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Read ALL instructions before getting started! ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014. Given on the first two tabs are ABC's 12/31/14 Unadjusted Trial Balance and a list of needed adjustments. 1. Make all 16 adjustments on the "Adjusting Journal Entries" tab. Remember to include a description under each journal entry. 2. Post the adjustments to the general ledger on the "123114 TAccounts" tab. You may have to add TAccounts for new accounts. Link your TAccount entries to your Journal Entries. PLEASE NOTE THAT THE "BB" (BEGINNING BALANCES) FOR THE TACCOUNTS REPRESENT THE UNADJUSTED BALANCES AS OF 12/31/14. 3. Once the 12/31/14 TAccounts are complete, prepare the Adjusted Trial Balance. There may be some accounts with zero dollars, and you may have to insert lines for new accounts (some blank TAccounts have already been provided for you). Link the Adjusted Trial Balance to your TAccounts. 4. Use the Adjusted Trial Balance numbers to complete the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows. For purposes of the Income Statement, prepare using the multiple step format and assume that Rent Revenue, any Unrealized Holding Gains/Losses, Interest Expense, Interest Revenue, and any other Gains/Losses are NOT part of the major central ongoing operations of the company. Link your financial statements to your Adjusted Trial Balance. Use the Income Statement and Balance Sheet to finish the partially completed Statement of Cash Flows. Since this is ABC's first year of operations, several line items on the Statement of Cash Flows have already been supplied to you. If necessary, review financial statement preparation in Chapters 4 and 5 of your textbook for a quick refresher. Plan on using your knowledge gained in completing Chapter 23 to help with the preparation of the Statement of Cash Flows. Additionally, since this is ABC Corporation's first year of operations, the adjusted trial balance for all current assets and liabilities represents the change during the year for Statement of Cash Flows analysis purposes. 5. When the Financial Statements are complete, make the closing entries on the "Closing Entries" tab being mindful of the four closing entries you've learned. 6. When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. 7. The final step is the PostClosing Trial Balance, which will use the ending balances from the 1/1/15 TAccounts. 8. Doublecheck your work. Here are a few things to check for: Adjusted Trial Balance: Make sure debit column and credit column total to the same figure at the bottom. Net income from the income statement will flow through to the Statement of Retained Earnings. Ending Retained Earnings from the Statement of Retained Earnings will flow through to the Balance Sheet. Ending Cash balance from the Balance Sheet should match your ending Cash balance on the Statement of Cash Flows. The PostClosing Trial Balance should not have any revenue, expense, gain, loss, or other temporary accounts. Check figure 1: Income from operations = $270,341. Check figure 2: Total Current Assets = $1,726,156. Check figure 3: Total Liabilities & Stockholders' Equity = $2,182,393. Check figure 4: Cash flow used by operating activities = $(9,260). Check figure 5: Adjusted Trial Balance debit and credit columns total $3,033,472. Check figure 6: Cash flow provided by financing activities $1,706,367. Remember: Neatness matters in Financial Statements. Print or Print Preview before submitting to make sure your statements are neat. Otherwise, management may send back to you for revision! Include your work at the bottom of each tab as needed. Ask questions prior to the dayight before the due date. The due date is clearly indicated on the course schedule. Utilize formulas and worksheet linkings in your financial statements to improve accuracy and save time in completing the assignment. Please take advantage of Excel by using formulas to calculate groups of numbers (i.e. "Total Liabilities and Stockholders' Equity"). nal comments: This project is intended to make sure that you understand the accounting cycle as well as several key financial accounting transactions that you have died during your Intermediate Accounting series. It is very important to take the necessary time on this project to master these concepts. The concepts mastered in this comprehensive problem will serve you well in Advanced Accounting and the rest of your accounting curriculum. ABC Corporation Unadjusted Trial Balance December 31, 2014 Cash Short term investments Fair value adjustment (Trading) Accounts receivable Allowance for doubtful accounts Inventory Purchases Prepaid insurance LT (Debt) investments (HTM) Land Building Accumulated depreciation: building Equipment Accumulated depreciation: equipment Patent Accounts payable Notes payable Income taxes payable Unearned rent revenue Bonds Payable Premium on Bonds Payable Common stock PIC In Excess of ParCommon Stock Retained earnings Treasury stock Dividends Sales Revenue Advertising expense Wages expense Office expense Depreciation expense Utilities expense Insurance expense Income taxes expense Debit $980,333 187,000 318,200 402,700 22,500 151,151 68,000 135,000 49,500 37,500 56,000 50,000 6,400 69,100 25,700 20,050 27,500 67,500 69,300 $2,743,434 Credit $ 3,550 16,500 66,290 275,000 69,300 45,000 1,100,000 212,344 100,000 15,000 840,450 $2,743,434 Adjusting Journal Entries 12/31/14 JE # Account Titles 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Debits Credits Beginning balances (bb) on these Taccounts are the 12/31/14 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 980,333 bb 980,333 bb Accounts receivable 318,200 bb 318,200 Short term investments 187,000 Inventory - bb - Fair value adjustment (Trading) bb - Purchases 402,700 bb 402,700 Allowance for doubtful accounts - bb Prepaid insurance 22,500 bb 22,500 LT (Debt) investments (HTM) bb 151,151 Bonds Payable Land 68,000 68,000 Premium on Bonds Payable 212,344 bb 1,100,000 bb 1,100,000 187,000 bb - Accumulated depreciation: building 3,550 bb Building 135,000 135,000 Notes payable - bb 3,550 212,344 Accumulated depreciation: equipment 16,500 bb Equipment 49,500 49,500 Income taxes payable 69,300 bb 275,000 bb 151,151 bb 16,500 Unearned rent revenue 45,000 bb Patent 37,500 Accounts payable 66,290 bb 37,500 Common stock 100,000 bb Retained earnings 66,290 - bb bb Dividends 50,000 PIC In Excess of Par-Common Stock 15,000 bb 275,000 69,300 Sales Revenue 840,450 bb bb Advertising expense 6,400 bb Income taxes expense 69,300 840,450 bb Insurance expense 67,500 67,500 45,000 6,400 bb Wages expense 69,100 69,100 69,300 NOTE: When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. 100,000 bb Office expense 25,700 25,700 50,000 - bb Depreciation expense 20,050 20,050 bb Utilities expense 27,500 27,500 15,000 bb Treasury stock 56,000 56,000 ABC Corporation Adjusted Trial Balance December 31, 2014 Debit Credit $ $ ABC Corporation Income Statement For the Year Ended December 31, 2014 ABC Corporation Statement of Retained Earnings For the Year Ended December 31, 2014 ABC Corporation Balance Sheet For the Year Ended December 31, 2014 ABC Corporation Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities Net income Add: Bad debt expense Deduct: Amortization of bond premium (Issued bonds) Deduct: Amortization of HTM discount (Bond investment) Cash flow used by operating activities Cash flows from investing activities Purchase of Patent Cash flow used by investing activities Cash flows from financing activities Leased delivery vehicle paymentprincipal only Proceeds from bank note Issuance of common stock for cash PICTreasury stock Cash flow