Will you please explain how this works, I greatly appreciate your time!!

1. 1: Analyze and Prepare Journal Entries

Following, you will find the GBI Post-Close Trial Balance as of December 31^st which must be posted as a manual journal entry into your brand-new SAP system. Then you are provided descriptions of routine events occurring during January for which you are to make general journal entries in a manual accounting system (spreadsheet). Your manual accounting system needs to include a general journal, t-accounts, and a trial balance, all of which will be generated in Excel. Be sure to include your beginning and ending balances in your t-accounts.

To simulate the practice of running parallel systems, you will then post your manual system entries into the SAP system. After you post all your entries into SAP, the resulting trial balances from your manual system and the SAP system should match exactly.

Manual Accounting Cycle Process

1. Record the 12/31 Post-close Trial Balance as the 1/1 Beginning Trial Balance as a single journal entry.
2. Record the daily transactions if appropriate, (some events may not involve journal entries), as general journal entries into Excel. Also, post these journal entries into t-accounts and then calculate account balances using cell formulas in Excel. Link the t-account balances into your Excel worksheet as a trial balance. You should create links between your spreadsheets to expedite this process and minimize the risk of an error in data entry.
3. The next step is to record the adjusting entries into the general journal and then post them into the t-accounts and trial balance.
4. Record closing entries in your trial balance as if this were a year-end close. (Do not enter the closing entries in your t-accounts.)

Parallel SAP Accounting Cycle Process

5. Record the 12/31 Post-close Trial Balance as the 1/1 Beginning Trial Balance as a single journal entry in the SAP general ledger. Be sure to compare this to your Excel spreadsheet to make sure the entries are correct. Instructions for inputting journal entries into SAP follow later in this document.
6. Record the daily transactions for January in the SAP general ledger. It is best to do each journal entry as separately with appropriate dates to maintain a good audit trail.
7. Record the adjusting entries as you did the entries in step 6.
8. Generate financial statements (trial balance) and compare to your manual trial balance. If the trial balance does not match your manual entries, research the errors, and make necessary corrections. See Section 1.7: Troubleshooting for help.
9. Optional: Simulate closing the books as of January 31 using SAP. Do not enter closing entries into the general ledger. These entries would be done automatically through the SAP month-end closing function.

   Trial Balance as of December 31
   Account	Title	Debit Balance	Credit Balance
   100000	Bank Account	$252,518
   110100	Miscellaneous Accounts Receivable	108,420
   110400	Allowance for Bad Debt		$2,500
   200600	Inventory-Operating Supplies	750
   200900	Inventory-Raw Materials (Direct Post)	32,000
   200910	Inventory-Finished Goods (Direct Post)	281,298
   200920	Inventory-Trading Goods (Direct Post)	66,474
   210000	Prepaid Insurance	5,000
   212000	Prepaid Advertising	1,000
   220110	Land (Direct Post)	425,000
   220210	Property, Plant & Equipment (Direct Post)	915,000
   220310	Accumulated Depreciation-PP&E (Direct Post)		305,000
   300200	Payables-Miscellaneous		47,900
   300700	Payables-Salaries and Wages		110,000
   300800	Accrued Expenses		988
   320000	Accrued Tax-Output		3,063
   329000	Common Stock		1,000,000
   330100	Retained Earnings (Direct Posting)		618,009