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. 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. 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. 5. When the Financial Statements are complete, make the closing entries. 6. When closing entries have been made, post the entries to the general ledger on the "Post-Close T-Accounts" tab. 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.
- 2 x % Cut Autosum A Fill 2 Clear Sort & Filter Editing Find & Select AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 Fax A B C D E F G H I J K L M N 1 On March 1, ABC purchased a one-year liability insurance policy for $98,400. Upon purchase, the following journal entry was made: Dr Prepaid insurance 98,400 Cr Cash 98,400 The expired portion of insurance must be recorded as of 12/31/14. Notice that the expired portion from March through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. | O 2 Depreciation expense must be recorded for the month of December. The building was purchased with cash on February 1, 2014 for $150,000 with a remaining useful life of 30 years and a salvage value of $6,000. The method of depreciation for the building is straight-line. The equipment was purchased with cash on February 1, 2014 for $60,000 with a remaining useful life of 5 years and a salvage value of $3,000. The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November. 3 On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent. The entry made on December 1 was as follows: Dr Cash 36,000 Cr Unearned rent revenue 36,000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14. N Instructions Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries Ready Num Lock 2 K 12-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement II Statemeri BOJ 100% 0 + - 2 x % Cut Autosum A X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 fx A B C D E F G H I J K L M N s-% , to 13 Formation at a stable stories insert Fill 2 Clear Sort & Filter Editing Find & Select O 3 On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent. The entry made on December 1 was as follows: Dr Cash 36,000 Cr Uneamed rent revenue 36,000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14. 4 Per timecards, from the last payroll date through December 31, 2014, ABC's employees have worked a total of 250 hours. Including payroll taxes, ABC's wage expense averages about $51 per hour. The next payroll date is January 5, 2015. The liability for wages payable must be recorded as of 12/31/14 5 On November 30, 2014, ABC borrowed $235,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months on February 28, 2015), along with interest computed at an annual rate of 6%. The entry made on November 30 to record the borrowing was: (for Statement of Cash Flow purposes, consider a financing item) Dr Cash 235,000 Cr Notes payable 235,000 On February 28, 2015 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/14 must be accrued on the $235,000 note. Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 1 2-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement Ready Instructions Num Lock 2 Statemeri BOJ 100% 0 + - 2 x % Cut Autosum A Fill 2 Clear Sort & Filter Editing Find & Select X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 for A B C D D E F G H I LJ K L M N 40 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2014, and the inventory on-hand at that time totaled $75,000, which reflects historical cost. Record the 2014 Cost of Goods Sold and the 12/31/14 Inventory adjustment. O Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level A review of inventory data further indicated that the current retail sales value of the ending inventory is $110,000 and estimated costs of completion and shipping is 15% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC realized that their intangible asset might be impaired on December 31, 2014. Record the impairment if any. The expected future net cash flows for this intangible asset totals $30,000, and the fair value of the asset is $27,500. 8 On 7/1/14, ABC purchased 7,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $7 per share, or $49,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/14, ABC reissued these 7,000 shares of treasury stock at $10 per share. Record the journal entry required for the reissuance of the treasury stock. 61 62 62 Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 1 2-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement Ready Instructions Num Lock 2 Statemeri BOJ 100% 0 + - 2 x X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer % Cut Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - $ -% Conditional Format Cell Format Painter Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more Autosum A Fill 2 Clear Sort & Filter Editing Find & Select A B C D E F G H I K L M N O 9 On 12/31/14, ABC issued 5,000 shares of $3 par value common stock at the closing market price of $7 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/14. 68 10 On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are dated 7/1/14, and mature 7/1/19. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/14. Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. 11 The following information is available for ABC Corporation at 12/31/14 regarding its investments in stocks of other companies. Securities Cost Fair Value 2,200 shares of Toyota Corporation Common Stock $ 100,000 $125,000 1,100 shares of G.M. Corporation Common Stock $ 67,000 $ 34,000 $ 167,000 $ 159,000 Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as trading. 83 12 On 1/1/14, ABC Corporation purchased, as a held-to-maturity investment, $200,000 of the 8%, 5-year bonds of Intuit Corporation for $177,824, 84 which provides an 11% return. Prepare ABC's 12/31/14 journal entry to reflect the receipt of annual interest and discount amortization. 