provided by financing activities Net change in cash Beginning cash balance 1/1/14 Ending cash balance 12/31/14 *Note: As indicated in the instructions, the Statement of Cash Flows has been partially populated to assist you in the preparation of this financial statement. Remember, since the beginning cash balance is zero, the ending cash balance should also represent the total net change in cash. Closing Entries 12/31/14 JE # 1 2 3 4 Account Titles Debits Credits Beginning balances (bb) on these Taccounts are the 12/31/14 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 980,333 bb 980,333 bb Accounts receivable 318,200 bb 318,200 Short term investments 187,000 Inventory - bb - Fair value adjustment (Trading) bb - Purchases 402,700 bb 402,700 Allowance for doubtful accounts - bb Prepaid insurance 22,500 bb 22,500 LT (Debt) investments (HTM) bb 151,151 Bonds Payable Land 68,000 68,000 Premium on Bonds Payable 212,344 bb 1,100,000 bb 1,100,000 187,000 bb - Accumulated depreciation: building 3,550 bb Building 135,000 135,000 Notes payable - bb 3,550 212,344 Accumulated depreciation: equipment 16,500 bb Equipment 49,500 49,500 Income taxes payable 69,300 bb 275,000 bb 151,151 bb 16,500 Unearned rent revenue 45,000 bb Patent 37,500 Accounts payable 66,290 bb 37,500 Common stock 100,000 bb Retained earnings 66,290 - bb bb Dividends 50,000 PIC In Excess of Par-Common Stock 15,000 bb 275,000 69,300 Sales Revenue 840,450 bb bb Advertising expense 6,400 bb Income taxes expense 69,300 840,450 bb Insurance expense 67,500 67,500 45,000 6,400 bb Wages expense 69,100 69,100 69,300 NOTE: When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. 100,000 bb Office expense 25,700 25,700 50,000 - bb Depreciation expense 20,050 20,050 bb Utilities expense 27,500 27,500 15,000 bb Treasury stock 56,000 56,000 ABC Corporation PostClosing Trial Balance December 31, 2014 Debit Credit TOTAL POINTS EARNED 0 0 0 0 0 TOTAL SCORE (MAX 400 POINTS) Instructor Comments: 0 Read ALL instructions before getting started! ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014. Given on the first two tabs are ABC's 12/31/14 Unadjusted Trial Balance and a list of needed adjustments. 1. Make all 16 adjustments on the "Adjusting Journal Entries" tab. Remember to include a description under each journal entry. 2. Post the adjustments to the general ledger on the "123114 TAccounts" tab. You may have to add TAccounts for new accounts. Link your TAccount entries to your Journal Entries. PLEASE NOTE THAT THE "BB" (BEGINNING BALANCES) FOR THE TACCOUNTS REPRESENT THE UNADJUSTED BALANCES AS OF 12/31/14. 3. Once the 12/31/14 TAccounts are complete, prepare the Adjusted Trial Balance. There may be some accounts with zero dollars, and you may have to insert lines for new accounts (some blank TAccounts have already been provided for you). Link the Adjusted Trial Balance to your TAccounts. 4. Use the Adjusted Trial Balance numbers to complete the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows. For purposes of the Income Statement, prepare using the multiple step format and assume that Rent Revenue, any Unrealized Holding Gains/Losses, Interest Expense, Interest Revenue, and any other Gains/Losses are NOT part of the major central ongoing operations of the company. Link your financial statements to your Adjusted Trial Balance. Use the Income Statement and Balance Sheet to finish the partially completed Statement of Cash Flows. Since this is ABC's first year of operations, several line items on the Statement of Cash Flows have already been supplied to you. If necessary, review financial statement preparation in Chapters 4 and 5 of your textbook for a quick refresher. Plan on using your knowledge gained in completing Chapter 23 to help with the preparation of the Statement of Cash Flows. Additionally, since this is ABC Corporation's first year of operations, the adjusted trial balance for all current assets and liabilities represents the change during the year for Statement of Cash Flows analysis purposes. 