Study Unit. Bath Designs

Transcription

1 Study Unit

2 Throughout this study unit, you ll act as the accountant for a fictitious company,. A workbook accompanies the study unit. The workbook describes the company and describes the company s business transactions for the month of January. You ll begin your work by recording the day-to-day transactions manually in a journal, the pages of which you ll find in the workbook. You ll then post the entries to a general ledger and prepare a number of financial statements and reports for the company. In addition, you ll load your journal data into a software program that can generate printouts of the financial statements. A number of the printouts will serve as your examination, which you ll need to mail to the school. Everything you need to do your job as the accountant for is included in your shipment. The CD packaged at the back of the workbook contains the accounting software for the company. When you complete this study unit, you ll be able to Convert a narrative of a corporation s day-to-day transactions into entries in an accounting journal Post journalized entries to a general ledger Prepare end-of-period adjustments Prepare financial statements and reports for the end of the corporation s fiscal year Preview iii

3 BACKGROUND INFORMATION 1 Layout of Your Study Unit 1 Layout of Your Workbook 2 SOLVING THE ACCOUNTING PROBLEM MANUALLY 3 Journalize the Transactions 3 Post the Transactions to the Ledger Accounts 6 Prepare a Trial Balance 8 Adjust the Trial Balance and Prepare the Financial Statements 9 Journalize and Post the Adjusting Entries 10 Journalize and Post the Closing Entries 10 Prepare a Post-Closing Trial Balance 10 MENU FEATURES OF THE WINDOWS ACCOUNTING SOFTWARE 11 The File Menu 11 The Edit Menu 14 The Data Menu 15 The Options Menu 16 The Reports Menu 17 Extras 19 The Window Menu 20 The Help Menu 21 SOLVING THE ACCOUNTING PROBLEM USING THE GENERAL LEDGER SOFTWARE 22 Windows Installation and Start-Up 22 Create the Accounting Exercise File 23 Journalize the January Transactions 24 Print Out a Trial Balance 26 Journalize and Post the Adjusting Entries 27 Print Out the Financial Reports 29 Print Out a Post-Closing Trial Balance 30 Save the Post-Closing as a Separate File 31 Proofing Totals 32 EXAMINATION GRADING CRITERIA 33 SUBMISSION REQUIREMENTS 34 EXAMINATION COVER SHEET 35 Contents v

4 BACKGROUND INFORMATION In this exercise, you ll be working for, a company that designs and manufactures commercial bath units. You begin your position as assistant controller on January 1. Your job is to oversee the daily accounting operations, prepare interim financial statements, and perform end-of-the-month adjusting and closing entries. Layout of Your Study Unit This study unit explains how to complete the accounting exercise and gives detailed steps for using the Klooster & Allen General Ledger Software in meeting your exam requirements. Be sure to read all the directions carefully before entering any transactions into the computer. It won t be necessary to open the books in the computer. All the accounting information up to December 31 is already contained in the General Ledger Software CD. Journal proofing totals are at the end of this study unit. When instructed to do so, refer to the totals to proof the journals that you ll compose by hand. Your manual record needs to be accurate because you ll use that data when journalizing the transactions in the computer program. You need to send several computer-generated reports to the school as your exam. These three reports are listed here. Exam Printout 1: Income Statement Exam Printout 2: Balance Sheet Exam Printout 3: Post-Closing Trial Balance 1

5 Layout of Your Workbook Carefully look over the workbook and pay particular attention to workbook pages 5 through 7. These pages list one month s transactions for. As part of your exercise, you ll need to journalize these transactions both on paper and in the computer. In addition to the computer software, your workbook contains journal and ledger pages, job cost records, schedules of accounts receivable and payable, employer payroll tax allocations, unfinished jobs, a 10-column worksheet, forms for your financial statements, and a form for a post-closing trial balance. Page 4 in your workbook offers instructions for completing the documents by hand. The instructions numbered 4, 6, and 9 refer to the manual tasks that correspond to your various exam printouts. Pages 1 and 2 in the workbook explain how to complete the exercise using the Klooster & Allen General Ledger Software. Before working on the computer, you ll complete the entire accounting cycle by hand. Thus, in this accounting exercise, you ll practice filling out accounting records manually as well as electronically. The next few sections in your study unit will explain in greater detail all the tasks involved in your accounting exercise. You re now ready to get started on your accounting exercise in earnest. Good luck! 2

