Company Information

Indiana Accounting Service Inc. is a public corporation that has been in business for 1 year. The IPO for the company authorized 100,000 shares of common stock at $1 par value. The company provides accounting services and sells accounting software.

To date the company has issued 20,000 shares of common stock, which are still outstanding. The issued shares were sold at $10 per share. A Building and Furnishings were purchased at the start of the year. The cost of the building was $150,000 and the cost of the furnishings was $30,000. The depreciation will be recorded annually. The estimated useful life of the building is 20 years with a residual value of $10,000 and uses the Straight line method. The estimated useful life of the furnishings is 5 years with a residual value of $2,500 and uses the DDB method. The current inventory consists of 30 units of software at a cost of $140.00 each. Inventory is cost using LIFO and the perpetual inventory system. The company uses an allowance method to account for uncollectible accounts. It is estimated that 1% of net credit revenue will be uncollectible, adjusted monthly. Employees are paid $2,500 salary twice a month, on the 16^th for the first half of the month and on the 2^nd of the following month for the last half of the month. Use the Calculations worksheet for calculations of Inventory record, Depreciation, and Uncollectible Accounts Expense. Ignore income tax calculations.

Project Requirements

1. Opening balances- The opening balances for select accounts are provided in the appropriate ledger accounts. All required ledger accounts are provided.

2. Record the following transactions in the journal. The journal is provided. Record explanation on the last line for each journal entry:

12/02/14- Purchased 10 Units of Software on Account for $1,300

12/02/14- Paid employees Salaries owed from November 16^th-30^th

12/02/14- Provided Accounting Service on Account, $3,200

12/05/14- Purchased Computer Equipment on Account, $4,800

12/08/14- Purchased Supplies for $950 cash

12/10/14- Received $3,000 payment on account

12/11/14- Sold 15 units of Inventory on Account, $4,500

12/11/14- Made payment on Account, $1,200

12/12/14- Purchased 20 units of Inventory on Account, $2,400

12/14/14- Paid for Advertising, $375

12/15/14- Provided Accounting service for Cash, $8,000

12/16/14- Paid employees salary for December 1^st -15^th

12/17/14- Provided Accounting Service on Account, $6,000

12/19/14- Sold 10 units of Inventory on Account, $3,000

12/22/14- Received $2,500 payment on Account

12/23/14- Made payment on Account, $2,800

12/24/14- Paid monthly Utility bills, $850

12/27/14- Received $2,000 cash in advance for Accounting service

12/29/43- Provided Accounting Service for Cash, $5,000

12/30/14- Issued 1,000 shares of Common Stock at $15 per share

12/31/14- Declared and paid dividends of $1.50 to outstanding shareholders as of 12/31/14.

3. Post to the ledger for each of the recorded journal entries. Reference each entry from the journal. Create formula for each ledger to calculate the appropriate balance.

4. Prepare a trial balance, using the worksheet, to verify that total debits equal total credits. Reference account balances from the ledger. Create formula to calculate all balances in the worksheet (requirement 4, 5, and 6).

5. Record the necessary adjustments in the worksheet, journal and post to the ledger for the following items:

12/31/14- Accrued employees salary for December 16^th -31^st

12/31/14- Depreciation on Building, use SL method (calculate for entire year)

12/31/14- Depreciation on Furnishings, use DDB method (calculate for entire year)

12/31/14- Depreciation on Computer Equipment, use DDB method (calculate for one month)

12/31/14- Supplies on hand equal $1,625

12/31/14- Inventory count shows 33 units, some damaged units were disposed of during the month

12/31/14- $500 of advance payment was earned in December

12/31/14- Uncollectible Account expense for December

6. Prepare an Adjusted trial balance, using the worksheet, to verify debits equal credits.

7. Prepare the 3 main Financial statements for the year ending December 31, 2014. For the income statement, use a Multi- step format. For the balance sheet, prepare a classified balance sheet. Use a separate Excel worksheet for each statement. Use proper headings and format for each statement. Reference from the adjusted trial balance on the worksheet. Use Excel formulas for all calculations. See textbook for examples.

8. Record the required Closing entries in the journal and post to the ledger.