As a staff accountant at ABC Tax & Accounting Service, you have a number of clients who
Fantastic news! We've Found the answer you've been seeking!
Question:
As a staff accountant at ABC Tax & Accounting Service, you have a number of clients who need a variety of services from you. Some will contract with you to do their payroll only, some will ask that you perform the full accounting cycle for them from journal entries to financial statements to closing entries and preparation of the tax returns and payroll reports. One of your clients is Marabelle Hernandez, owner of Marabelle's Craft 'n Shop. As the accounting period comes to an end, you will prepare the adjusting and closing entries, as well as prepare the financial statements and for Marabelle's Craft 'n Shop.
- Complete the adjusting journal entries.
- Enter the adjusting journal entry amounts in the worksheet "Adjusting Entries" columns. Solve for the balance changes and enter new account balances in the "Adjusted Trial Balance" columns.
- Transfer income statement account balances to the "Income Statement" debit and credit columns, and transfer balance sheet account balances to the "Balance Sheet" debit and credit columns.
- Enter formulas to show total debits and credits of all worksheet columns. In the Debit side of the Income Statement columns and the Credit side of the balance sheet columns, enter the net income figure and find balance in debits and credits for these two worksheet items.
- Journalize the closing entries. Recall, we close Revenue, Expense, and Drawing accounts. Use the Income Summary account to close revenue and expenses to, and the capital account to close the drawing account to, as Marabelle is a proprietor and not a corporation so there is no retained earnings account to be used.
- Complete the Income Statement.
- Complete the Balance Sheet. Remember, Marabelle's capital account balance will have changed from the worksheet balance to include the net income and the drawing balance.
- Complete the Statement of Cash Flows. Use the "2015 PCTB" tab for end of last year's account balances to compare to end of the current year's balances for your operating section information.
- On Ratio Analysis tab in the template, show a basic analysis of the information found in the statements. This should include, at minimum, the following ratios:
- Explore the following term also
- Current Ratio
- Inventory Turnover
- Debt Ratio
- Gross Profit Percentage
- Profit Margin
Related Book For
Auditing Cases An Interactive Learning Approach
ISBN: 978-0132423502
4th Edition
Authors: Steven M Glover, Douglas F Prawitt
Posted Date: