The documents with the transactions are to be created new - there are no set num

Question

The documents with the transactions are to be created new - there are no set numbers to start working with.

I have posted this previously and it has not been answered completely. Answer needs to include everything in description.

During the past several months, you have decided to make some changes in your life. You have always wanted to open your own small business and have decided you finally will. You have decided you will open your own merchandising business on January 1, 2016.

During your planning for this Grand Opening, you made the following decisions for your business.

You will fund the opening of your business with a transfer from your personal bank account to the business bank account in the amount of $20,000 on Jan 1.

You have already signed a lease for a building for a monthly rent of $1000 and your first rental payment is due on Jan 1.

On Jan 1, you will purchase any fixed assets you will need to run your business (ie. display racks, furniture, cash registers, etc). All of your fixed assets will use the straight-line method for depreciation.

You will only sell one product (you must decide what your business will be). I am creating this condition to make sure your assignment does not get too complicated. You have prearranged for your supplier to deliver your first inventory shipment on Jan 1. Your supplier will bill you for this shipment.

You will use a Perpetual inventory system and the LIFO method to account for your inventory.

You will sell your product to all customers on account. Your terms for all customers are 2/10, n/30.

To start out, you don’t plan on hiring any employees.

Assignment

On February 1, 2016, you discover that your business is doing better than expected and you need some additional capital to keep up. You decide to obtain a bank loan to buy more inventory and modify the business appropriately. The loan officer at ABC Bank, where you are applying for your loan, has asked for a set of GAAP based financial statements for your company for the month of January 2016. Your financial statements should include anIncome Statement, Statement of Owner’s Equity, and a Classified Balance Sheet. Since your business has only been operational for a month, the loan officer asks you to provide the following detail along with your January financial statements:

A description of your company. Your description should include vital information including (but not limited to): size, layout, and location of business, primary business operations, how you earn your revenue, and your plans for the future.

Chart of Accounts

Your full accounting records for January. You need to include a record of each of the steps in the accounting cycle for your business. (ie. Journal, ledger, unadjusted trial balance, adjusting entries, adjusted trial balance, financial statements, closing entries, and post closing trial balance). You do not have to provide a worksheet. You will need to include a LIFO worksheet so costs can be traced back to their purchases.

You must have at least 20 routine journal entries and at least 3 adjusting journal entries. Your routine entries should consist of at least the following:

Opening investment by you into your business.

Paying rent for January.

Purchasing fixed assets (purchase all in one entry or count your multiple entries as only 1 of the 20 required).

2 purchases of inventory at 2 different prices during the month (the cost of your product should increase). The first purchase will be on Jan 1.

3 sales of inventory to customers. Be sure at least one of the sales is after the second purchase of inventory.

Receive payment from at least 2 of your sales. At least one should be received within the discount period.

Other entries can vary based on your business needs, but you must have at least 20 routine entries. Also, limit yourself to no more than 30 entries to keep your project manageable.

Don’t forget your adjusting journal entries.

You will need to describe each of your journal entries for your loan officer because they will not be familiar with the entries you are making. Your descriptions should be just like they have been described to you in your text throughout the semester. Give any details needed if someone else were going to book the journal entry for you.

Be sure to use a 2016 calendar as you prepare your entries.

Explanation / Answer

Income statement Revenue 2016 Gross sales (Less sales returns and allowances) Net Sales Cost of Goods Sold Beginning inventory Goods purchased or manufactured Total Goods Available (Less ending inventory) Cost of Goods Sold Gross Profit (Loss) Expenses Advertising Bad debt Commissions Depreciation Insurance Maintenance and repairs Office supplies Payroll taxes Rent Salaries and wages Travel Utilities Other Total Operating Expenses Operating Income (Loss) Non-operating revenues, expenses, gains, losses (Less interest expense) Income Before Taxes (Less income tax expense) Net Income Classified balancesheet Assets 2016 Current Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Fixed (Long-Term) Assets Long-term investments Property, plant, and equipment (Less accumulated depreciation) Intangible assets Total fixed assets Other Assets Other Total Other Assets Total Assets Liabilities and Owner's Equity Current Liabilities Accounts payable Short-term loans Income taxes payable Accrued salaries and wages Unearned revenue Current portion of long-term debt Total current liabilities Long-Term Liabilities Long-term debt Deferred income tax Other Total long-term liabilities Owner's Equity Owner's investment Retained earnings Other Total owner's equity Total Liabilities and Owner's Equity Statement of Owner's Equity 2016 Beginning, Capital Add: Additional Contributions Net Income Total Less: Drawings Ending, Capital – Journal entries: Account Debit Credit Cash 20,000 Capital 20,000 Rent 1000 Cash 1000 Fixed assets cash Inventory Cash accounts receivable sales revenue Cost of goods sold Inventory Inventory Cash accounts receivable sales revenue Cost of goods sold Inventory Cash accounts receivable Cash Discount expense accounts receivable Prepaid expenses cash Repairs and Maintenance Cash Adjusting Entries: Depreciation accumulated depreciation Bad debts Allowance for Bad debts Interest expense Interest payable Salaries and wages expense Salaries and wages Payable

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.