6 SOLVING THE ACCOUNTING PROBLEM MANUALLY To match its particular needs, a specialized business may require you to modify any bookkeeping and accounting procedures you ve learned. However, the fundamentals are always the same for all businesses. With this accounting exercise, you ll be able to practice all the fundamentals. Thus, you ll grow more comfortable creating journals, ledgers, and reports by hand as well as with a computer. The manual and computer accounting skills you ll acquire will make you more competitive overall in the job market. Journalize the Transactions Analyze the Narrative and Compose the Entries You should already be somewhat familiar with the types of transactions described in your workbook. On page 3 in the workbook, there s a description of the company. The narrative of the transactions, which starts on workbook page 5, is a detailed, day-by-day listing of all the company s business throughout January. The company description and this listing of transactions serve as the input for the accounting process in this exercise. Analyze the narrative so you can compose appropriate entries for the journal that starts on workbook page 11. Record the transaction entries for January starting on journal page 1 (which is on page 11 in your workbook). Complete your manual entries one day at a time. For convenient reference, Table 1 shows the Chart of Accounts for. Let this chart be your guide when you re deciding how to describe the transactions in your journal. So you can fit all your entries in the journal pages that are provided, try to restrict yourself to one line for each debit or credit entry. Total and foot the journal when you finish. 3

7 Table 1 CHART OF ACCOUNTS Assets Account Number Account Title Cash Accounts Receivable Allowance for Doubtful Accounts Direct Materials Indirect Materials and Factory Supplies Work in Process Finished Goods Prepaid Insurance Office Supplies Factory Equipment Accumulated Depreciation Factory Equipment Office Equipment Accumulated Depreciation Office Equipment Organization Costs Patents Liabilities Account Number Account Title Accounts Payable Salaries Payable Employees Income Tax Payable FICA Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Property Tax Payable Income Tax Payable Owner's Equity Account Number Account Title Common Stock ($10 Par) Paid-In Capital in Excess of Par Common Stock Retained Earnings Income Summary Revenues Account Number Sales Sales Discounts Account Title 4

8 Table 1 CHART OF ACCOUNTS Cont. Expenses Account Number Account Title Cost of Goods Sold Factory Overhead Advertising Expense Print Advertising Expense Internet Electricity Expense Insurance Expense Selling Insurance Expense General Sales Salaries Expense Officers' Salaries Expense Office Salaries Expense Depreciation Expense Office Equipment Office Supplies Expense Payroll Taxes Expense General Postage Expense General Property Taxes Expense Rent Expense General Telephone Expense Travel & Entertainment Expense Uncollectible Accounts Expense Miscellaneous Expense Other Revenue Account Number Account Title Interest Income Other Income Other Expense Account Number Account Title Interest Income Other Expense Corporate Income Tax Account Number Account Title 7 10 Income Tax Expens e Accounts Receivable Ledger Bright Interior Systems Grant Company Hughes Building Company Kian Corporation Maplewood Designers Pickens Contractors Powell Contractors Inc. Ruth Builders Ryan Sales Company Seng Contractors Tarara Design Corporation Accounts Payable Ledger Foley Tool Company Glory Container Corporation Liberty Wood Products Company Neola Supply Company Ohio Plastics Company Rorick Hardware Inc. 5