5. When the Financial Statements are complete, make the closing entries on the "Closing Entries" tab being mindful of the four closing entries you've learned. 6. When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. 7. The final step is the PostClosing Trial Balance, which will use the ending balances from the 1/1/15 TAccounts. 8. Doublecheck your work. Here are a few things to check for: Adjusted Trial Balance: Make sure debit column and credit column total to the same figure at the bottom. Net income from the income statement will flow through to the Statement of Retained Earnings. Ending Retained Earnings from the Statement of Retained Earnings will flow through to the Balance Sheet. Ending Cash balance from the Balance Sheet should match your ending Cash balance on the Statement of Cash Flows. The PostClosing Trial Balance should not have any revenue, expense, gain, loss, or other temporary accounts. Check figure 1: Income from operations = $270,341. Check figure 2: Total Current Assets = $1,726,156. Check figure 3: Total Liabilities & Stockholders' Equity = $2,182,393. Check figure 4: Cash flow used by operating activities = $(9,260). Check figure 5: Adjusted Trial Balance debit and credit columns total $3,033,472. Check figure 6: Cash flow provided by financing activities $1,706,367. Remember: Neatness matters in Financial Statements. Print or Print Preview before submitting to make sure your statements are neat. Otherwise, management may send back to you for revision! Include your work at the bottom of each tab as needed. Ask questions prior to the dayight before the due date. The due date is clearly indicated on the course schedule. Utilize formulas and worksheet linkings in your financial statements to improve accuracy and save time in completing the assignment. Please take advantage of Excel by using formulas to calculate groups of numbers (i.e. "Total Liabilities and Stockholders' Equity"). nal comments: This project is intended to make sure that you understand the accounting cycle as well as several key financial accounting transactions that you have died during your Intermediate Accounting series. It is very important to take the necessary time on this project to master these concepts. The concepts mastered in this comprehensive problem will serve you well in Advanced Accounting and the rest of your accounting curriculum. ABC Corporation Unadjusted Trial Balance December 31, 2014 Cash Short term investments Fair value adjustment (Trading) Accounts receivable Allowance for doubtful accounts Inventory Purchases Prepaid insurance LT (Debt) investments (HTM) Land Building Accumulated depreciation: building Equipment Accumulated depreciation: equipment Patent Accounts payable Notes payable Income taxes payable Unearned rent revenue Bonds Payable Premium on Bonds Payable Common stock PIC In Excess of ParCommon Stock Retained earnings Treasury stock Dividends Sales Revenue Advertising expense Wages expense Office expense Depreciation expense Utilities expense Insurance expense Income taxes expense Debit $980,333 187,000 318,200 402,700 22,500 151,151 68,000 135,000 49,500 37,500 56,000 50,000 6,400 69,100 25,700 20,050 27,500 67,500 69,300 $2,743,434 Credit $ 3,550 16,500 66,290 275,000 69,300 45,000 1,100,000 212,344 100,000 15,000 840,450 $2,743,434 Adjusting Journal Entries 12/31/14 JE # Account Titles 1 Dr.Insurance Debits 7,500 Cr.Prepaid Insurance Adjustment for insurance for December 2 Dr. Depreciation Expenses Credits 7,500 2,005 Cr. Accumulated Dep. Building Cr. Accumulated Dep. Equipment Depreciation for December 3 Dr. Unearned Rent Revenue 355 1,650 15,000 Cr. Rent Revenue Rent revenue for December 4 