Module $03$ Accounting Cycle Part $2$

Taylor$$s Creative Design

PART $2$

For Part $2$ of the accounting cycle, you will complete the following tasks:

$1.$ Journalize the adjusting entries.

$2.$ Post the adjusting entries to the T accounts.

$3.$ Prepare an adjusted trial balance.

$4.$ Create the financial statements in proper form.

a$.$ Prepare the income statement using the single$-$step method.

b$.$ Prepare the statement of retained earnings.

c$.$ Prepare the balance sheet in account form.

$5.$ Journalize the closing entries.

$6.$ Post the closing entries to the T accounts.

$7.$ Prepare a post$-$closing trial balance.

Taylor is eager to find out if she has earned any profit during the first month of her operations. You must first adjust the accounts to bring them up to date before preparing the financial statements.

$1.$ Journalize these adjusting entries in the journal.

April $30.$ The depreciation on the equipment is $$120.$

April $30.$ The supplies remaining on hand at the end of the month total $$160.$

April $30.$ The balance on the photo subscription website is $$245.($Hint: Of the $$300$ that she had in the Prepaid Photo Subscriptions account, how much has now been used up$?$ The expense account to use here is called $$Photo Expense.$)$

April $30.$ The monthly amount for advertising via the website and email account must be expensed. $($Hint: Refer to the original entry above for the amount per month to be expensed$-$ remember, she originally paid $$480$ for one year worth of these services, now she has used up one month$$s worth. What is the entry that adjusts the books for this?$)$

April $30.$ Taylor determined she performed $$1,200$ worth of work for Charley$$s Restaurant. She has already received some of the cash on the $8$th of the month. Now she needs to invoice the restaurant for the remainder and record the revenue earned. $($Hint: Refer to the entry for clues about what she needs to do in the entry for the restaurant$-$ they have already paid her some of this. This entry will affect THREE accounts.$)$

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After the adjusting entries are journalized, complete the rest of the accounting cycle with these steps.

$2.$ Post the adjusting entries to the T accounts.

$3.$ Prepare an adjusted trial balance.

$4.$ Create the financial statements in proper form.

a$.$ Prepare the income statement using the single$-$step method.

b$.$ Prepare the statement of retained earnings.

c$.$ Prepare the balance sheet in account form.

$5.$ Journalize the closing entries.

$6.$ Post the closing entries to the T accounts.

$7.$ Prepare a post$-$closing trial balance.

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