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06155200: graded project instructions & worksheets 1 lesson 1:

PROJECT GOALThe goal of this graded project is to create the followingfinancial statements for J & L Accounting, Inc.:– Balance […]

PROJECT GOALThe goal of this graded project is to create the followingfinancial statements for J & L Accounting, Inc.:– Balance sheet-Income statement– Statement of retained earnings–Post-closing trial balanceThe financial statements must be created in one Microsoft Word document . Alternatively, an Excel workbook may be used . The Word or Excel file will be uploaded for grading.INSTRUCTIONSAt the end of the project, you’llbe given instructions for creating and uploading the financialstatements in a Word or Excel file for grading.
Graded Project InstructionsNote: The formatting of financial statements is important.They follow Generally Accepted Accounting Principles (GAAP),which creates a uniformity of financial statements for analyzing.This allows for an easier comparison, as all businessesfollow GAAP. Therefore, the financial statements should becreated exactly the same way shown or referenced in the textbook.Failure to do so will result in a loss of points.The project references “debits equaling credits.” This is a fundamentalprinciple of accounting that can’t be violated and ifso is not acceptable under any circumstance. Debits notequaling credits allows for “cooking of the books,” which ispresenting false information. It also allows for embezzlement,which is theft by management or employees. If debits don’tequal credits, the cause may be a lack of understanding ofaccounting principles, such as those presented in the textbookand assigned homework problems, or a lack of focus and concentration when making journal entries, posting toledger accounts, or completing math. Remember—instructorsare available to help you with material you may be struggling with. Mistakes of the lack-of-focus variety are best correctedby going back over the work 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 and if so is completely unacceptable. When the equation doesn’t balance and the numbers are “fudged,” this is easily detectable by someone who knows accounting. 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 from the prioraccounting period for J & L Accounting, Inc.:a) Post-closing trial balanceb) Balance sheetc) Income statementd) Statement of retained earnings2Graded Project 3J & L Accounting, Inc.Post-Closing Trial BalanceDecember 31, 2012BALANCEACCOUNT TITLE DEBIT CREDITCash, Business Checking 20,500.00Accounts ReceivablePrepaid RentVehicles 48,000.00Accumulated Depreciation, Vehicles 12,000.00Equipment 3,600.00Accumulated Depreciation, Equipment 600.00Accounts PayableCommon Stock 38,000.00Retained Earnings 21,500.00DividendsService RevenueAdvertising ExpenseRent ExpenseOffice Supplies ExpenseTelephone ExpenseUtilities ExpenseDepreciation ExpenseTOTALS 72,100.00 72,100.00J & L Accounting, Inc.Balance SheetAs of December 31, 2012ASSETSCash, Business Checking 20,500.00Accounts Receivable 0.00Prepaid Rent 0.00Vehicles 48,000.00Less: Accumulated Depreciation, Vehicles 12,000.00 36,000.00Equipment 3,600.00Less: Accumulated Depreciation, Equipment 600.00 3,000.00TOTAL ASSETS 59,500.00LIABILITIESAccounts Payable 0.00TOTAL LIABILITIES 0.00STOCKHOLDERS’ EQUITYCommon Stock 38,000.00Retained Earnings 21,500.00TOTAL STOCKHOLDERS’ EQUITY 59,500.00TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 59,500.00Business, 4 Accounting, and YouGraded Project 5J & L Accounting, Inc.Income StatementFor the Month Ending December 31, 2012REVENUESService Revenue 10,275.00EXPENSESAdvertising Expense 2,300.00Rent Expense 1,000.00Office Supplies Expense 300.00Telephone Expense 750.00Utilities Expense 3,200.00Depreciation Expense 1,100.00TOTAL EXPENSES 8,650.00NET INCOME 1,625.00J & L Accounting, Inc.Statement of Retained EarningsFor the Month Ending December 31, 2012Retained Earnings, December 1, 2012 19,875.00Add: Net Income 1,625.00Subtotal 21,500.00Less: Dividends 0.00Retained Earnings, December 31, 2012 21,500.00

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