Complete Requirements: The Remaining Entries And Adjusting E

Completerequirements The Remaining Entries Adjusting Entries Adjuste

Complete requirements the remaining entries (adjusting entries, adjusted trial balance, financial statement, closing entries are whats left to be done) of the Jane's Skateboards for the second milestone of the course project. You will use the file you completed in milestone one. You will use the Course Project Template Jane's Skateboards. project milestone 1 Complete requirements 1 through 3 of Jane's Skateboard's Case for the first milestone of the course project. You can use the T-Accounts for posting Journal Entries or the General Ledger page. Please note that the journal entries for this project are not exactly the same as the ones in the demo video. Think them though and you will be fine. there was no feedback for milestone 1 the grade of 100 was received.

Paper For Above instruction

Introduction

The second milestone of Jane's Skateboards course project necessitates the completion of several crucial accounting procedures: adjusting entries, preparing an adjusted trial balance, creating financial statements, and executing closing entries. These tasks are fundamental in ensuring the accuracy and completeness of the company’s financial records, facilitating proper financial analysis, and providing a reliable basis for managerial decision-making. Building on the foundation established in the first milestone, this paper delineates the steps required to accomplish these remaining accounting processes systematically.

Adjusting Entries

Adjusting entries are essential adjustments made at the end of an accounting period to recognize revenues and expenses in the period in which they occur, regardless of when cash transactions happen. They are necessary for aligning the company’s accounts with the accrual basis of accounting, which is the standard for financial reporting.

For Jane’s Skateboards, adjusting entries might include accrued revenues, such as sales not yet billed or received, and accrued expenses, like utilities or wages payable. Additionally, adjustments for prepaid expenses, depreciation, and supplies need to be recorded.

To illustrate, if Jane’s Skateboards prepaid insurance for six months, an adjusting entry at the month’s end would debit insurance expense and credit prepaid insurance for the amount used during the period. Similarly, depreciation expense on equipment would be calculated and recorded by debiting depreciation expense and crediting accumulated depreciation.

The appropriate use of T-Accounts or the general ledger is crucial for posting these adjusting entries correctly, ensuring the ledger reflects the updated balances needed for the subsequent steps.

Adjusted Trial Balance

After journalizing the adjusting entries, the next step is to prepare an adjusted trial balance. This lists all account balances after adjustments and serves as the primary basis for preparing financial statements.

The adjusted trial balance confirms that total debits equal total credits, maintaining the accounting equation's integrity. It includes all accounts from the general ledger, with their adjusted balances, listed in order—assets, liabilities, equity, revenues, and expenses.

This step ensures the accuracy of the adjusted balances and facilitates the detection of any errors made during the adjusting process. It also provides a clear snapshot of the company's financial position at the end of the accounting period.

Financial Statements

Using the adjusted trial balance, the core financial statements are prepared:

1. Income Statement: Reports revenues and expenses to determine net income or loss for the period.

2. Statement of Retained Earnings: Adjusts beginning retained earnings with net income and dividends to compute ending retained earnings.

3. Balance Sheet: Presents assets, liabilities, and stockholders' equity, reflecting the company’s financial position after all adjustments.

The preparation of these statements involves transferring the relevant balances from the trial balance and ensuring the calculations accurately portray the financial health of Jane’s Skateboards.

Closing Entries

Closing entries serve to reset the temporary accounts (revenues, expenses, dividends) to zero for the start of the next accounting period while updating retained earnings.

The process involves:

- Crediting revenue accounts and debiting income summary.

- Debiting expense accounts and crediting income summary.

- Debiting or crediting the income summary account to close it to retained earnings.

- Closing dividends to retained earnings by debiting retained earnings and crediting dividends.

This process ensures income and expense accounts are cleared, and the retained earnings account reflects the net income or loss for the period.

Executing precise closing entries maintains the integrity of the accounting cycle and prepares the accounts for the coming period.

Conclusion

Completing the adjusting entries, preparing the adjusted trial balance, financial statements, and closing entries are vital steps in the accounting cycle for Jane’s Skateboards. These processes ensure that the financial data is accurate, complete, and ready for report generation. Utilizing the previously completed work from milestone one, these steps involve careful journalizing, posting, and calculating to accurately portray the company’s financial status. Attention to detail in each step guarantees the reliability of the financial reports, supporting stakeholders’ decision-making and strategic planning.

References

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