III Create financial statements by properly employing prescr

III. Create financial statements by properly employing prescribed methods in accordance with generally accepted accounting principles:

A. Step Eight: Prepare the financial statements. Note that you must use your adjusted trial balance to prepare the income statement, statement of owner’s equity, and balance sheet. You must complete these statements in this order, as there are interdependencies among them. [ACC-201- 03]

B. Step Nine: Complete the “Closing Entries” tab in your workbook by closing all temporary income statement amounts to create closing entries. [ACC-201-03]

C. Step Ten: Prepare the “Post Closing Trial Balance” tab for the next accounting period. [ACC-201-03] D. Step Eleven: Prepare the reversing entries in the “Reversing Entries” tab of your workbook. [ACC-201-03]

I. Record financial data that accurately captures business transactions according to accepted accounting principles: A. Step One: Complete the \"July Journal Entries\" tab in your workbook using the Step One data in the appendix. [ACC-201-01] B. Step Two: Complete the \"August Journal Entries\" tab in your workbook using the Step Two data in the appendix. [ACC-201-01] C. Step Three: Complete the \"September Journal Entries\" tab in your workbook using the Step Three data and updated scenario information in the appendix. Note that there was an additional line of products added this month, so you must first complete the \"Inventory Valuation\" tab in your workbook and copy the journal entries from the inventory evaluation page into your journal for this month to ensure the impact of merchandising is reflected in your reporting. [ACC-201-01] The following critical element is not graded: D. Step Four: Review posted entries to T accounts. Note that the numbers from your journal entries have been automatically posted to the General Ledger T accounts, but you must still review each account to be sure each amount has been accurately posted.

Solution

Income statement For Qtr. Ending 9/30/2018 Revenues: Bakery Sales      55,000.00 Merchandise Sales            221.00 Total Revenue      55,221.00 Cost of Goods sold      17,557.60 Gross Profit (FIFO)      37,663.40 Operating Expenses: Rent expense          4,500.00 Insurance expense             400.00 Depreciation expense             208.33 Misc. Expense             250.00 Office supplies expense             550.00 Business license expense             375.00 Advertising expense             200.00 Wages expense          1,956.00 Telephone expense             150.00 Total Operating expense        8,589.33 Operating Profit      29,074.07 Non-operating expenses: Interest expense            150.00 Net Profit (FIFO)      28,924.07 Statement of Retained Earnings For Qtr. Ending 9/30/2018 Beginning Balance: 0 Plus Net Income (FIFO)       28,924.07 Less Dividends       10,000.00 Ending Balance (FIFO)       18,924.07 Balance Sheet As of September 30, 2018 Assets Liabilities and Owner\'s Equity Current Assets: Current Liabilities: Cash      32,236.75 Accounts Payable            5,000.00 Baking Supplies        1,100.00 Wages payable                480.00 Merchandise Inventory (FIFO)            175.65 Interest Payable                150.00 Prepaid Rent        1,500.00 Total Current Liabilities            5,630.00 Prepaid Insurance        2,000.00 Misc. Supplies              50.00 Long term liabilities: Accounts receivable        7,700.00 Notes payable          10,000.00 Total Long term Liabilities          10,000.00 Total Current Assets      44,762.40 Total Liabilities          15,630.00 Long term/Fixed Assets: Baking equipment          6,000.00 Common Stock          16,000.00 Less: Accumulated Depreciation           (208.33)        5,791.67 Retained Earnings          18,924.07 Total Long term/Fixed ssets        5,791.67 Total Equity          34,924.07 Total Assets:      50,554.07 Total Liabilities and Equity          50,554.07 Closing Entries Qtr. Ending 9/30/2018 Bakery Sales       55,000.00 Merchandise Sales             221.00 Income Summary      55,221.00 Income Summary (FIFO) 26296.93 Baking supplies expense      17,400.00 Rent expense        4,500.00 Insurance expense            400.00 Depreciation expense            208.33 Misc. Expense            250.00 Office supplies expense            550.00 Business license expense            375.00 Advertising expense            200.00 Wages expense        1,956.00 Interest expense            150.00 Telephone expense            150.00 COGS (FIFO)            157.60 Income Summary (FIFO) 28924.07 Retained Earnings (FIFO)      28,924.07 Retained Earning       10,000.00 Dividends      10,000.00 Post Closing Trial Balance Qtr. Ending 9/30/2018 Account Debit Credit Cash       32,236.75 Baking Supplies          1,100.00 Merchandise Inventory (FIFO)             175.65 Prepaid Rent          1,500.00 Prepaid Insurance          2,000.00 Baking equipment          6,000.00 Accumulated Depreciation            208.33 Office Supplies                50.00 Accounts receivable          7,700.00 Accounts Payable        5,000.00 Wages payable            480.00 Interest Payable            150.00 Note payable      10,000.00 Common Stock      16,000.00 Retained Earnings      18,924.07 Total       50,762.40      50,762.40