MANUAL INSTRUCTIONS FOR FEBRUARY

1) Journalize the transactions listed below and on the next page and post to the ledger accounts. Omit explanations.

2) Prepare an unadjusted trial balance.

3) Journalize the adjusting entries and post to the general ledger. Adjustment data are provided on the next page.

4) Prepare an adjusted trial balance.

5) Prepare a schedule of accounts receivable.

6) Prepare an income statement for the two months ended February 28, 20Y8. If not completing the optional requirements below, use only the year-to-date amount column to complete your statement. Optional: Prepare the statement for both the month of February and the year to date. Balances in the income and expense accounts currently reflect year-to-date activity. Complete the year-to-date income statement first. To calculate February figures, subtract January figures (from last months income statement) from the year-to-date figures. Optional: Include vertical analysis figures in the statement by calculating the percent of each line item to total revenue. Note: If working the set with the general ledger software, the generated statement will automatically include monthly and year-to-date figures and include percentages for vertical analysis.

7) Prepare a retained earnings statement for the two months ended February 28, 20Y8.

8) Prepare a balance sheet as of February 28, 20Y8.

9) Complete the analysis test for February on page 37.

GENERAL LEDGER SOFTWARE INSTRUCTIONS Follow the instructions on page 2 of this booklet. Detailed instructions for this month are available in the general ledger software by clicking the Instructions button near the bottom of your screen. (Note that you may have to scroll down and over to see this button.) TRANSACTIONS FOR FEBRUARY General Entries

Feb. 4 Issued Check No. 109 for $5,500 for the current months advertising.

6 Issued Check No. 110 for $2,000 for February office rent.

7 Received $10,300 from Premier Corp. for decorating services performed throughout its office building.

Feb. 11 Received $6,000 from Maribel Thompson for decorating services performed January 12 on account.

15 Received $4,800 from Floyd and Peterson Law Firm for services performed to decorate its conference room.

22 Received $8,000 from Roberto Andriani for decorating services performed January 25 on account. Customer decided to pay part of the debt ahead of time.

25 Redecorated the restaurant facilities of Rivieras Caf on account for $11,500 (net 60).

27 Issued Check No. 111 for $225 to pay the utilities bill for the month.

27 Issued Check No. 112 for $350 in payment of the telephone bill for the month.

27 Issued Check No. 113 for $230 for postage.

27 Issued Check No. 114 for $500 for business automobile expenses.

27 Issued Check No. 115 for $5,600 to Sophia LeBron for salary. (Payroll taxes are not considered in this entry. Transactions in later months will show you how to journalize payroll tax deductions and expenses.) Adjusting Entries a) Expired insurance for the period, $500. b) Supplies on hand at the end of the month, $675. 35

FEBRUARY ANALYSIS Name Date Grade A. From the statements you prepared for February, provide the following amounts: Adjusted Trial Balance 1) Trial balance totals .............................................................................................. $ Schedule of Accounts Receivable 2) Schedule of accounts receivable total.................................................................. $ Income Statement 3) Total revenue for the two months ended February 28, 20Y8.............................. $ 4) Total expenses for the two months ended February 28, 20Y8............................ $ 5) Net income for the two months ended February 28, 20Y8.................................. $ Retained Earnings Statement 6) Ending retained earnings balance transferred to balance sheet........................... $ Balance Sheet 7) Total assets as of February 28, 20Y8 .................................................................. $ 8) Total liabilities and stockholders equity as of February 28, 20Y8 .................... $ B. Prepare a brief paragraph stating why there is a need for adjusting and closing entries in the accounting cycle. _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ __________________________________________