061057
ACC111 GRADED PROJECT FORMS
FORM A
DATE ITEM
POST
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
DATE ITEM
POST
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
FORM B
DATE ACCOUNTS
POST
REF. DR. CR.
FORM C
ACCOUNT DEBIT CREDIT
FORM D
FORM E
Your project must be submitted as a Word document (.docx, .doc) or an Excel file (.xls
or .xlsx). Your project will be individually graded by your instructor and therefore will
take up to a few weeks to grade.
Be sure that your file contains the following information:
▪ Your name
▪ Your student ID number
▪ The lesson number
▪ Your email address
To submit your graded project, follow these steps:
▪ Go to http:
www.pennfoster.edu.
▪ Log in to your student portal.
▪ Click on Take Exam next to the lesson you’re working on.
▪ Follow the instructions provided to complete your exam.
Be sure to keep a backup copy of any files you submit to the school.
Project Goal
The goal of this graded project is to create the following financial statements for J & L
Accounting, Inc.:
• Balance sheet
• Income statement
• Statement of retained earnings
• Post-closing trial balance
The financial statements must be created in one Microsoft Word document (.doc or
.docx file). Alternatively, an Excel workbook may be used (.xls or .xlsx file). The Word or
Excel file will be uploaded for grading.
Instructions
Read the following instructions thoroughly before beginning your work to get familiar
with the project. Students who start on the project right away, thinking they’ll save time,
tend to get stuck and spend more time working through the project than is necessary.
The material you need to know in order to complete the project has been covered in the
textbook and the assigned exercises. If you understand the chapters and completed the
http:
www.pennfoster.edu
assigned homework problems, you should have no problem with the project.
The project is to be done by hand with a pencil and paper, using the blank forms
provided. At the end of the project are instructions for creating and uploading the
financial statements in a Word or Excel file for grading.
Note: The formatting of financial statements is important. They follow Generally
Accepted Accounting Principles (GAAP), which creates a uniformity of financial
statements for analyzing. This allows for an easier comparison, as all businesses follow
GAAP. The financial statements should be created exactly as shown or described in the
textbook. Inco
ect formatting will result in a loss of points.
Debits equal credits is a fundamental principle of accounting that must not be violated.
Debits not equaling credits allows for “cooking the books,” which means presenting
false information. It also allows for embezzlement, which is theft by management or
employees. If debits don’t equal credits, the cause may be a lack of understanding of
accounting principles or a lack of focus and concentration when making journal entries,
posting to ledger accounts, or completing math. Remember—instructors are available to
help you with material you may be struggling with.
Mistakes are best co
ected by going back over the work until the e
or is found. The
accounting equation must balance on the balance sheet. This is another fundamental
principle of accounting that can’t be violated. When the equation doesn’t balance and
the numbers are “fudged,” this is easily detectable by someone who knows accounting.
If your debits equal your credits and you understand which general ledger accounts
elong on which financial statements, then the accounting equation should balance.
The following financial statements are provided from the prior accounting period for J &
L Accounting, Inc.:
a. Post-closing trial balance
. Balance sheet
c. Income statement
d. Statement of retained earnings
J & L Accounting, Inc.
Post-Closing Trial Balance
December 31, 2017
Balance
Account Title Debit Credit
Cash, Business Checking $20,500.00
Accounts Receivable
Prepaid Rent
Vehicles 48,000.00
Accumulated Depreciation, Vehicles $12,000.00
Equipment 3,600.00
Accumulated Depreciation, Equipment XXXXXXXXXX
Accounts Payable
Common Stock 38,000.00
Retained Earnings 21,500.00
Dividends
Service Revenue
Advertising Expense
Rent Expense
Office Supplies Expense
Telephone Expense
Utilities Expense
Depreciation Expense
Totals $72,100.00 $72,100.00
J & L Accounting, Inc.
