Scenario

You are a certified public accountant (CPA) who is working with a small bakery to prepare their financial statements for three months of the current fiscal year. Because the company is a startup and so small, the accounting is done manually in Microsoft Excel. You have been given the accounts and information you need to prepare their financial statements, but you will need to use the accounting cycle to report accurate information to the finance department.

Prompt

Accrual Basis: In your company accounting workbook, apply the accrual basis of accounting and prepare adjusting entries to ensure accurate accounting for expenses that lack transactions in the current period. (You may refer to the Company Accounting Workbook Template if necessary, but keep in mind that your work for this milestone should be added to the work you completed in your workbook for the previous milestone.)

Specifically, you must address the following rubric criteria:

• Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the Trial Balance tab of the company accounting workbook, ensuring that the total debits and credits match.
• Adjusting Entries: Prepare the Adjusting Entries tab of the company accounting workbook. Ensure that the entries are correctly transferred to the adjusting entries portion of the Trial Balance tab.
• Adjusted Trial Balance: Prepare the adjusted trial balance on the Trial Balance tab, ensuring that the debit and credit totals match.
• 

This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. Asset Accounts Equity Accounts Acct # Acct # 201 Common Stock 202 Dividends 203 Cost of Goods Sold 204 301 302 303 Liability Accounts Acct # 101 Notes Payable 102 Accounts Payable 103 Wages Payable 104 Interest Payable 105 106 107 108 Cash Baking Supplies Prepaid Rent Prepaid Insurance Baking Equipment Office Supplies Accounts Receivable Accumulated Depreciation Merchandise Inventory 109 Revenue Accounts Acct # Bakery Sales Merchandise Sales 401 402 Expense Accounts Baking Supplies Expense Rent Expense Insurance Expense Misc. Expense Business License Expense Advertising Expense Wages Expense Telephone Expense Interest Expense Depreciation Expense Office Supplies Expense Acct # 501 502 503 504 505 506 507 508 509 510 511 A Company General Journal Entries October, 20xx Date Accounts Debit Credit 1-Oct| $ 1-Oct 3-Oct 7-Oct 10-Oct 11-Oct 13-Oct 13-Oct 14-Oct 30-Oct Chart of Accounts October Journal Entries November Journal Entries December Journal Entries T-Accounts - autofill Inventory Valuation A Company General Journal Entries November, 20xx Date Accounts Debit Credit A Company General Journal Entries December, 20xx Date Accounts Debit Credit Cash date date Notes Payable date 1-Oct. $ 3-Oct date 3-Oct Business License exp 10-Oct Common Stock $ 1-Oct 13-Oct 0 0 7-Oct 10-Oct 0 11-Oct 13-Oct 14-Oct 31-Oct 31-Oct 5-Nov 8-Nov 10-Nov 18-Nov Insurance expense 15-Nov 20-Nov 20-Nov 22-Nov Accounts Rec. 31-Oct 8-Nov 18-Nov 30-Nov 30-Nov 1-Dec 5-Dec 7-Dec 8-Dec 31-Dec 8-Dec 8-Dec 0 0 10-Dec 13-Dec 0 15-Dec 15-Dec 20-Dec 20-Dec 24-Dec 30-Dec 31-Dec Cash date date Notes Payable date 1-Oct. $ 3-Oct date 3-Oct Business License exp 10-Oct Common Stock $ 1-Oct 13-Oct 0 0 7-Oct 10-Oct 0 11-Oct 13-Oct 14-Oct 31-Oct 31-Oct 5-Nov 8-Nov 10-Nov 18-Nov Insurance expense 15-Nov 20-Nov 20-Nov 22-Nov Accounts Rec. 31-Oct 8-Nov 18-Nov 30-Nov 30-Nov 1-Dec 5-Dec 7-Dec 8-Dec 31-Dec 8-Dec 8-Dec 0 0 10-Dec 13-Dec 0 15-Dec 15-Dec 20-Dec 20-Dec 24-Dec 30-Dec 31-Dec FIFO Ending Inventory Purchases Purchases No. of Unit Price Total Price Items 10 $ 6.00 $ 60.00 No. of Date Items 7-Dec Sales No. of Unit Price Total Price Items 12/7: 10 boxes purchased at $6 Dr Cr Unit Price Total Price 10 $ 6.00 $ 60.00 60.00 Date 7-Dec Merchandise Inventory (10 x $6) Cash Purchased inventory 60.00 15-Decl 8 $ 6.00 48.00 2 $ 6.00 $ 12.00 12/20:20 boxes purchased at $6.10 12/30:25 boxes purchased at $6.05 Sales - selling price, $8.50 a box 12/15: 8 boxes 12/24: 18 boxes 20-Dec 20 $ 6.10 $ 122.00 68.00 2 $ 6.00 $ 12.00 20 $ 6.10 $ 122.00 22 $ 134.00 15-Dec Cash (8 x $8.50) Merchandise Sales Revenue Record sale of inventory 68.00 24-Dec 48.00 2 $ 6.00 $ 12.00 16 $ 6.10 $ 97.60 18 $ 109.60 4 $ 6.10 $ 24.40 15-Dec Cost of Goods Sold (8 X $6) Merchandise Inventory Recorded the cost of goods sold 48.00 30-Dec 25 $ 6.05 $ 151.25 122.00 4 $ 6.10 $ 24.40 25 $ 6.05 $ 151.25 29 $ 175.65 20-Dec Merchandise Inventory (20 x $6.10 ) Cash 122.00 Net Inventor Y 55 $ 333.25 26 $ 157.60 29 $ 175.65 153.00 24-Dec Cash (18 x 8.50) Merchandise Sales Revenue Record sale of inventory 153.00 109.60 24-Dec Cost of Goods Sold (2 x $6)+(16 x $6.10) Merchandise Inventory Recorded the cost of goods sold 109.60 151.25 30-Dec Merchandise Inventory (25 x $6.05) Cash 151.25 A Company Trial Balance 20xx Unadjusted trial balance Adjusting entries Debit Credit Debit Credit Adjusted trial balance Debit Credit Account Cash Baking Supplies Merchandise Inventory Prepaid Rent Prepaid Insurance Baking Equipment e Accumulated Depreciation e Office Supplies Accounts Receivable 5 Notes Payable 5 Interest Payable - Accounts Payable Wages Payable Common Stock Dividends Bakery Sales Merchandise Sales Baking Supplies Expense - Rent Expense 5 Interest Expense 5 Insurance Expense Depreciation Expense B Misc. Expense Office Supplies Expense Business License Expense Advertising Expense Wages Expense Telephone Expense COGS - 5 5 Total