Dr. Wages Expenses 15,000 13,750 Cr. Wages Payable Wages payable for December 5 Dr. Interest Expenses 13,750 2,750 Cr. Interest Payable Interest payable on notes for 2 months 6 Dr. Cost of Goods Sold Dr.Inventories 2,750 262,700 140,000 Purchases Adjustment for cost of goods sold for the year 7 Dr. Impairment Loss on Patents 402,700 5,000 Cr. Patents Impairmrnt loss recognized 8 Dr. Cash 5,000 70,000 Cr. Treasury Stock Cr. Additional Paid in Capital Treasury Stock Reissue of Treasury Stock 9 Dr. Cash 56,000 14,000 49,500 Cr. Common Stock Cr. Additional Paid in Capital Issue of 5,500 common stock of par value of $2 at $9 10 Dr.Interest Expenses Dr. Premium On Bonds Payable 11,000 38,500 65,617 16,883 Cr. Interest Payable Amortization of Preium on bonds payable 11 Dr. Short Term Investments 82,500 22,000 Cr. Fair Value Adjustment on Investments (Trading) Unrealized Gain on short term investments held in trading securities 12 Dr. Cash Dr.LT (Debt) investments (HTM) 22,000 13,600 5,100 Cr. Interest Income Adjustment of interest income and discount amortized 13 Dr. Bad Debts Expenses 18,700 25,000 Cr. Allowance for Bad Debts Adjustment for bad debts 14 Dr. Lease Delivery Vehicle 25,000 39,518 Cr. Current Obligation Lease Cr. Long Term Obligation Lease Dr. Current Obligation Lease 9,477 30,041 9,477 Cash Dr.Interest Expenses 9,477 3,004 Cr. Accrued Interest Dr. Depreciation Expenses 3,004 7,904 Cr. Accumulated Dep. On Vehicle Adjustment for lease asset 15 Dr. Pensio Expenses 7,904 70,000 Cr. Cash Dr. OCI 70,000 15,000 Cr. Gain On Defined Benefit Pension Plan Adjustment for DBPP 16 Dr. Compensation Expenses 15,000 9,000 Cr. Common Stock Cr. Additional Paid In Capital Restricted Stock Adjustment for restricted stock 17 Dr. Income Tax Payable 2,000 7,000 2,565 Cr. Income Tax Adjustment for income tax 2565 Beginning balances (bb) on these Taccounts are the 12/31/14 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 980,333 70,000 49,500 13,600 bb 9,477 70,000 1,033,956 bb Accounts receivable 318,200 bb 318,200 Short term investments 187,000 22,000 Inventory 140,000 bb 140,000 Fair value adjustment (Trading) bb 22,000 Purchases 402,700 402,700 bb - Allowance for doubtful accounts - bb 25,000 Prepaid insurance 22,500 bb 22,500 LT (Debt) investments (HTM) bb 151,151 5,100 Bonds Payable Land 68,000 68,000 Premium on Bonds Payable 212,344 bb 1,100,000 bb 1,100,000 209,000 bb 22,000 25,000 Accumulated depreciation: building 3,550 bb 355 Building 135,000 135,000 bb 3,905 Notes payable 212,344 Accumulated depreciation: equipment 16,500 bb 1,650 Equipment 49,500 49,500 Income taxes payable 2,565 69,300 bb 275,000 bb 156,251 bb 18,150 Unearned rent revenue 15,000 45,000 bb Patent 37,500 Accounts payable 66,290 bb 37,500 Common stock 100,000 bb 11,000 2,000 Retained earnings 66,290 - bb bb Dividends 50,000 PIC In Excess of Par-Common Stock 15,000 bb 275,000 66,735 Sales Revenue bb Advertising expense 6,400 bb 840,450 bb Income taxes expense 69,300 2,565 840,450 bb 75,000 bb bb 66,735 5,000 Wages expense 69,100 13,750 53,500 Utilities Expenses 27,500 bb Treasury Stock 56,000 56,000 - Bonds Payable 1,100,000 bb Dividend 50,000 85,250 Interest Income 18,700 18,700 Long Term Obligation Lease 30,041 30,041 OCI 15,000 13,750 13,750 Impairment Loss on Patents 5,000 Interest Expenses 2,750 65,617 3,004 71,371 Additional Paid in Capital- Treasury Stock 14,000 5,000 Bad Debts Expenses 25,000 25,000 Lease Delivery Vehicle 39,518 39,518 Accrued Interest 14,000 Current Obligation Lease 9,477 9,477 Accumulated Dep. On Vehicle 7,904 3,004 3,004 Gain On Defined Benefit Pension Plan 15,000 15,000 Depreciation Expenses 20,050 2,005 7,904 29,959 Wages Payable 262,700 195,461 bb 50,000 Cost of Goods Sold 262,700 Premium on bonds Payable 16,883 212,344 bb 1,100,000 bb 15,000 7,904 Pension Expenses 70,000 70,000 Additional Paid In