Analyze the transactions and do the following:-
1. Post to T Accounts
2. Prepare a Chart of Account
3. Record in the General Journal
4. Post to the General Ledger
5. Prepare a Trial Balance
6. Prepare a Six Column Worksheet
7. Prepare an Income Statement
8. Prepare a Capital Statement
9. Prepare a Balance Sheet
10. Prepare Closing Entries
11. Prepare a Post-closing Trial Balance
Transactions (dates)
1. Received cash from owner as an investment, $6000
2. Bought supplies on account from Helfrey Company, $900
3. Paid cash for insurance, $150
4. Sold merchandise for cash $1,300
5. Bought Equipment for Cash $1,100
6. Paid cash for supplies, $50
7. Paid cash on account to Helfrey Company, $300
8. Sold merchandise on account to Susan Company, $2000
9. Paid cash for rent, $300
10. Returned Merchandise to Helfrey Company $200
11. Paid cash for advertisement, $100
12. Susan Company returned merchandise $500
13. Salaries, $500
14. Jack Jacky Withdrew $200
Instructions:
Analyze the transactions and do the following:-
1. Post to T Accounts
2. Prepare a Chart of Account
3. Record in the General Journal
4. Post to the General Ledger
5. Prepare a Trial Balance
6. Prepare a Six Column Worksheet
7. Prepare an Income Statement
8. Prepare a Capital Statement
9. Prepare a Balance Sheet
10. Prepare Closing Entries
11. Prepare a Post-closing Trial Balance
Why did you post this lengthy assignment?
With whom are you trying to communicate?
Received cash from owner as an investment, $6000
2. Bought supplies on account from Helfrey Company, $900
3. Paid cash for insurance, $150
4. Sold merchandise for cash $1,300
5. Bought Equipment for Cash $1,100
6. Paid cash for supplies, $50
7. Paid cash on account to Helfrey Company, $300
8. Sold merchandise on account to Susan Company, $2000
9. Paid cash for rent, $300
10. Returned Merchandise to Helfrey Company $200
11. Paid cash for advertisement, $100
12. Susan Company returned merchandise $500
13. Salaries, $500
14. Jack Jacky Withdrew $200
To analyze the transactions and complete the tasks listed, you will need to follow these steps:
1. Post to T Accounts:
- Create T accounts for each account listed in the Chart of Accounts (step 2).
- Analyze each transaction and determine the accounts affected.
- Post the relevant information from each transaction to the corresponding T accounts.
- For example, for transaction 1 (Received cash from owner as an investment, $6000), you would post $6000 to the Cash account and $6000 to the Owner's Equity account.
2. Prepare a Chart of Accounts:
- Identify the accounts mentioned in the transactions.
- List them in a systematic order, usually in a form of a table or a list.
- Assign a unique account number to each account for easy reference and organization.
- For example, the Chart of Accounts may include accounts like Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Owner's Equity, etc.
3. Record in the General Journal:
- Create a general journal and allocate a unique journal entry number to each transaction.
- For each transaction, record the date, transaction description, and the affected accounts with their respective debit or credit amounts.
- For example, the first entry might be: Date - Transaction 1, Description - Received cash from owner as an investment, $6000, Accounts - Cash (Debit $6000), Owner's Equity (Credit $6000).
4. Post to the General Ledger:
- Prepare a general ledger using the T accounts from step 1.
- Transfer the information recorded in the general journal to the respective T accounts in the general ledger.
- For example, update the Cash account in the general ledger with the entries from the Cash T account in the general journal.
5. Prepare a Trial Balance:
- Extract the ending balances of each account from the general ledger.
- List these balances in a trial balance format, with debit balances on the left and credit balances on the right.
- Total the debit and credit columns to make sure they are equal.
- For example, the trial balance might show the total debits as $10,000 and the total credits as $10,000.
6. Prepare a Six Column Worksheet:
- Create a worksheet with six columns: Account, Trial Balance, Adjustments, Adjusted Trial Balance, Income Statement, and Balance Sheet.
- Copy the account names and trial balance amounts from the trial balance to the relevant columns.
- Use the adjustments column to record any necessary adjustments to the trial balance.
- Calculate the adjusted trial balance by adding the trial balance amounts and adjustments.
- Use the income statement column to calculate revenues and expenses based on the adjusted trial balance.
- Use the balance sheet column to calculate assets, liabilities, and owner's equity based on the adjusted trial balance.
7. Prepare an Income Statement:
- From the six-column worksheet, transfer the revenue and expense amounts to the income statement section.
- Calculate the net income or loss by subtracting total expenses from total revenues.
- Present the income statement in a format that shows revenues, expenses, and the resulting net income or loss.
8. Prepare a Capital Statement:
- On the six-column worksheet, transfer the net income or loss from the income statement to the capital statement section.
- Include any additional investments, withdrawals, or owner contributions.
- Calculate the ending capital balance by adding the net income/loss and any additional contributions or withdrawals.
9. Prepare a Balance Sheet:
- From the six-column worksheet, transfer the asset, liability, and owner's equity balances to the balance sheet section.
- Present the balance sheet in a format that lists assets on one side and liabilities and owner's equity on the other side.
10. Prepare Closing Entries:
- Identify the revenue and expense accounts from the general ledger.
- Create closing entries to transfer the balances of these accounts to the retained earnings or owner's capital account.
- Debit the revenue accounts and credit the corresponding retained earnings or owner's capital account.
- Credit the expense accounts and debit the corresponding retained earnings or owner's capital account.
11. Prepare a Post-closing Trial Balance:
- Extract the ending balances of each account from the general ledger after closing entries.
- List these balances in a trial balance format, similar to step 5, but exclude the revenue and expense accounts.
- Total the debit and credit columns to make sure they are equal.
By following these steps, you should be able to complete all the required tasks and prepare the necessary financial statements. Remember to double-check your work for accuracy and make any necessary adjustments as needed.