Reassessment Question Clo 3 Assessment Question For Accounti

Reassessment Questionclo 3 Assessment Question For Accounting 1olympia

Reassessment Question CLO 3 Assessment Question for Accounting 1 Olympia Consuting Adjusted Trial Balance For the Year Ended April 30, 2015 Account Title Debit Credit Cash 27,500 Accounts Receivable 53,500 Supplies 1,200 Office Equipment 30,500 Accumulated Depreciation 5,250 Accounts Payable 3,300 Salaries Payable 450 Capital Stock 30,000 Retained Earnings 52,200 Dividends 2,000 Fees Earned 60,000 Salary Expense 32,450 Supplies Expense 1,800 Depreciation Expense 750 Miscellaneous Expense 1,500 Total 151,200 Olympia Consulting is a consulting firm owned and operated by Chris Hann. The following Adjusted Trial Balance was prepared for the year ended April 30, 2015. CLO 3: Students will be able to analyze accounting data and prepare in good form three of the four basic financial statements Based on the Adjusted Trial Balance, prepare an income statement, retained earnings statement, and balance sheet for Olympia Consulting Rubric for CLO 3 Reassessment question for Accounting 1 Students have to show work in order to determine the correct answers.

5 points for each category and total is 15 possible points. 1. Able to prepare Income Statement (5 points) 2. Able to prepare Retained Earnings Statement (5 points) 3. Able to prepare Balance Sheet (5 points).

Please record your answers on the "Student Response Sheet" next. Student Response Sheet Expenses: Total Expense Retained Earnings, Beginning Less: Change in Retained Earnings Retained Earnings, Ending ASSETS LIABILITIES Current Assets: Current Liabilities: Total Current Assets Total Liabilities Property, Plant and Equipment: STOCKHOLDER'S EQUITY Total Property, Plant and Equipment Total Stockholder's Equity Total Assets Total Liabilities and Stockholder's Equity

Paper For Above instruction

The provided adjusted trial balance for Olympia Consulting for the year ended April 30, 2015, offers vital financial data necessary to prepare the primary financial statements: the income statement, retained earnings statement, and balance sheet. These statements collectively depict the company’s financial health, operational performance, and ownership structure, providing essential insights for stakeholders, managers, and investors alike. This paper will systematically analyze the given data to produce accurate financial statements, demonstrating a comprehensive understanding of accounting principles and the ability to translate raw financial data into meaningful financial reports.

Introduction

Financial statements serve as crucial tools in the accounting process, providing a snapshot of a company's financial position and performance over a specific period. The income statement reflects revenues and expenses, showing net income or net loss. The retained earnings statement tracks changes in retained earnings resulting from net income, dividends, and other adjustments. The balance sheetItemizes assets, liabilities, and equity at a particular point in time. Effective preparation of these statements requires diligent interpretation of the adjusted trial balance, ensuring accurate classification and summation of financial data.

Analysis of the Adjusted Trial Balance

The trial balance lists all account balances with their respective debit and credit amounts. For Olympia Consulting, key assets include cash ($27,500), accounts receivable ($53,500), supplies ($1,200), and office equipment ($30,500), with accumulated depreciation ($5,250). Liabilities encompass accounts payable ($3,300) and salaries payable ($450). Equity accounts are capital stock ($30,000), retained earnings ($52,200), and dividends ($2,000). Revenue is captured under fees earned ($60,000), while expenses comprise salary expense ($32,450), supplies expense ($1,800), depreciation expense ($750), and miscellaneous expenses ($1,500). The total of these balances is thoroughly reviewed to ensure correctness before structuring the financial statements.

Preparation of the Income Statement

The income statement begins with total revenues, primarily fees earned, totaling $60,000. Total expenses are derived from salary expense ($32,450), supplies expense ($1,800), depreciation expense ($750), and miscellaneous expenses ($1,500), summing to $36,500. The calculation of net income involves subtracting total expenses from total revenues:

• Total Expenses: $36,500
• Net Income: $23,500 ($60,000 - $36,500)

This net income figure is fundamental as it feeds into the retained earnings statement, reflecting the company's profitability for the period.

Preparation of the Retained Earnings Statement

The retained earnings statement explains the changes in retained earnings during the period. Beginning retained earnings are $52,200. The net income calculated from the income statement is added, and dividends paid ($2,000) are subtracted to determine ending retained earnings:

• Beginning Retained Earnings: $52,200
• Add: Net Income: $23,500
• Less: Dividends: $2,000
• Ending Retained Earnings: $73,700

This ending balance is essential for the balance sheet, where it is included under stockholders' equity.

Preparation of the Balance Sheet

The balance sheet documents assets, liabilities, and stockholders' equity at the end of the period. Assets are classified as current or property, plant, and equipment. Current assets include cash ($27,500), accounts receivable ($53,500), supplies ($1,200), totaling $82,200. Property, plant, and equipment are valued at $30,500, minus accumulated depreciation ($5,250), resulting in net property, plant, and equipment of $25,250.

Liabilities include accounts payable ($3,300) and salaries payable ($450), totaling $3,750. Stockholders' equity comprises capital stock ($30,000) and retained earnings ($73,700), totaling $103,700. The balance sheet must verify that total assets equal the sum of total liabilities and stockholders’ equity:

• Total Assets: $107,450
• Total Liabilities & Equity: $107,450

The congruence of these figures confirms the integrity of the financial statements.

Conclusion

In conclusion, the meticulous analysis of the adjusted trial balance data for Olympia Consulting facilitates the accurate construction of the core financial statements. Through careful classification and calculation, the income statement, retained earnings statement, and balance sheet collectively provide a comprehensive view of the company’s financial standing, performance, and wealth. These statements serve as vital tools for decision-making and strategic planning, underscoring the importance of precise accounting practices in financial reporting.

References

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