9 Check Your Journal Total Now, take some time to check the accuracy of your journal by comparing your journal total to the one shown on page 32 of this study unit. If you find a discrepancy, go back through your journal entries and make any necessary corrections. Use the ruling method to draw a single line through the incorrect account title or amount and write the correct information directly above the line. Initial any corrections you make. Right now, the Posting Reference column in your journal should be blank. After you ve proofed your journal, you ll need to post the information to the individual accounts contained in the general ledger. As you post each entry, you ll insert the appropriate account number in the Posting Reference column of your journal. Post the Transactions to the Ledger Accounts The general ledger accounts start with Account 110 on workbook page 20. Note that a checkmark is in the ledger s Posting Reference for the balance of the Cash account. This checkmark indicates that the posted data wasn t derived from your journal entries for January. Balances already entered in your ledger accounts were derived from transactions that had been recorded previously, through December. Table 2 shows the opening trial balance, which was composed before any transactions for January had been recorded in your manual journal. These balances are the ones that have already been posted to the ledger on pages in your workbook. Transfer Each Journal Entry to the Appropriate Ledger Referring to your journal, enter the amounts of the debit or credit in the ledger s Debit or Credit column. In the ledger s Posting Reference column, enter the journal page number J1, J3, J13, and so on from which each transaction was 6

10 Table 2 TRIAL BALANCE As of 01/01/XX ACCOUNT NUMBER ACCOUNT TITLE DEBIT CREDIT 110 Cash 81, Accounts Receivable 87, Allowance for Doubtful Accounts 3, Direct Materials 71, Indirect Materials and Factory Supplies 19, Work in Process 130, Finished Goods 21, Prepaid Insuranc e 7, Office Supplies 1, Factory Equipment 251, Accumulated Depreciation Factory Equipment 101, Office Equipment 62, Accumulated Depreciation Office Equipment 21, Organization Costs 7, Patents 13, Accounts Payable 46, Employees Income Tax Payable 15, FICA Tax Payable 9, Federal Unemployment Tax Payable State Unemployment Tax Payable Property Tax Payable 6, Income Tax Payable 7, Common Stock ($10 Par) 375, Paid-In Capital Excess of Par CS 55, Retained Earning s 114, Totals 756, ,

11 taken. For each transaction that you post to the ledger, enter the appropriate account number in your journal s Posting Reference column. Prepare Appropriate Schedules Prepare the Schedule of Accounts Receivable Prepare the Schedule of Accounts Payable On workbook page 45, you ll find the accounts receivable and accounts payable schedules. Referring to the appropriate ledger, enter the customer or vendor name and the balance onto the schedules. Follow the order of the ledger. You don t need to list accounts with zero balances. Prepare the Schedule of Employer Payroll Taxes Allocation Prepare the Schedule of Unfinished Jobs On workbook pages 46 and 47, you ll find the schedules of employer payroll tax allocations and unfinished jobs. Use the information from the individual job cost records to complete the schedules. Remember to include indirect labor, superintendent s salary, sales salaries, officers salaries, and office salaries after the direct labor on the schedule of employer payroll tax allocations. As a check, the total columns should be as follows: FICA $4,801.26; FUIT $502.09; SUIT $3, (rounded); Total Taxes $8, (rounded). Prepare a Trial Balance A trial balance prepared now will prove the equality of the debits and credits in your ledger accounts. On workbook pages 48 51, you ll find a 10-column worksheet. Referring to your general ledger, determine the balance in each account. Then, record the debits and credits in the Trial Balance column of the worksheet. Follow the order in the chart of accounts (Table 1) when listing the accounts in your trial balance. 8