Capital- Restricted Stock 7,000 7,000 NOTE: When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. Compensation Expenses 9,000 9,000 Depreciation expense 20,050 20,050 68,000 15,000 2,750 82,500 bb 50,000 - bb Land 68,000 15,000 27,500 Office expense 25,700 25,700 15,000 Rent Revenue Interest Payable bb Prepaid Insurance 22,500 7,500 66,290 PIC In Excess of Par-Common Stock 15,000 bb 38,500 113,000 82,850 Accounts Payable 66,290 bb 32,500 bb bb 6,400 Insurance expense 67,500 7,500 Patents 37,500 30,000 bb Utilities expense 27,500 27,500 15,000 bb Treasury stock 56,000 56,000 ABC Corporation Adjusted Trial Balance December 31, 2014 Cash Short term investments Fair value adjustment (Trading) Accounts receivable Allowance for doubtful accounts Inventory Purchases Prepaid insurance LT (Debt) investments (HTM) Land Building Accumulated depreciation: building Equipment Accumulated depreciation: equipment Patent Accounts payable Notes payable Income taxes payable Unearned rent revenue Bonds Payable Premium on Bonds Payable Common stock PIC In Excess of ParCommon Stock Retained earnings Treasury stock Dividends Sales Revenue Advertising expense Wages expense Office expense Depreciation expense Utilities expense Insurance expense Income taxes expense Debit $1,033,956 209,000 318,200 140,000 15,000 156,251 68,000 135,000 49,500 32,500 50,000 6,400 82,850 25,700 29,959 27,500 75,000 66,735 Rent Revenue Wages Payable Interest Expenses Interest Payable Cost of Goods Sold Impairment Loss on Patents Additional Paid in Capital Treasury Stock Interest Income Bad Debts Expenses Lease Delivery Vehicle Long Term Obligation Lease Accrued Interest Accumulated Dep. On Vehicle OCI Gain On Defined Benefit Pension Plan Pension Expenses Compensation Expenses Additional Paid In Capital Restricted Stock 71,371 Credit $22,000 25,000 $3,905 18,150 66,290 275,000 66,735 30,000 1,100,000 195,461 113,000 53,500 840,450 15,000 13,750 85,250 262,700 5,000 25,000 39,518 15,000 70,000 9,000 14,000 18,700 30,041 3,004 7,904 15,000 7,000 $3,019,140 $3,019,140 ABC Corporation Income Statement For the Year Ended December 31, 2014 Sales Revenue Cost of Goods Sold Gross Margin Operating Expenses: Selling Expenses Advertising expense Administrative Expenses: Wages expense Office expense Depreciation expense Utilities expense Insurance expense Bad Debts Expenses Pension Expenses Compensation Expenses Total Operating Expenses Operating Income Interest (Net) Fair value adjustment (Trading) Impairment Loss on Patents Rent Revenue OCI Net Margin Income Tax Profit after Tax $840,450 262,700 $577,750 6,400 82,850 25,700 29,959 27,500 75,000 25,000 70,000 9000 351,409 226,341 (52,671) 22,000 (5,000) 15,000 (15,000) $190,670 66,735 $123,936 ABC Corporation Statement of Retained Earnings For the Year Ended December 31, 2014 Balance at beginning Net Margin Divided Balance at end $ 123,936 $50,000 73,936 ABC Corporation Balance Sheet For the Year Ended December 31, 2014 Assets Current Assets: Cash Short term investments Inventories Accounts receivable net of alowance Prepaid Insurance Total Current Assets Long Term Assets: Land Building Equipments Lease Vehicle Accumulated Depreciation Intangible Assets Patents LT (Debt) investments (HTM) Total Assets Stockholders Equity & Liabilities Current Liabilities Accounts payable Notes payable Income taxes payable Unearned rent revenue Wages Payable Interest Payable Accrued Interest Total Current Liabilities Long Term Liabilities Bonds Payable Premium on Bonds Payable Long Term Obligation Lease Gain On Defined Benefit Pension Plan Total Liabilities Stockholders Equity Common stock PIC In Excess of ParCommon Stock Additional Paid in Capital Treasury Stock Additional Paid In Capital Restricted Stock Retained Earnings Total Stockholders Equity & Liabilities $1,033,956 $209,000 $140,000 $293,200 $15,000 $1,691,156 $68,000 $135,000 $49,500 $39,518 $(29,959) $32,500 $156,251 $2,141,966 $66,290 $275,000 $66,735 $30,000 $13,750 $85,250 $3,004 $540,029 $1,100,000 $195,460 $30,041 $15,000 $1,880,530 $113,000 $53,500 $14,000 $7,000 $73,936 $2,141,966 ABC Corporation Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities Net income $190,670 Add: Bad debt expense Deduct: Amortization of HTM discount (Bond investment) Add: Compensation Expenses Add: Depreciation expense Deduct: Fair value adjustment (Trading) Add: Impairment Loss on Patents Add: OCI Add: Increase in Current Liabilities Deduct; Increase in Current Assets Cash flow from operating activities 25,000 (18,700) 9,000 29,959 (22,000) 5000 15,000 265,029 (635,200) (136,242) Cash flows from investing activities Purchase of Land Purchase of Building Purchase of Patent Purchase of Vehicle Purchase of Long Term Investments HTM Cash flow used by investing activities (68,000) (135,000) (37,500) (6,473) (174,951) (421,924) Cash flows from financing activities Issue of Common Stock Proceeds from bank note Additional Paid in Capital Treasury Stock Issue of Bonds Payment of Dividend Cash flow provided by financing activities 164,500 275,000 14,000 1,312,344 (50,000) 1,715,844 Net change in cash Beginning cash balance 1/1/14 Ending cash balance 12/31/14 1,157,678 1,157,678 1,033,956 123,722 *Note: As indicated in the instructions, the Statement of Cash Flows has been partially populated to assist you in the preparation of this financial statement. Remember, since the beginning cash balance is zero, the ending cash balance should also represent the total net change in cash. Closing Entries 12/31/14 JE # 1 2 3 4 Account Titles Debits Credits Beginning balances (bb) on these Taccounts are the 12/31/14 unadjusted balances. Hint: If there is no beginning balance (bb), it is a new account. bb Cash 980,333 bb 980,333 bb Accounts receivable 318,200 bb 318,200 Short term investments 187,000 Inventory - bb - Fair value adjustment (Trading) bb - Purchases 402,700 bb 402,700 Allowance for doubtful accounts - bb Prepaid insurance 22,500 bb 22,500 LT (Debt) investments (HTM) bb 151,151 Bonds Payable Land 68,000 68,000 Premium on Bonds Payable 212,344 bb 1,100,000 bb 1,100,000 187,000 bb - Accumulated depreciation: building 3,550 bb Building 135,000 135,000 Notes payable - bb 3,550 212,344 Accumulated depreciation: equipment 16,500 bb Equipment 49,500 49,500 Income taxes payable 69,300 bb 275,000 bb 151,151 bb 16,500 Unearned rent revenue 45,000 bb Patent 37,500 Accounts payable 66,290 bb 37,500 Common stock 100,000 bb Retained earnings 66,290 - bb bb Dividends 50,000 PIC In Excess of Par-Common Stock 15,000 bb 275,000 69,300 Sales Revenue 840,450 bb bb Advertising expense 6,400 bb Income taxes expense 69,300 840,450 bb Insurance expense 67,500 67,500 45,000 6,400 bb Wages expense 69,100 69,100 69,300 NOTE: When closing entries have been made, post the entries to the general ledger on the "PostClose TAccounts" tab. Make sure your adjusting journal entries are also posted on your PostClose TAccounts. They will not automatically flow from tabtotab. Suggestion: As an alternative, after you've finished posting your adjusting journal entries to the accounts in the "123114 T Accounts" tab, make a duplicate of this worksheet to use for posting your closing entries and then just relabel the tab as "PostClose TAccounts." Just be sure to delete the original "PostClose TAccounts" tab already in the workbook before you do this since you can't have two worksheets with the same name. 100,000 bb Office expense 25,700 25,700 50,000 - bb Depreciation expense 20,050 20,050 bb Utilities expense 27,500 27,500 15,000 bb Treasury stock 56,000 56,000 ABC Corporation PostClosing Trial Balance December 31, 2014 Debit Credit TOTAL POINTS EARNED 0 0 0 0 0 TOTAL SCORE (MAX 400 POINTS) Instructor Comments: 0