You are just starting an internship at a small public accounting firm. You receive a memo from the intern supervisor that outlines the assignment.
- Include one excel folder with different tabs for the adjusted trial balance, the income statement, and the balance sheet. A multi-step income statement and a classified balance sheet.
- Write a memo.
- You will need to add appropriate accounts in order to make the adjusting entries. Some adjustments will require you to add two accounts, others only one.
To: New intern Date: January 5, 2015
From: S. Stern, Intern Supervisor Subject: Summertime Co.
Prepare adjusting entries, an adjusted trial balance and financial statements for Summertime for 2014. Please start by putting the accounts in chart-of-accounts order and splitting the amounts between debits and credits. You will need the following information to make the adjusting entries.
- Bad debt expense is expected to be 1% of sales for the year
- Depreciation expense for the year is $5,000
- Summertime issued the 6% note payable on July 1, 2014, and interest is payable each June 30th thereafter.
- Summertime issued the 9% note receivable on March 1, 2014 and expects to receive payment of both the interest and principle on March 1, 2015.
- Employees have earned $6,200 in salaries that will be paid in January.
- Two-thirds of the unearned rent revenue was earned in 2014.
- The income tax rate is 30% and will be paid in January.
Unadjusted trial balance, 12/31/14
Accounts payable 32,000
Accounts receivable 43,700
Accumulated depreciation - equipment 20,000
Allowance for uncollectible accounts 3,500
Common stock 46,000
Cost of goods sold 116,000
Note payable (due 7/1/2018) 50,000
Note receivable (due 3/1/2015) 30,000
Prepaid rent 1,200
Rent expense 21,800
Retained earnings 20,000
Salaries expense 51,200
Sales revenue 244,000
Unearned rent revenue 6,000
This solution provides assistance with the finance questions.
Write a memo explaning the financial statements
Write a memo to Don Jones explaining the financial statements he should prepare at the end of each accounting period. Include a discussion regarding what information each report contains and how Don might use that information to manage his business.
Explain the steps in the accounting cycle.
you need to determine the basic financial statements and comment on each one. Include examples, such as account or account types. You should also discuss why the financial statements are important.
(please do not copy from library, use your own words)