Balance Sheet
As of December 31, 2017
Assets
Cash, Business Checking $20,500.00
Accounts Receivable 0.00
Prepaid Rent 0.00
Vehicles $48,000.00
Less: Accumulated Depreciation, Vehicles 12, XXXXXXXXXX,000.00
Equipment 3,600.00
Less: Accumulated Depreciation, Equipment XXXXXXXXXX,000.00
Total Assets $59,500.00
Liabilities
Accounts Payable $0.00
Total Liabilities $0.00
Stockholders' Equity
Common Stock $38,000.00
Retained Earnings 21,500.00
Total Stockholders' Equity $59,500.00
Total Liabilities and Stockholders' Equity $59,500.00
J & L Accounting, Inc.
Income Statement
For the Month Ending December 31, 2017
Revenues
Service Revenue $10,275.00
Expenses
Advertising Expense $2,300.00
Rent Expense 1,000.00
Office Supplies Expenses 300.00
Telephone Expense 750.00
Utilities Expense 3,200.00
Depreciation Expense 1,100.00
Total Expenses 8,650.00
Net Income $1,625.00
J & L Accounting, Inc.
Statement of Retained Earnings
For the Month Ending December 31, 2017
Retained Earnings December 1, 2017 $19,875.00
Add: Net Income 1,625.00
Subtotal 21,500.00
Less: Dividends 0.00
Retained Earnings, December 31, 2017 $21,500.00
1. Using Form A from the graded project forms you downloaded (make as many copies
as necessary), set up the accounts for the general ledger and insert the beginning
alances for the accounts from the post-closing trial balance. The balances from the
post-closing trial balance become the beginning balances of the accounts for the next
account period.
2. Journalize the following transactions in the general journal using Form B from
the graded project forms you downloaded (make as many copies as needed). Each
journal entry’s debits should equal its credits. This is a fundamental GAAP that can’t be
violated. (A journal entry e
or, such as posting $1,010 instead of $1,100, can be
co
ected at the adjusting/co
ecting journal entries step.)
a. On January 1, 2018, a payment in cash for $12,000 is made for prepaying rent
for the entire year 2018.
. On January 4, 2018, accounting services are performed and payment is received
in cash for the amount of $1,900.
c. On January 9, 2018, a payment in cash for advertising is made in the amount of
$850.
d. On January 10, 2018, office supplies are purchased in the amount of $75 with
cash.
e. On January 14, 2018, accounting services are performed and payment is
eceived in cash for the amount of $2,725.
f. On January 20, 2018, the telephone bill for the amount of $660 is received and
paid with cash.
g. On January 20, 2018, the utility bill for $2,925 is received. The bill won’t be paid
until it’s due on Fe
uary 15, 2018.
h. On January 27, 2018, accounting services are performed on account in the
amount of $3,750.
i. On January 28, 2018, a payment in cash for $1,500 is made for a bill from an
advertising agency.
3. Post the general journal entries from the journal to the co
esponding general ledger
accounts, paying particular attention to whether they’re debits or credits. Use the Post
Ref. column to ensure that each line item of the journal entries is posted co
ectly to
each general ledger account. Posting from the journal to the general ledger is simply
ea
anging the information. If the debits equal the credits for a particular journal entry
and the information is posted co
ectly, the total of the debits should equal the total of
the credits in the general ledger.
4. Calculate the balances in the general ledger accounts, running the numbers several
times for accuracy. Often, debits won’t equal credits on the trial balance because a
hand-held calculator is used and the math is done only once. Using a hand-held
calculator can introduce e
ors. This is why an Excel spreadsheet is recommended.
However, if a hand-held calculator is all that’s available to you, be sure to do the math
enough times that you know the calculations are accurate. To calculate the balances in
the ledger accounts, do the following:
▪ Add the debits.
▪ Add the credits.
▪ Subtract the larger amount from the other, or, alternatively, keep the running
alance of the amount in the account and whether it’s a debit or credit on the
ledger.
5. Create an unadjusted trial balance from the balances in the general ledger accounts.
If the debit and credit columns are unequal, an e
or has been made and must be found
and co
ected. See Section 1.3 for an example of an unadjusted trial balance. Use Form
C from the Graded Project Forms you downloaded.
6. Journalize the following adjusting journal entries in the general journal, being sure
that the debits equal the credits:
a. Calculate and make the adjustment for the amount of prepaid rent that has been
used.
. Make an adjusting journal entry in the amount of $1,000 for depreciation of