Chart of Accounts and Transactions.
Name Any company then write a business letter. Include the following items:
a. A description of your business, including the location and what types of services you provide.
b. A list of the asset, liability, equity, revenue and expense accounts you believe your business will use in its accounting. Develop 12 transactions that occur during the first month of your business operations using the guidelines below. Write descriptions (sentences) of the transactions in the Word document. Include all of the relevant information like the enterprises involved, dates and amounts. Use realistic numbers so that your financial statements will eventually make sense.
1.
a. Record a stock issuance as your first transaction.
b. Record transactions involving at least three assets other than cash. Include the purchase of a depreciable asset and a prepayment.
c. Record at least two transactions involving the liabilities accounts payable and notes payable. (These can be combined with the asset transactions above or the expense transactions below.)
d. Record two revenue transactions. One of the transactions should include accounts receivable. (Unearned revenue doesn't count.)
e. Record at least four expense transactions, each using a different expense.
f. Record a dividend payment.
Part 2
Journal Entries and Posting.
Journalize all of the transactions you wrote in chronological order. Use the Word template developed for this project and provided in Blackboard. (If you know how to use Excel, you may use that instead. I will also post Excel templates) Include a description of each transaction, and skip a line between transactions.Post all of your journal entries to ledger t-accounts. Write and label the ending balance if there is more than one transaction in an account.
Part 3
Posting, Trial Balance and Adjustments
Prepare a trial balance with the totals from your t-account ledger. (Be sure your accounts are in the proper order)
1. Journalize four adjusting entries at the end of the month, including descriptions. Be sure to record depreciation and usage or expiration of the prepaid expense you recorded. Use the same journal you used in part 2, but write these entries in red to distinguish them from the regular transactions.
2. Post the adjusting entries to your ledger. Use red for the amounts to distinguish these from the regular transactions. Write and label ending balances for accounts with more than one transaction.
3. Prepare an adjusted trial balance.
Part 4
Financial Statements and Closing Entries.1. 1. Prepare an income statement, statement of retained earnings and classified balance sheet for the month. (Format counts - be sure items are ordered correctly and dates and headings are correct as well as dollar signs, etc.).
2. Journalize closing entries. Use your previous journal, then post the entries to the ledger accounts. Use blue for your closing entries to distinguish them from your other entries. Note that your temporary accounts should all have zero balances! Hand in your journal with all of the entries.
3. Prepare a post-closing trial balance using the new balances in the accounts.