Accounting Cycle Project Spring 2017

ACC 301

Financial Reporting I

Spring 2017

Accounting Cycle Practice Set

 

 

Attached is the unadjusted trial balance for Surfs Up, Inc.

Instructions:

1.         Construct T-accounts and enter the balances shown.

2.         The following adjusting entries have been identified:

 

            a.         Bad debt expense is estimated to be $8,000.

b.         Annual depreciation expense on the Equipment is $16,000 and annual depreciation expense for building is $9,000.

c.         Prepaid Insurance is for 2 years of insurance paid on 1/1/14. Record the amount for 2014.

d.         The note payable ($270,000) has interest of 6% per year and the interest is payable on 1/1/15. Record the interest for 2014.

e.         Salaries and wages earned but unpaid as of year-end are $10,750 (sales) and $4,950 (administrative).

            f.          At year-end, $1,660 of Supplies remain on hand.

            g.         $10,000 of the unearned rent revenue was earned as of 12/31/14. 

h.            Utilities expense incurred for December, but unpaid and unrecorded was $4,000.

i.          Assume no income tax expense and do not calculate earnings per share.

 

Prepare the adjusting journal entries (include explanations) and post the entries to the appropriate T-accounts (construct additional T-accounts as necessary).

 

3.         Prepare an adjusted trial balance.

 

4.         Prepare a classified balance sheet and a multiple-step income statement in good form.

 

5.         Prepare closing journal entries and post to the T-accounts.

 

6.         Prepare a post-closing trial balance.

 

You should use Excel or a similar spreadsheet program to prepare your work.  Your grade will be based on both the accuracy and the organization of your work product.  Please submit a hard copy of your work. (Submit adjusting journal entries, adjusted trial balance, classified balance sheet, multistep income statement, closing journal entries, post closing trial balance and your final T-accounts after posting closing entries)

 
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