12 Adjust the Trial Balance and Prepare the Financial Statements So far, you ve accounted for January s business transactions between and other companies and individuals. However, during the accounting period, other changes have occurred that have affected financial condition. For instance, factory and office equipment depreciated over time. Since these events have affected the financial standing of, they must be entered into the accounting system before the financial statements can be prepared. The events are entered as adjustments to the accounting record. On workbook page 7, you ll find a list of the adjusting entries that must be made to the accounts. Record these entries in the Adjustments column of your worksheet. Then check the total for the adjusting entries with the total on page 32 of this study unit. Once that s done, adjust the trial balance by filling in the next column of the worksheet. After you have an adjusted trial balance, complete the 10- column worksheet. Use the data you compile on your worksheet to prepare your financial statements. Multiple columns are used on the financial statements to make them easier to read. You won t be using any debit or credit columns on the financial statements. The Income Statement The form for the income statement is on workbook page 52. The first two lines of the statement heading are already done for you. Complete the third line. Show revenue first, followed by an itemized and totaled list of expenses. Then, calculate net income to double-check the accuracy of your worksheet. The Balance Sheet The form for the balance sheet is found on your workbook pages The worksheet and the statement of retained earnings are used to prepare balance sheet. 9

13 The Retained Earnings Statement The form for the retained earnings statement is found on workbook page 53. The Balance Sheet columns of your worksheet provide the information for this statement. Journalize and Post the Adjusting Entries Keep in mind that the worksheet simply helps you organize end-of-period work. Writing the adjustments on the worksheet has no effect on the ledger accounts in the accounting system. The only way to change the balance of a ledger account is to make a journal entry. Therefore, you need to copy the adjustments from your worksheet to the journal. The adjusting entries are made on the last day of the accounting period, which for is January 31. Post each adjusting entry in the appropriate ledger account. In your ledger s Posting Reference column, mark down the journal page that provided the entry. Confirm that the entry was posted by marking the account number in your journal s Posting Reference column. Journalize and Post the Closing Entries The balances of the accounts to be closed are readily available from the Income Statement and Balance Sheet columns of the worksheet. To actually change the ledger accounts, you must journalize the closing entries and then post them to the general ledger. Like the adjusting entries, closing entries are made on the last day of the accounting period. Post each closing entry in the appropriate ledger account. In the ledger s Posting Reference column, mark down the journal page that provided the entry. Confirm that the entry was posted by marking the account number in the journal s Posting Reference column. Prepare a Post-Closing Trial Balance After posting the closing entries, prepare a post-closing trial balance to prove the equality of the debit and credit balances in the general ledger. The form for the post-closing trial 10

14 balance is found on workbook page 56. List the ending balance of each general ledger account that remained open at the end of the year. MENU FEATURES OF THE WINDOWS ACCOUNTING SOFTWARE Eight drop-down menus are available at the top of the General Ledger Software screen. Using these menu items allows you to create and edit data files for other types of accounting problems you may wish to solve on the computer. The data in your General Ledger Software files can even be converted into a spreadsheet format for use in other Windows programs. The File Menu Figure 1 shows the nine menu items that appear in the File drop-down menu. Shortcut codes are provided when available for accessing the menus and the menu items that they contain. Pressing, for example, the key combination Ctrl + N will open a new file. These shortcut keys allow you to access the items directly, without having to pull down, or open, the menu first. The types of shortcut keys are listed on the drop-down menu itself. Pressing Ctrl + O, for instance, will access the Open item even if the File menu isn t already pulled down. If you wanted to access the Save item, you would press Ctrl + S. For the same purpose of allowing quick access, items in some of the other menus use function keys (at the top of your keyboard) rather than the Control key + Letter combinations. Also, some options will have a letter in the word underlined. By pressing Alt + the letter underlined, you can access that option without having to click on it with a mouse. Of course, all the menus and menu items can be accessed by clicking on them with the mouse. In addition, some of the menu items that may be used frequently have been assigned 11

15 FIGURE 1 The File Drop-Down Menu toolbar buttons, which appear below the menu bar. Open, Save, and Exit, for instance, can all be accessed as toolbar buttons instead of as menu items. New The New menu item establishes empty accounting system files to which you can begin entering and posting data. Be aware that this menu item erases any existing data in the computer s active memory; however, the New item won t remove any data that has been saved to a disk drive. When selecting the New item, you ll be prompted to enter a user name that will appear at the top of your screen and on any printed reports. (See the Create the Accounting Exercise File section later in this study unit for detailed instructions on doing this.) Key your name carefully because you ll be unable to change it without establishing new accounts or opening an already existing file from a disk. 12

