Acct 207 Team Project: Adjusting Journal Entries And Financi

1acct 207 Team Project Adjusting Journal Entries And Financial Statem

Improve your understanding of the relationships between the financial statements; increase your confidence in preparing and recording accounting entries; increase your ability to understand the preparation of formal financial statements.

Included are the unadjusted trial balance for Sinfully Sweet Desserts at December 31, 2016, and a list of adjusting journal entries required at year-end. You are instructed to enter the December 31, 2016, unadjusted trial balance into the designated spreadsheet, which includes formulas to transfer amounts into financial statements. Record each adjusting entry directly into the spreadsheet in the "Adjustments" columns after preparing them separately for clarity. Filling in account names under the “Accounts” column will automatically flow into relevant financial statement areas. After adjusting entries, your system will prepare a multi-step income statement, statement of retained earnings, and classified balance sheet for December 31, 2016, and will post closing entries. The system includes formulas to ensure debits equal credits and total calculation accuracy throughout.

Students may work alone or in teams of two. Each team must submit one hard copy of the completed spreadsheet, including all columns and financial statements, and email an electronic copy. Additionally, a separate explanation of the accounting cycle steps taken—such as where the final balances are located after adjustments, how data flows into the financial statements, what each statement communicates, and the purpose of closing entries—is required. This explanation should analyze the entire process from recording adjustments to preparing financial statements and posting closing entries. The “Post-Closing Trial Balance” contains only balance sheet accounts.

All work must be submitted or emailed by December 7th. Late submissions will receive zero unless prior arrangements are made. It is advisable to start early to accommodate unexpected delays. For guidance, refer to Chapter 4 of your textbook. When printing, ensure the spreadsheet and financial statements are properly formatted for clear presentation on separate pages.

Paper For Above instruction

The purpose of this project is to deepen your understanding of accounting procedures, particularly how adjustments influence financial statements, the flow of data within an accounting system, and the significance of closing entries. The process begins with correctly entering the unadjusted trial balance into a provided spreadsheet. This spreadsheet is designed with embedded formulas to simulate an accounting system, automatically transferring data into comprehensive financial statements once adjustments are made.

Once the trial balance data is entered, the next step involves analyzing the provided adjusting journal entries, which pertain to various end-of-year financial adjustments such as accrued revenues, accrued expenses, unearned revenue recognition, inventory adjustments, interest calculations, and bad debt estimation. Each adjusting entry must be carefully recorded in the spreadsheet’s adjustment columns. To facilitate accuracy, it is advisable to draft these entries separately before inputting them into the system.

After recording adjustments, the spreadsheet's automatic calculations update the adjusted trial balance. This adjusted balance forms the basis for preparing the core financial statements: the income statement, statement of retained earnings, and classified balance sheet. These statements summarize key financial information, highlighting what the financial position and performance reveal about the business's operations during 2016.

The income statement begins with sales revenue, deducts cost of goods sold, and incorporates various expenses, such as wages, utilities, and rent, culminating in net income. This net income figure is subsequently used to update retained earnings in the statement of retained earnings. The balance sheet presents assets, liabilities, and equity accounts as of December 31, 2016, with assets listed in order of liquidity and liabilities in order of maturity.

Following the preparation of financial statements, the system automatically posts closing entries to reset temporary accounts (revenues and expenses) to zero, transferring net income into retained earnings, thus preparing for the next accounting period. The final step involves generating the post-closing trial balance, which contains only balance sheet accounts, confirming that debits equal credits and that accounts are correctly closed.

This process demonstrates the interconnectedness of all accounting steps—from initial journal entries and adjustments to final financial statements and closing procedures—providing a practical understanding of accounting cycles and financial reporting. Proper execution ensures accurate portrayal of financial health and performance, essential for internal decision-making and external reporting.

References

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