Create financial statements by properly employing prescribed methods in accordan

Question

Create financial statements by properly employing prescribed methods in accordance with generally accepted accounting principles: A. Step Eight: Prepare the financial statements. Note that you must use your adjusted trial balance to prepare the income statement, statement of owner’s equity, and balance sheet. You must complete these statements in this order, as there are interdependencies among them. B. Step Nine: Complete the “Closing Entries” tab in your workbook by closing all temporary income statement amounts to create closing entries. C. Step Ten: Prepare the “Post Closing Trial Balance” tab for the next accounting period. D. Step Eleven: Prepare the reversing entries in the “Reversing Entries” tab of your workbook

Asset Accounts Liability Accounts Equity Accounts Acct # Acct # 201 Common Stock 202 Dividends Acct # 301 302 203 Cash Baking Supplies Prepaid Rent Prepaid Insurance Baking Equipment Office Supplies Accounts Receivable Accumulated Depreciation Merchandise Inventory 101 Notes Payable 102 Accounts Payable 103 Wages Payable 104 Interest Payable 105 106 107 204 109 Revenue Accounts Bakery Sales Merchandise Sales Acct # 401 402 This chart of accounts should help you identify the appropriate accounts to record to as you are analyzing and journaling transactions for this workbook. There is nothing to complete on this page; this is simply a resource for you. Expense Accounts Acct # 501 502 503 504 506 Baking Supplies Expense Rent Expense Insurance Expense Misc. Expense Business License Expense Advertising Expense Wages Expense Telephone Expense Interest Expense Depreciation Expense Office Supplies Expense Cost of Goods Sold 510 512

Explanation / Answer

Income statement For Qtr. Ending 9/30/2018 Revenues: Bakery Sales      55,000.00 Merchandise Sales            221.00 Total Revenue      55,221.00 Cost of Goods sold      17,557.60 Gross Profit (FIFO)      37,663.40 Operating Expenses: Rent expense          4,500.00 Insurance expense             400.00 Depreciation expense             208.33 Misc. Expense             250.00 Office supplies expense             550.00 Business license expense             375.00 Advertising expense             200.00 Wages expense          1,956.00 Telephone expense             150.00 Total Operating expense        8,589.33 Operating Profit      29,074.07 Non-operating expenses: Interest expense            150.00 Net Profit (FIFO)      28,924.07 Statement of Retained Earnings For Qtr. Ending 9/30/2018 Beginning Balance: 0 Plus Net Income (FIFO)       28,924.07 Less Dividends       10,000.00 Ending Balance (FIFO)       18,924.07 Balance Sheet As of September 30, 2018 Assets Liabilities and Owner's Equity Current Assets: Current Liabilities: Cash      32,236.75 Accounts Payable            5,000.00 Baking Supplies        1,100.00 Wages payable                480.00 Merchandise Inventory (FIFO)            175.65 Interest Payable                150.00 Prepaid Rent        1,500.00 Total Current Liabilities            5,630.00 Prepaid Insurance        2,000.00 Misc. Supplies              50.00 Long term liabilities: Accounts receivable        7,700.00 Notes payable          10,000.00 Total Long term Liabilities          10,000.00 Total Current Assets      44,762.40 Total Liabilities          15,630.00 Long term/Fixed Assets: Baking equipment          6,000.00 Common Stock          16,000.00 Less: Accumulated Depreciation           (208.33)        5,791.67 Retained Earnings          18,924.07 Total Long term/Fixed ssets        5,791.67 Total Equity          34,924.07 Total Assets:      50,554.07 Total Liabilities and Equity          50,554.07 Closing Entries Qtr. Ending 9/30/2018 Bakery Sales       55,000.00 Merchandise Sales             221.00 Income Summary      55,221.00 Income Summary (FIFO) 26296.93 Baking supplies expense      17,400.00 Rent expense        4,500.00 Insurance expense            400.00 Depreciation expense            208.33 Misc. Expense            250.00 Office supplies expense            550.00 Business license expense            375.00 Advertising expense            200.00 Wages expense        1,956.00 Interest expense            150.00 Telephone expense            150.00 COGS (FIFO)            157.60 Income Summary (FIFO) 28924.07 Retained Earnings (FIFO)      28,924.07 Retained Earning       10,000.00 Dividends      10,000.00 Post Closing Trial Balance Qtr. Ending 9/30/2018 Account Debit Credit Cash       32,236.75 Baking Supplies          1,100.00 Merchandise Inventory (FIFO)             175.65 Prepaid Rent          1,500.00 Prepaid Insurance          2,000.00 Baking equipment          6,000.00 Accumulated Depreciation            208.33 Office Supplies                50.00 Accounts receivable          7,700.00 Accounts Payable        5,000.00 Wages payable            480.00 Interest Payable            150.00 Note payable      10,000.00 Common Stock      16,000.00 Retained Earnings      18,924.07 Total       50,762.40      50,762.40

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