Cole Creative Project Instructions: Complete Journal Entries

Cole Creativesproject Instructions1 Complete Journal Entries For Rema

Complete journal entries for the remainder of the year, prepare unadjusted trial balance, make all necessary adjusting entries, prepare adjusted trial balance, make all necessary closing entries, and finally prepare financial statements including an income statement (multi-step), balance sheet, and statement of cash flows.

Paper For Above instruction

To effectively address the requirements outlined in the project, it is essential to approach each step methodically, ensuring accuracy and compliance with accounting principles.

1. Complete Journal Entries for the Remainder of the Year

The initial step involves documenting all business transactions that have occurred or will occur until the year's end. These journal entries encompass sales, purchases, adjustments, and other financial activities. Accurate documentation of these transactions ensures that financial records reflect the company's actual performance and position.

For example, sales transactions should be recorded with debits to cash or accounts receivable and credits to sales revenue. Expenses are documented with debits and corresponding credits to the appropriate accounts. It is vital to verify the correctness of each entry, ensuring that accounts are debited and credited appropriately.

2. Prepare Unadjusted Trial Balance

Following the completion of journal entries, the next step is to compile an unadjusted trial balance. This involves listing all ledger accounts with their debit or credit balances to verify that total debits equal total credits, which indicates that the ledger is balanced before adjustments.

This trial balance provides a preliminary snapshot of the company's financial standing and serves as a foundation for analyzing necessary adjustments.

3. Make All Necessary Adjusting Entries

Adjusting entries are made to account for accrued and deferred items, ensuring that revenues and expenses are recognized in the period they occur, in accordance with the matching principle. Common adjustments include accrued revenues, accrued expenses, depreciation, and prepaid expenses.

For example, accrued revenues require an entry to recognize revenue earned but not yet received, involving a debit to accounts receivable and a credit to revenue. Depreciation expenses are recorded with a debit to depreciation expense and a credit to accumulated depreciation.

4. Prepare Adjusted Trial Balance

After recording all adjusting entries, an adjusted trial balance is prepared. This includes the updated balances after adjustments and provides an accurate basis for preparing financial statements.

This trial balance confirms that debits still equal credits after adjustments, ensuring the integrity of the financial data used in the statements.

5. Make All Necessary Closing Entries

At the end of the accounting period, closing entries are made to transfer the balances of temporary accounts (revenues, expenses, dividends) to retained earnings. This resets the temporary accounts to zero for the next period and updates retained earnings to reflect the period's net income or loss.

For example, revenue accounts are closed by debiting revenue accounts and crediting income summary; expenses are closed by debiting income summary and crediting expense accounts. Finally, income summary is closed to retained earnings.

6. Prepare Financial Statements

The final phase involves preparing comprehensive financial statements:

- Income Statement (Multi-step): This statement separates operating revenues and expenses from non-operating items, providing a detailed view of profitability. It starts with gross profit, deducts operating expenses, and reports net income.

- Balance Sheet: Presents the company's assets, liabilities, and shareholders' equity as of the reporting date, providing insight into the financial position.

- Statement of Cash Flows: Details cash inflows and outflows categorized into operating, investing, and financing activities, highlighting how cash is generated and used during the period.

Conclusion

Each step in this process builds upon the previous, culminating in the presentation of accurate and meaningful financial reports. These reports are vital for stakeholders to assess the company's financial health and inform decision-making. Precision in recording, adjusting, and closing entries is fundamental to maintaining the integrity of financial data.

The due date for this project is Tuesday, July 9, 2015. Ensuring timely completion and accuracy in each step will fulfill the project's objectives and support sound financial analysis.

References

Accounting Standards Board. (2020). Generally Accepted Accounting Principles (GAAP). Financial Accounting Standards Board.

Gaap, A. (2019). Introduction to Financial Accounting. Pearson Education.

Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2019). Introduction to Financial Accounting. Pearson.

Knapp, E. A., & Theobald, R. (2021). Accounting Principles. McGraw-Hill Education.

Libby, T., Libby, R., & Short, D. G. (2019). Financial Accounting. McGraw-Hill Education.

Needles, B. E., & Powers, M. (2018). Financial Accounting. Cengage Learning.

Revsine, L., Collins, W. J., & Johnson, W. B. (2017). Financial Reporting & Analysis. Pearson.

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2020). Financial Accounting. Wiley.

Williams, J. R., Haka, S. F., & Bettner, M. S. (2018). Financial & Managerial Accounting. McGraw-Hill Education.

Wild, J. J., Subramanyam, K. R., & Halsey, R. F. (2021). Financial Statement Analysis. McGraw-Hill Education.