Introduction

This is a simulation of the accounting cycle for a service business. It is part of the summative evaluation for this course. You are the accountant for Smith Heating and Electric owned by Mike Smith. You have the task of completing the accounting cycle and preparing the financial statements for Smith Heating and Electric. Smith Heating and Electric provides mechanical service and installation to both home and business clients (furnace installs and repair, electric systems, etc). The revenue they earn comes from service revenue and the sales of equipment (furnaces, water heaters, electrical equipment, etc). The comapny uses the Periodic Inventory method. You have been given the following: Tab # Tab 1 The introductory page - this page. Tab 2 The Trial Balance at the end of November 30, 2019. Tab 3 The Financial transactions for the month of December 2019, the last month of the fiscal year. Tab 4 The adjustments and additional information required to complete the accounting cycle for the year. Tab 5 Journal paper for Journal entries, Adjusting entries and Closing Entries. Tab 6 The General Ledger. Tab 7 The Worksheet. Tab 8 The Income Statement. Tab 9 The Balance Sheet. Tab 10 Financial Ratio Calculations. NOTE: This business has a fiscal year ended December 31, 2019. When taxes are applicable, you will be given this information. HST is 13%. You will make the adjustments and closing entries for the year. Instructions From the information you have received, complete the following steps: Step 1 Journalize the transactions for the month of December 2019. Journal descriptions are not required. There are ten transactions in total. Step 2 Post the journal entries to the General Ledger Accounts. Dont forget to start by entering the Opening Balances. Step 3 Produce a Trial Balance on the Worksheet for the year ended December 31, 2019. Step 4 Add the adjusting entries and complete the Worksheet. There are six adjusting entries. Step 5 Create the Financial Statements from the completed Worksheet. Step 6 Journalize the adjusting and closing entries. Step 7 Calculate the Financial Ratios and comment on the financial health of company.