Purpose: This assignment has been developed to provide you with an opportunity to complete all of the steps in the accounting cycle for one Company, Success Systems. This allows you put together the information you will learn in Chapters 1-4 in one project. In addition, you will analyze the Company's financials in a business memorandum.
Instructions: This problem is based upon the Serial Problem in your textbook at the end of Chapters 2, 3 and 4. Please refer to pages 3-4 of this handout for transaction details.
Required Steps: Complete the following steps in order.
Where indicated "STOP HERE" please do not move on to the next step until you check your work.
Note: You can either complete this project within Excel OR you can print out the working papers in the excel template and complete by hand.
1. Prepare journal entries (October through December) to record each of the above transactions for Success Systems. Note: There is a page for each month of journal entries. (If no entry is required for a particular transaction, write "No journal entry required".)
2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them. See working papers for the GL template.
3. Prepare an Unadjusted Trial Balance as of December 31, 2013.
OPTIONAL: Prepare the Unadjusted trial balance in the first columns of the worksheet.
4. Prepare adjusting entries to reflect a through f.
5. Post the journal entries to record each of the December adjusting entries to the accounts in the ledger. Open additional ledger accounts as needed.
6. Prepare an adjusted trial balance as of December 31, 2013.
7. Prepare an income statement for the three months ended December 31, 2013.
8. Prepare a statement of owner’s equity for the three months ended December 31, 2013.
9. Prepare a “classified” balance sheet as of December 31, 2013. (Amounts to be deducted should be indicated with a parenthesis.)
10. Record the closing entries for Success Systems.
11. Prepare a post-closing trial balance as of December 31, 2013. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities and Equity.)
Grading: 250 TOTAL points
· October & November journal entries
· October & November general ledger
· December journal entries
· Adjusting journal entries
· December general ledger
· December Adjusted Trial Balance
· Financial Statements
· Closing journal entries and postings
· Post-Closing Trial Balance
Details to be provided in a separate instruction document
TOTAL Business Memo
On October 1, 2013, Adria Lopez launched a computer services company called Success Systems, which provides consulting services, computer system installations, and custom program development. Adria adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2013. The company’s chart of accounts follows. Account
101 A. Lopez, Capital
106 A. Lopez, Withdrawals
126 Computer Services Revenue
128 Depreciation Expense – Office Equip.
131 Depreciation Expense – Comp. Equip.
163 Wages Expense
Accumulated Depreciation – Office Equipment
167 Rent Expense
Accumulated Depreciation – Comp. Equipment
Computer Supplies Expense
201 Advertising Expense
Unearned Computer Services Revenue
Repairs Expense — Computer