This is the first in a series of exercises designed to assist you in building and applying your accounting knowledge. Analyzing transactions, recording journal entries, and preparing financial statements are the core elements of financial accounting. In this exercise, you will work with transactional information to perform these steps and generate a set of basic financial statements. You will also practice using a Microsoft Excel worksheet to perform these tasks. 

The following is the trial balance for a consulting firm. Become familiar with the accounts used. (You will use these balances in a later step.) Sheridan Supply Post-closing Trial Balance April 30, 2018, Debit Credit Cash 85,550 Accounts receivable 4,700 Prepaid insurance 800 Supplies 250 Land 9,000 Notes payable 5,000 Accounts payable 1,600 Unearned service revenue 4,400 Common stock 50,000 Retained earnings 39,300 Totals 100,300 100,300 

• Analyze transactions and prepare the appropriate journal entries. The following transactions occurred for our business during the month of May. Analyze the transactions to determine which ones should be accounted for and prepare the appropriate journal entries. (You may want to use T-accounts to help you think through debits and credits, but the required response to this prompt is a set of properly formatted journal entries.) Date Description 5/03 We performed $400 in services for a customer who previously paid for them. 5/05 We purchased a small parcel of land for $25,000 cash. 5/07 We participated in a parade in town and hired a new employee. 5/09 We decided we needed a larger parcel of land, so we raised funding by issuing another $100,000 in common stock in exchange for cash. 5/11 We purchased another parcel of land for $80,000 cash. 5/19 We contracted with a client to provide $5,000 worth of consulting services but have not yet provided the service. The client paid cash. 5/21 The same client (from 5/19) called with several questions, using $1,000 worth of consulting time. 5/28 We went to a local store and bought $150 of supplies on account. ACCT 1010: 

• Update the ledger accounts and prepare an updated trial balance. Using a Microsoft Excel worksheet (see the template provided in the course shell), prepare an updated trial balance as of May 31.

• Make the adjusting entry and calculate the adjusted trial balance. After generating a trial balance, adjusting entries are made to ensure that revenue recognition and matching (expense recognition) principles are followed. In the case of Sheridan Supply, only one adjusting entry is needed. On January 1, the company purchased an insurance policy for $1,200, which provides coverage for the entire year. Make the appropriate entry in the adjustment column of the worksheet. Calculate the adjusted trial balance to reflect the adjustment 

• Complete the worksheet. Make sure the adjusted trial balance debits and credits are equal. Copy all revenue and expense account balances to the income statement columns on the worksheet; copy all asset and liability account balances to the balance sheet columns. Calculate net income or net loss and extend it to the appropriate balance sheet column. 

• Prepare basic financial statements. Using the information from the worksheet, prepare an income statement and a balance sheet for the month that ended May 31. Make sure to use the appropriate headings and include all necessary information on each statement; create these documents on the appropriate tabs in the template workbook. Submission You should use the Microsoft Excel template provided in the course shell to complete this assignment. Please turn in a completed Excel workbook with four tabs: 

• Journal – this tab will include the journal entries to reflect the monthly transactions 

• GLWorksheet – this tab includes the trial balance worksheet (which includes adjusting entries and financial statement columns) 

• IS – use this tab to create your income statement 

• BS – use this tab to create your balance sheet