in SAP.

Point 8. The interest for the month needs to be accrued on both the notes. The interest rate for the long term was 6% per annum, while the interest rate on the short term was 3% per annum. Use Miscellaneous expense (741000) and Payables Interest in SAP. A cost center is needed for Miscellaneous Expense.

• Using these adjustment entries and the Excel trial balance that I have put in blackboard and the lab drive, you will be working through the preparation of the firm's financial statements. After figuring out the journal entries, you will need to put the corresponding information in the adjusting entries column in the spreadsheet. Then prepare the correct values for the adjusted trial balance, Income statement, and Balance sheet columns. The retained earnings need to be moved into its own account in the balance sheet column. I have provided check figures on the spreadsheet. You can check your trial balance against mine if need be. Turn in your spreadsheet.

Now post the adjusting entries into SAP. (Same way as in SAP 1)

Step 1 Post the adjusting entries

problem 1. Using information from above, post the adjusting entries to SAP. You will do this the same way you posted the regular entries in SAP 1. Since the deprecation entries are going to the same place, please combine them into one entry. (Depr exp; Acc depr-fixed assets amount =1,138; cost center needed in SAP for depr exp). With the office supplies (Cost center needed in SAP), prepaid rent (Cost center needed in SAP), accrued payroll entries (Use commissions (# 300600) for payable), and interest (Use Miscellaneous expense; cost center needed in SAP) you will have five adjusting entries in SAP.