Create a mock merchandising company and demonstrate your knowledge of accrual basis accounting and the double-entry accounting system by creating a minimum of 10 original transactions spanning a period of 3 months (Jan. 1 Mar. 31) and completing the requirements below. Assume your mock company is a new company that begins operations on Jan. 1st. Beginning with a new company will be easier than an existing company as you will not have any beginning balances to deal with. The transactions should include examples of accruals and deferrals and at least one of each of the following: financing a new business (e.g. issuing stock or borrowing), obtaining assets, incurring liabilities, earning revenue, and incurring expenses.

Required (All 12 steps must be performed using EXCEL)

1) Write a list of at least 10 original transactions spanning a fiscal quarter (e.g. Jan.1 March 31) and following the guidelines above. The first transaction should be a financing transaction (issue stock or borrow).

2) Journalize each transaction.

3) Post the journal entries to accounts and compute the ending balance (March 31) in each account.

4) Prepare a trial balance from ending account balances.

5) Write a list of at least 5 adjusting entries for the quarter-ended March 31 related to transactions prepared in step 1. Note that adjusting entries do not have an effect on the cash account.

6) Journalize the adjusting entries. Note that adjusting entries do not affect the cash account.