The ending balance of the cash account has not been properly calculated and entered. A December 30 billing of $2,000 to a customer on account was not posted to the Accounts Receivable ledger account. A December 30 purchase of supplies for $500 not posted to the Accounts Payable ledger account. A cash dividend payment of $5,000 made on December 31st was erroneously omitted. I have to update and complete the new ledger and prepare financial statements using the blank forms in the picture that I sent.

ACC 211 CHALLENGE #1 Name_ THE RECORDING PROCESS - DEBITS AND CREDITS Design Corporation Preliminary Unadjusted Trial Balance ecember 31, 2017 ACC 211 1 Credit UPDATE LEDGER CHALLENGE #1 Name_ Accounts Receivable 149,082 28,740 126,661 Drastic Design Corporation Equipment 86,000 December 31, 2017 Accounts Payable Cash Jan. 1 bal. #10 18,630 Onearned Revenue 1,320 Activity thru Dec. 31 92,582 Dec 31 subtotals 140 126,661 Jan. 1 bal Common Stock 126.661 ctivity thru Dec. 3 #30 Retained Earnings Dec 31 bal 2 582 Dividends 20,000 Fees camed 35.920 Retained Earnings #35 Rent Expense 6,800 Supplies Expense 2,840 Jan. 1 bal. Accounts Receivable #13 Jan. 1 bal Wages Expense Activity thru Dec. 29 60,490 Jan 1 bal Dividends #38 52,301 386,044 285.682 Dec. 29 bal. 28 ,740 31,750 Activity thru Dec. 31 Dec. 31 bal 15,000 15,000 The above preliminary trial balance of Drastic Design Corporation does not balance. When you review the general journal and general ledger supplied on the followin Supplies . 31 Bal 20. 080 he ending balance of the cash account has not been prongsfollowing pages you see Fees Earned 2) A December 30 billing of 000 to a customer on account wa ly calculated & entered. on account was not posted to the Jan. 1 bal. ctivity thru Dec. 29 0 Jan. 1 bal. Accounts Receivable ledger account. Dec. 30 subtotal Dec. 30 350 2,840 Activity thru Dec 29 of supplies for $500 not posted to the Accounts Payable 500 Dec. 30 83,920 C. 31 ball 2,000 ledger account. 35 920 4) A cash dividend payment for $5,000 made on December 31st was erroneously omitted Equipment #18 NSTRUCTIONS: Jan. 1 bal. Activity thru Dec. 31 68,000 Jan. 1 balt Expense #50 complete the following tasks using the partial journal and the ledger provided: Dec. 31 bal . 68,000 ctivity thru Dec. 31_ Complete the posting of journal entries that were not completely posted to the ledger Dec 31 bal . 6 800 Prepare a journal entryfour e a journal entry to record the December 31st payment of the dividend (make sure to include an explanatrecord Jan. 1 bal Accounts Payable #21 3. Update the general ledger (t-account) balances for your changes to the general ledge Activity thru Dec. 29 Dec . 29 bal . 10.500 29.130 Supplies Expense #53 prepare a corrected trial balance. 18,630 Prepare financial statements using the blank forms attached (make sure to include 3000 thru Dec. 31 2,840 2 840 proper titles and dates). Answer the questions on the last page of the challenge. Jan. 1 bal. Unearned Revenues #26 Wages Expense #5 Activity thru Dec. 31 ACC 21 CHALLENGE #1 Dec. 31 bal . 5,280 6,600 Jan. 1 bal. 1.320 Activity thru Dec. 31_ 52,301 ACC 211 CHALLENGE #1 Dec. 31 bal . 52,301 1. & 2. UPDATE JOURNAL Name 5. PREPARE FINANCIAL STATEMENTS, CONTINUED Drastic Design Corporation Drastic Design Corporation General Journal Pg 5 Date ash flows from operating activities: 2017 Description Posting Debit Credit Cash received from customers Deduct cash payme 56,500 . PREPARE FINANCIAL STATEMENTS Dec 30 Accounts Receivable 2,000 Fees Earned Expenses Creditors (33,161) (10,500) Drastic Design Corporation To record services provided on account Net cash flow _ - operating activities 5 Dec 30 Supplies Cash flows used for investing activities: irchase of equipment (68,000) Fees earned Accounts Payable investing activities Expenses: tips from finance To record purchase of supplies on account Wages expense Cash received from issuing stock $2.582 Rent expense 10 Dec Deduct cash paid for dividends Net cash flow _ - financing activities Supplies expense in cash Total expenses paid dividends in smehoodas Cash at the beginning of the year Net income Cash at the end of the year 4. PREPARE CORRECTED TRIAL BALANCE 6. ANSWER THE FOLLOWING QUESTIONS: Drastic Design Corporation A. Where do the numbers used to prepare a trial balance come from? Drastic Design Corporation Corrected Unadjusted Trial Balance December 31, 2017 B. What is the purpose of a trial balance? Debit Credit Retained earnings. Net income Cash C. Is a trial balance a required financial statement? Less dividends Accounts Receivable Supplies D. Other than those identified on the first page, list at least two other issues you noticed with the preliminary in retained earnings Equipment unadjusted trial balance . Retained earnings Accounts Payable Unearned Revenues Drastic Design Corporation Common Stock E. How do you know that the ending balance on the Statement of Cash Flows is accurate? Retained Earnings Dividends Fees Earned F. Calculate the debt ratio for Drastic Design Corporation: Industry standard: 0.4 Cash Rent Expense Total assets Accounts receivable Accounts payable Unearned revenues Supplies Expense Total liabilities Wages Expense What does this ratio tell you about Drastic Design Corporation? Supplies Equipment Totals Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total assets Total liabilities and stockholders' equity