ACC 201 Final Project Peyton Approved Instructions For This

Acc 201 Final Project Peyton Approved Instructionsfor This Deliverable

For this assignment, you will complete the accounting cycle and prepare financial statements based on business transactions over a three-month period, from initial setup through reporting. The transactions include setting up the business, sales, payments, debt management, and other operational activities. You are instructed to record journal entries for July, August, and September, post entries to T-accounts, prepare trial balances, make necessary adjustments, and finalize financial statements. The process concludes with closing entries, preparing the post-closing trial balance, and reversing entries. Follow the step-by-step procedures in your workbook, ensuring all journal entries, adjusting entries, and calculations are accurately reflected in the financial statements.

Paper For Above instruction

The comprehensive scope of this project involves executing the full accounting cycle for Peyton Approved over a three-month period, accurately reflecting all financial transactions from initial business setup to final reporting. This process is integral to understanding how proper bookkeeping, transaction recording, adjusting entries, and financial statement preparation collectively provide a clear picture of a business's fiscal health and operational success.

The first phase of the assignment requires detailed journal entries for July 2014. These entries capture the initial funding of the business through owner investment and external loans, along with startup expenses such as purchasing supplies, leasing space, and acquiring equipment. Notably, the owner invests $15,000 from personal savings to purchase common stock, and the business receives an additional $10,000 loan from the owner’s parents, which includes interest considerations. Operational expenses such as rent, supplies, advertisements, and licensing fees are recorded, along with the transfer of personal equipment into the business, which is considered a capital contribution affecting equity and depreciation calculations. The July entries also include sales transactions totaling $15,000, with a portion on credit, and accrued wages for employee labor during this period.

Moving into August, journal entries focus on ongoing operational activities such as receiving customer payments, purchasing additional supplies, paying bills, and accruing wages similar to July. The business’s sales increase to $20,000, with a significant portion on credit, emphasizing the importance of managing accounts receivable. The transaction flow reflects typical business activities and cash management strategies that impact business liquidity and profitability. The detailed recording of these transactions ensures that the financial data accurately mirrors the company's operational reality, setting a foundation for subsequent analysis and reporting.

The third phase introduces inventory management and valuation methods in September, where the business starts selling hypo-allergenic shampoos. This section involves selecting appropriate inventory valuation methods—FIFO, LIFO, or weighted average—by analyzing purchase and sales data to determine the most accurate valuation. Journal entries for inventory purchases, sales, and cost of goods sold are reflected within the perpetual inventory system. This stage also involves dividend disbursement, employee wages, and multiple purchases, sales, and journal entries associated with merchandise transactions. The process underscores the importance of inventory control, cost allocation, and sales recording, vital for accurate gross profit and inventory valuation.

The subsequent steps focus on ledger posting and trial balance preparation. All journal entries are posted to T-accounts to calculate account balances as of September 30. Using these balances, an unadjusted trial balance is prepared, serving as the groundwork for identifying necessary adjustments. Adjusting entries are then made for depreciation of assets, accrued interest on loans, insurance expense, supplies on hand, and supplies used, based on accurate year-to-date and period-specific data. These adjustments account for economic events not captured during initial recording, ensuring compliance with accrual basis accounting and providing a true reflection of financial position.

Following adjustments, the trial balance is updated to an adjusted trial balance, which forms the basis for preparing the financial statements. The income statement summarizes revenues and expenses, leading to net income or loss, while the statement of owner’s equity accounts for owner investments, withdrawals, and retained earnings adjustments. The balance sheet presents a snapshot of the company's assets, liabilities, and equity at period-end, reflecting the cumulative effects of all transactions, adjustments, and closing entries.

The project also involves closing temporary accounts (revenues and expenses) to retained earnings, a crucial step to reset accounts for the next period. Reversing entries are then prepared to streamline subsequent accounting cycles, particularly for accrued expenses. The final phase consolidates all work into a clean, organized post-closing trial balance, ensuring readiness for the next accounting period and verifying the accuracy of the entire accounting process.

Overall, this comprehensive assignment emphasizes the significance of meticulous record-keeping, analytical inventory valuation, precise adjustments, and structured financial reporting. Through disciplined adherence to accounting principles and detailed documentation, the project demonstrates how accounting cycles translate raw transaction data into meaningful financial insights, supporting sound business decision-making and strategic planning.

References

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