16 Open The Open menu item loads the accounting data from a file on a disk drive and places the data in the computer s active memory. When using this item, you ll be able to select the drive, directory, and data file. Close The Close menu item closes any active files or windows currently open. You ll be asked if you want to save the current file if there are any unsaved changes. Save The Save menu item saves the General Ledger Software data file currently in memory to the current disk drive and with the current file name. Save As The Save As menu item saves the active data file along the path and with the file name that you specify. If you key a new file name for an existing file, a new copy will be saved under that new name. The earlier version of the file remains under the earlier name. If you type the name of an existing file, a message warning you that you ll be overwriting an existing file will appear. Print The Print menu item allows you to print reports. Clicking on Print or pressing Ctrl + P brings up the Print Setup dialog box where you choose the printer, paper size, and paper orientation. When you press OK in the Print Setup dialog box, your report will print. Print Setup The Print Setup menu item also allows you to print reports following the same procedure as above. 13

17 Change Printer Font The Change Printer Font menu item allows you to choose the font, font style, and font size for your printed reports. Simply scroll through the selections, make your choices, and click OK. Your reports will print in your chosen font style. Exit Use this menu item to end your General Ledger Software session. You ll be prompted to save your data file if it contains unsaved changes. The Edit Menu Figure 2 shows the menu items available in the Edit dropdown menu. FIGURE 2 The Edit Drop-Down Menu Find When you choose the Find menu, a dialog box will appear that allows you to specify the data you wish to find. You 14

18 may specify the journal type, date, reference, account title, account number, vendor name, customer name, and debit or credit amount. If a matching journal entry is found, the entry will be displayed and highlighted in the journal entries list window located at the bottom of the Journal Entries window. You can enable the Find menu item only if one of the tabs in the Journal Entries window is currently active. Find Next The Find Next menu item is enabled only if the Find menu item was previously executed. The Find Next menu item will find the next occurrence of the data field previously specified in the Find dialog box. The Data Menu Figure 3 shows the menu items available in the Data dropdown menu. FIGURE 3 The Data Drop-Down Menu 15

19 Setup Accounting System In the Setup Accounting System dialog box, you can enter the information required to set up a computerized accounting system for instance, you ll find options under Business Organization, Type of Business, and Accounting System. In addition, clicking on the Journal Wizard tab will help you set up various journals. Maintain Accounts The Maintain Accounts item allows you to see and maintain the Chart of Accounts, the Vendor list, and the customers list. It also allows you to add accounts to any of the lists. Clicking on Accts. in the toolbar will also bring you to the Maintain Accounts item. Journal Entries This menu item allows you to access the general, purchases, cash payments, sales, and cash receipts journals. Clicking on Journal in the toolbar will also access these journals. Other Tasks The Other Tasks item allows you to reconcile the company s checking account. Clicking on Other in the toolbar will also take you to the same place. The Options Menu Figure 4 shows the menu items available in the Options drop-down menu. Generate Closing Journal Entries The Generate Closing Journal Entries item allows you to generate and post the closing journal entries. 16

20 FIGURE 4 The Options Drop-Down Menu Purge Journal Entries The capacity of the General Ledger Software is limited. Once you reach this capacity, you must purge or erase the existing journal entries before you can make additional entries. Since the account balances are updated as journal entries are posted, these balances will remain correct even after the journal entries are purged. Purge Invoices and Purchase Orders This item also deletes all the entries in the invoices and purchase orders. The Reports Menu Figure 5 shows the menu items available in the Reports drop-down menu. 17

