Accounting Cycle Project

The Queen of the Snows started a business, Winter Carnival Co$.,$ a company that specializes in

merchandise for ice$-$fishing, snow$-$sliding, treasure$-$hunting and other winter activities. In $2023,$

the company had the following beginning balances $($in dollar$).$

Accounts receivable $$30,000$ Accounts payable $$70,000$

Allowance for doubtful

accounts $$3,000$ Accumulated depreciation

$$ machine $$10,000$

Cash $$50,000$ Common stock $$100,000$

Inventory $$220,000$ Machine $$50,000$

Prepaid advertisement $$36,000$ Retained earnings $$200,000$

Salary payable $$3,000$

During $2023,$ the following transactions occurred.

$1.$ Winter Carnival borrowed $$500,000$ on February $1,2023$ from a local bank, on a $2\%$ note

for $5$ years. Winter Carnival would pay interest semi$-$annually on each August $1$ and

February $1.$

$2.$ Winter Carnival delivered merchandise and earned sales revenue, totaled $$300,000,$ of

which $$250,000$ was on credit. Cost, to Winter Carnival Co$.,$ of the merchandise sold,

totaled $$150,000.$

$3.$ In addition, Winter Carnival signed a sales contract with a customer, Mini$-$Soda Company

to deliver a total of $$60,000$ merchandise in January $2024.$ Winter Carnival collected

$$18,000$ cash in advance from this customer on October $17,2023.$

$4.$ Winter Carnival acquired additional merchandise, totaled $$100,000,$ of which $$90,000$ was

on account.

$5.$ Winter Carnival paid $$80,000$ on its accounts payable to its suppliers.

$6.$ Winter Carnival collected a total of $$200,000$ on its accounts receivable from its various

customers.

$7.$ Winter Carnival paid its employees $$90,000$ cash for their salary. At the end of year $2023,$

the company still owed $$2,500$ salary payable to its employees.

$8.$ Winter Carnival incurred insurance expenses of $$6,000,$ all paid in cash in $2023.$

The following information was also available during $2023$for Winter Carnival Co$.$

$9.$ Its $$prepaid advertisement$$ had $18$ months remaining at the beginning of the year $2023.$

$10.$ The existing machine had an estimated life of $10$ years with no residual value and had been

depreciated using the straight$-$line method.

$11.$ Its ending balance of $$allowance for doubtful accounts$$ was estimated to be $5\%$ of its

outstanding A$/$R at the end of $2023.$

$12.$ The income tax rate was $20\%$ for Winter Carnival and the company would pay its income

tax in the first quarter of $2024.$

$2$ Required:

$1.$ Based on above transactions, prepare journal entries and adjusting entries in $2023$ for Winter Carnival.

$2.$ Set up T$-$accounts and post your journal entries and adjusting entries to T$-$accounts. $($A kind

reminder: Don$$t forget the beginning balances.$)$

$3.$ Prepare a pre$-$closing trial balance, as of December $31,2023.$

$4.$ Prepare an income statement, in a good format, for the year ended December $31,2023$ for

Winter Carnival.

$5.$ Prepare a statement of retained earnings, in a good format, for the same period for Winter

Carnival.

$6.$ Prepare a balance sheet, in a good format, as of December $31,2023$ for Winter Carnival.

$7.$ Prepare closing entries and a post$-$closing trial balance, as of December $31,2023.$

$8.$ Please note that late submissions, without a valid excuse, are subject to point deductions. One point will be deducted, from the total points that you earn on this project, per day after

the due date. I need everything done, especially the balance sheet. Please dont include accruieaccruedd liabilities, i cant get my balance sheet to balance.