AC499: Bachelors Capstone In Accounting | Unit 3 Assignment ✓ Solved

AC499: Bachelors Capstone in Accounting | Unit 3 Unit 3 Assignme

Continue with the assignment from Unit 2, using the same Excel Template and complete the following steps:

1. Prepare/Journalize the Adjusting entries A–F.

• Insurance expired during June is $150.
• Supplies on hand on June 30 are $1,020.
• Depreciation of office equipment for June is $500.
• Accrued receptionist salary on June 30 is $120.
• Rent expired during June is $1,500.
• Unearned fees on June 30 are $2,000.

Notes: You will be required to make all corrections to the Excel Workbook as noted in the Unit 2 assignment feedback. Any errors from Unit 2 that are not corrected will result in additional deductions in Unit 3.

Paper For Above Instructions

The purpose of this paper is to comprehensively address the requirements laid out for Unit 3 of the AC499 Bachelors Capstone in Accounting. This involves preparation and journalization of adjusting entries, posting these entries to the General Ledger, and preparing key financial statements, followed by the journalization and posting of closing entries and the preparation of a post-closing trial balance.

Adjusting Entries

The first task is to journalize the adjusting entries A–F as follows:

• Debit Insurance Expense for $150 and credit Prepaid Insurance for $150, reflecting the adjustment for insurance that expired during June.
• Debit Supplies Expense for $230 to adjust the supplies on hand since the total prior to the adjustment was $1,250 and now there are $1,020 in supplies. Credit Supplies Inventory for $230.
• Debit Depreciation Expense for $500 and credit Accumulated Depreciation for Office Equipment for $500, representing the depreciation amount for June.
• Debit Salary Expense for $120 and credit Salaries Payable for $120, to accurately record the accrued salary for the receptionist.
• Debit Rent Expense for $1,500 and credit Prepaid Rent for $1,500, representing the rent that expired during June.
• Debit Unearned Revenue for $2,000 and credit Service Revenue for $2,000 to recognize the revenue earned from previously unearned fees.

Posting Adjusting Entries to the General Ledger

After journalizing these entries, they must be posted to the General Ledger, ensuring that all ledger accounts reflect the new balances post-adjustment. The General Ledger is crucial in maintaining an accurate and up-to-date account of all financial transactions for the business.

Preparation of Financial Statements

Next, we will prepare the following financial statements:

Income Statement

The income statement will summarize revenues and expenses. Based on previous calculations and the new adjustments, the operating revenues are compiled from earned fees and the total expenses are calculated by summing all expense accounts for the period, including depreciation, rent, salaries, supplies, and insurance expenses.

Statement of Owner’s Equity

This statement explains the changes in owner’s equity, resulting from additional investments by the owner plus or minus the net income/loss for the period, less any withdrawals made by the owner.

Balance Sheet

The balance sheet will provide a snapshot of the company’s financial positioning by delineating assets, liabilities, and owner's equity at the end of the period. Total assets should equal total liabilities plus owner's equity, thus confirming the accounting equation.

Closing Entries

Following the preparation of the financial statements, the next step is to journalize and post closing entries. This entails zeroing out revenue and expense accounts through the Income Summary account, subsequently transferring the net income (or loss) to the owner’s equity section of the balance sheet, and finalizing the owner’s withdrawals.

Post-Closing Trial Balance

Last but not least, a post-closing trial balance must be prepared. This trial balance should only include permanent accounts such as assets, liabilities, and equity to ensure that all temporary accounts have been closed properly. This document serves to confirm the integrity of the ledger after the closing processes have been completed.

Conclusion

In conclusion, proper handling of adjusting entries, financial statement preparation, and closing entries is critical in ensuring that financial records depict an accurate picture of the entity's financial health and compliance with accounting principles. By following the outlined steps and ensuring rigorous posting procedures, the business will maintain accuracy in reporting.

References

• Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2021). Accounting Principles. John Wiley & Sons.
• Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2013). Introduction to Financial Accounting. Pearson.
• Libby, T., Libby, R., & Short, D. G. (2019). Financial Accounting. McGraw Hill Education.
• Needles, B. E., Powers, M., & Crosson, S. V. (2020). Principles of Accounting. Cengage Learning.
• Dyson, J. R. (2010). Accounting for Non-Accountants. Kogan Page.
• Weetman, P. (2019). Financial & Management Accounting: An Introduction. Pearson Education.
• Spiceland, J. D., Nelson, M. W., & Thomas, G. E. (2021). Intermediate Accounting. McGraw-Hill Education.
• Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting. Wiley.
• Harrison, W. T., Horngren, C. T., & Thomas, C. W. (2018). Financial Accounting. Pearson.
• Drury, C. (2018). Management and Cost Accounting. Cengage Learning.