21 FIGURE 5 The Reports Drop-Down Menu Report Selection Choosing the Report Selection item gives you access to the Report Selection window. You can also access this window by clicking on the Reports button on the toolbar. From the window you can choose one of the accounting system reports. If there s insufficient data to generate a particular report, the button will be dimmed to indicate that it s inactive. By simply clicking the appropriate button, you choose the desired report. The chosen report will display by clicking OK. Graph Selection If you want to display the income statement, expense distribution, top customers, the balance sheet, or sales in graph form, the Graph Selection item enables you to do so. You can also access this window by clicking on Graphs in the toolbar. 18

22 Explore Accounting System With the Explore Accounting System window, you can access data stored by the software if you need to perform audit checks, check account activity, isolate errors, and do other tasks that are helpful to managing account information. Extras Figure 6 shows the menu items available in the Extras drop-down menu. FIGURE 6 The Extras Drop-Down Menu Planning Tools Click on Planning Tools and you ll get the financial planning wizards. Here you can calculate a savings plan for college, a personal savings plan, loan payments, retirement contributions and income, and note payments and interest. Clicking on Tools in the toolbar will also take you to the financial planning wizards. 19

23 Calculator Clicking on the Calculator button or Calculator in the Options menu will bring you a calculator on screen that you can use for figuring. Once the calculator appears, a Help menu will be available for the calculator. Use that Help menu for a detailed explanation of the calculator s operation. The Window Menu Figure 7 shows the Window drop-down menu. FIGURE 7 The Window Drop-Down Menu As you re working with the General Ledger Software, you can open a number of different windows at the same time. You can, for example, edit your chart of accounts while your list of vendors and your general journal are on screen. All the open windows will be listed in the Windows drop-down menu. The active window can be identified by the checkmark. The active window is the window in the foreground, in front of all the other windows. To activate a different window and bring it to the front of all the others, simply click the name in the Window list. To close all the open windows at once, use the Close All Windows selection. 20

24 The Help Menu Figure 8 shows the menu items available in the Help dropdown menu. FIGURE 8 The Help Drop-Down Menu To access the Help menu, click on Help Contents and Index. The Help menu provides access to additional information on operating the software. It includes a searchable index similar to the ones found in other Windows programs. The Help contents for General Ledger Software cover topics from common tasks to system setup. On-screen information on the topics is readily available through the Help menu. A Help button also appears in many windows. Clicking on the button will take you directly to the topic most closely associated with that particular window or dialog box. The About General Ledger Software item can be used to display copyright information about the software. 21

25 SOLVING THE ACCOUNTING PROBLEM USING THE GENERAL LEDGER SOFTWARE Before you can begin making any computer entries, you need to launch the accounting program contained on the Klooster & Allen General Ledger Software disk. The instructions in your study unit will guide you through using the Windows version of General Ledger Software. You need to have Windows 3.1 or higher and a CD-ROM drive to run the software. Installation and startup instructions are as follows. Windows Installation and Start-Up 1. Insert the General Ledger Software CD in your CD-ROM drive. 2. The start-up should launch automatically. 3. If the program doesn t launch automatically, browse to the CD-ROM and double-click on the setup.exe. file. 4. Follow the prompts on the screen. 5. To launch the program, click on the, Inc. icon in the General Ledger Software program folder on your Start menu. Note: A Help menu is available on the menu bar or by pressing the F1 key. The menu provides quick access to additional information about how to operate the software. Use the Help menu to answer questions you may have while running the software program. If you have problems activating the Help menu, see page 21 of this study unit and read about accessing the Help menu. 22

26 Create the Accounting Exercise File 1. Open the file. Click on the Open toolbar button, and double-click on.ia6 to open the file (Figure 9). FIGURE 9 The Open Window 2. Register your name. Carefully key your name in the User Name field and click the OK button. Your name will now appear at the top of each page of any printed report (Figure 10). 3. Name the problem with your student number. From the Data menu at the top of the window, click on Setup Accounting System. A window will open up. On the Company Info tab, key your student number in the Problem Name field. Check to make sure that the number FIGURE 10 User Name Dialog Box you keyed is the exact same eight-digit student number that appears on your student ID card and course material shipping labels. 23