85 Assume the bond investment pays interest annually on 12/31 each year and that effective interest amortization is used. N Instructions Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 12-31-14 T-Accounts (GL) Adjusted Trial Balance Ready Num Lock 2 K Income Statement Statemeri 100% 0 + - 2 x % Cut Autosum A Fill 2 Clear Sort & Filter Editing Find & Select AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 Fax A B C D E F G H I J K L M N 1 On March 1, ABC purchased a one-year liability insurance policy for $98,400. Upon purchase, the following journal entry was made: Dr Prepaid insurance 98,400 Cr Cash 98,400 The expired portion of insurance must be recorded as of 12/31/14. Notice that the expired portion from March through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. | O 2 Depreciation expense must be recorded for the month of December. The building was purchased with cash on February 1, 2014 for $150,000 with a remaining useful life of 30 years and a salvage value of $6,000. The method of depreciation for the building is straight-line. The equipment was purchased with cash on February 1, 2014 for $60,000 with a remaining useful life of 5 years and a salvage value of $3,000. The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November. 3 On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent. The entry made on December 1 was as follows: Dr Cash 36,000 Cr Unearned rent revenue 36,000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14. N Instructions Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries Ready Num Lock 2 K 12-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement II Statemeri BOJ 100% 0 + - 2 x % Cut Autosum A X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 fx A B C D E F G H I J K L M N s-% , to 13 Formation at a stable stories insert Fill 2 Clear Sort & Filter Editing Find & Select O 3 On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month, and XYZ paid ABC on December 1 in advance for the first three months' rent. The entry made on December 1 was as follows: Dr Cash 36,000 Cr Uneamed rent revenue 36,000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14. 4 Per timecards, from the last payroll date through December 31, 2014, ABC's employees have worked a total of 250 hours. Including payroll taxes, ABC's wage expense averages about $51 per hour. The next payroll date is January 5, 2015. The liability for wages payable must be recorded as of 12/31/14 5 On November 30, 2014, ABC borrowed $235,000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months on February 28, 2015), along with interest computed at an annual rate of 6%. The entry made on November 30 to record the borrowing was: (for Statement of Cash Flow purposes, consider a financing item) Dr Cash 235,000 Cr Notes payable 235,000 On February 28, 2015 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/14 must be accrued on the $235,000 note. Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 1 2-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement Ready Instructions Num Lock 2 Statemeri BOJ 100% 0 + - 2 x % Cut Autosum A Fill 2 Clear Sort & Filter Editing Find & Select X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - Format Painter $ -% Conditional Format Cell Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more J15 for A B C D D E F G H I LJ K L M N 40 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2014, and the inventory on-hand at that time totaled $75,000, which reflects historical cost. Record the 2014 Cost of Goods Sold and the 12/31/14 Inventory adjustment. O Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level A review of inventory data further indicated that the current retail sales value of the ending inventory is $110,000 and estimated costs of completion and shipping is 15% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC realized that their intangible asset might be impaired on December 31, 2014. Record the impairment if any. The expected future net cash flows for this intangible asset totals $30,000, and the fair value of the asset is $27,500. 8 On 7/1/14, ABC purchased 7,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $7 per share, or $49,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/14, ABC reissued these 7,000 shares of treasury stock at $10 per share. Record the journal entry required for the reissuance of the treasury stock. 61 62 62 Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 1 2-31-14 T-Accounts (GL) Adjusted Trial Balance Income Statement Ready Instructions Num Lock 2 Statemeri BOJ 100% 0 + - 2 x X 7- 15 AC 323 Comprehensive Problem Fall 2019 - Microsoft Excel non-commercial use File Home Insert Page Layout Formulas Data Review View Developer % Cut Garamond - 11 A A = = Wrap Text General - B E Copy Paste BI U D A Merge & Center - $ -% Conditional Format Cell Format Painter Insert Delete Format Formatting as Table Styles Clipboard Font Alignment Number Styles Cells i SUPPORT FOR OFFICE 2010 ENDING OCT 13, 2020 Stay supported by moving to Office 365 or other current versions of Office. Tell me more Autosum A Fill 2 Clear Sort & Filter Editing Find & Select A B C D E F G H I K L M N O 9 On 12/31/14, ABC issued 5,000 shares of $3 par value common stock at the closing market price of $7 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/14. 68 10 On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are dated 7/1/14, and mature 7/1/19. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/14. Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. 11 The following information is available for ABC Corporation at 12/31/14 regarding its investments in stocks of other companies. Securities Cost Fair Value 2,200 shares of Toyota Corporation Common Stock $ 100,000 $125,000 1,100 shares of G.M. Corporation Common Stock $ 67,000 $ 34,000 $ 167,000 $ 159,000 Prepare the adjusting entry (if any) for 2014, assuming the securities are classified as trading. 83 12 On 1/1/14, ABC Corporation purchased, as a held-to-maturity investment, $200,000 of the 8%, 5-year bonds of Intuit Corporation for $177,824, 84 which provides an 11% return. Prepare ABC's 12/31/14 journal entry to reflect the receipt of annual interest and discount amortization. 85 Assume the bond investment pays interest annually on 12/31 each year and that effective interest amortization is used. N Instructions Unadjusted Trial Balance Adjustments Needed Adjusting Journal Entries 12-31-14 T-Accounts (GL) Adjusted Trial Balance Ready Num Lock 2 K Income Statement Statemeri 100% 0 +