27 Once you re certain the number is correct, click the OK button. A window will pop up asking you to verify the changes you ve made. If everything is correct, click the Close button next to the OK button. Along with your name, your student number will now appear at the top of each page of any printed report. Certain printed reports are going to serve as your exam. It s important that each page of these reports contains your correct name and student number. 4. Save the file with a unique name. Click on the Save As command in the File menu and save the file to the drive and directory containing your data files. If you don t have room on drive C or don t wish to save the file there, you can save it to a data disk in a different drive. Key a file name of (your name).ia6 and then click the Save button. Journalize the January Transactions 1. Click on the Journal toolbar button to access the file s general journal. See Figure 11 for an example of the General Journal window. FIGURE 11 The General Journal 2. Key the entries from your proofed journal into the computer. At this time, do not key the adjusting entries. 24

28 Key the date for each entry. Leave the Reference field blank. You can display the chart of accounts by clicking on the Chart of Accounts button on the bottom of the journal window. Note that the account descriptions for are already registered in the General Ledger Software. When you re entering each transaction, just key in the account number and press Tab. Using the chart of accounts, the computer will automatically insert the account title to match the account number and will move your cursor to the Debit column. Use your mouse or the Tab key to move from cell to cell in the computer journal. After you ve keyed the journal entries, click on the Post button or press Enter. 3. Display the journal entries. Click on the Reports toolbar button to display the Report Selection window. Click on Journals. See Figure 12 for an example of the Report Selection window that will appear. FIGURE 12 The Report Selection Window Verify the date of 01/01/09. Click the OK button. 25

29 Choose Include All Journal Entries. Click the OK button to display the general journal report. Check the journal report for errors. If you want a printed report to proof, click the Print button. 4. Make any necessary corrections to the journal entries. In the General Journal window, click on the entry to correct, then click on the cell to highlight the cell to correct (Figure 13). FIGURE 13 Correcting a Journal Entry Make the necessary change or changes, and click the Post button or press Enter. Print Out a Trial Balance Note: The computer automatically posts all journal entries to the general ledger for you. Thus, you don t have to key these entries separately in the computer. 1. Display the trial balance. Click on the Reports toolbar button to display the Report Selection window. 26

30 Click on Ledger Reports. Make sure Trial Balance is highlighted below Choose a Report to Display. Click OK to display the trial balance window as shown in Figure 14. FIGURE 14 The Trial Balance Click on the Print button to print that report. Journalize and Post the Adjusting Entries 1. Enter the adjustments in the general journal (Figure 15). FIGURE 15 Entering the Adjustments in the General Journal 27

31 Use 01/31/09 as the date for all the adjusting entries. To add or change the date, double-click on the date field and select the date from the calendar. Key ADJ ENT in the Reference Field. 2. Key the adjusting entries into the computer. Use your mouse or the Tab key to move from cell to cell in the journal. After you key the adjusting entries, click on the Post button or press Enter. 3. Display the adjusting entries. Click on the Reports toolbar button to display the Report Selection window. Click on Journals under Select a Report Group. Click on General Journal under Choose a Report to Display. Click OK to display the Journal Report Selection window. Click on Customize Journal Report and a new window will pop up. In the Reference drop-down list, select ADJ ENT (Figure 16). Click OK, and the adjusting entries report will display. FIGURE 16 Setting Up to Display the Adjusting Entries 28

32 4. Make any necessary corrections to the adjusting entries. In the General Journal window, click on the entry to correct, then click on the cell to highlight the cell to correct. Make the necessary change or changes, and click the Post button or press Enter. Print Out the Financial Reports Since the computer automatically prepares the financial statements, a 10-column worksheet is unnecessary. Simply click on the Reports toolbar button to display the Report Selection window. Before you begin printing out the two reports, click on the Save toolbar button to save your file. Print Out the Income Statement Exam Printout 1 1. Click on Reports in the Toolbar. Under Select a Report Group, click on Financial Statements. Under Choose a Report to Display, click on Income Statement, and then click OK and the Income Statement will display (Figure 17). FIGURE 17 The Report Selection Dialog Box 29

33 2. Click on the Print button to print the report. Make sure your name and student number are at the top of each page of the printout. 3. Set aside the printout with the exam cover sheet from the back of this study unit. Print Out the Balance Sheet Exam Printout 2 1. Click on Reports in the Toolbar. Under Select a Report Group, click on Financial Statements. Under Choose a Report to Display, click on Balance Sheet, and then click OK and the Balance Sheet will display. 2. Click on the Print button to print the report. Make sure your name and student number are at the top of each page of the printout. 3. Set aside the printout with the exam cover sheet from the back of this study unit. Print Out a Post-Closing Trial Balance Exam Printout 3 1. Click on the Options menu. Figure 18 shows the dropdown list found in the Options menu. Select Generate Closing Journal Entries from the drop-down menu. When the dialog box appears, click the Yes button, then click OK. 2. Display the post-closing trial balance. Click on Reports in the Toolbar. Under Select a Report Group, click on Ledger Reports. Under Choose a Report to Display, click on Trial Balance, and then click OK and the Trial Balance will display. Click on the Print button to print the report. 3. Make sure your name and student number are on every page of the printout. 30

34 FIGURE 18 Close the books by selecting Generate Closing Journal Entries. 4. Set aside the printout with the exam cover sheet from the back of this study unit. Inventory all your exam printouts using the checklist on the cover sheet. Once you re certain you have all the exam printouts assembled, mail them along with the cover sheet at the back of this study unit to the school for grading. Save the Post-Closing as a Separate File 1. Click on the Save As command in the File menu. Save the file to the drive and directory containing your data files. 2. Give the file a unique name. Key a file name of Bath Designs Post Closing (your name).ia6 and click the OK button. 31

35 Proofing Totals General Journal The total for the debit and credit columns on the general journal before the adjusting and closing entries are made should be $932, If your journal doesn t have this total in the debit and credit columns, there s an error in your journal. Please go back through your journal and check your entries until you find the error. Adjusting Entries The total for the adjusting entries is $18, Note: The figure for Factory Overhead and Cost of Goods Sold is rounded. 32

36 Examination Grading Criteria The following values are assigned to each printout for a total of 100 points: Balance Sheet Income Statement Post-Closing Trial Balance 35 points 30 points 35 points Each General Ledger account amount on each statement is worth 1.4 points. For example, the Balance Sheet has 25 different General Ledger accounts on it. Each amount is worth 1.4 points; therefore, 25 accounts times 1.4 points provides a possible 35 points for the Balance Sheet. 33

37 Submission Requirements Print out the Balance Sheet, Income Statement, and Post- Closing Trial Balance for the project from the General Ledger Accounting Software and include them with the completed Cover Sheet (found at the end of this study unit) for mailing to the following address: The Penn Foster Student Service Center is under contract with Penn Foster College. Penn Foster Student Service Center 925 Oak Street Scranton, PA Before mailing, make sure your name and student ID number are at the top of each page submitted. 34

38 COVER SHEET FOR YOUR INSTRUCTOR'S USE GRADE GRADED BY STUDENT NUMBER: EXAMINATION NUMBER PLEASE PRINT NAME ADDRESS CITY STATE/PROVINCE Check if this is a new address. P HONE ZIP/POSTAL CODE CUT ALONG THIS LINE. Carefully check your financial statements and post-closing trial balance against the ones you ve completed manually. Both versions should contain the same information. If there are any discrepancies, determine and correct the error or errors. Fill out the top half of this cover sheet with your name, address, and student number. Make sure your name and student number are also on each page of your examination printouts. Use the checklist below to inventory these computer printouts. Then, attach the printouts to this cover sheet for submission to the school. Mail in the cover sheet and printouts for scoring as soon as you complete them. Do not wait until an examination from another study unit is ready. Exam Printout 1: Income Statement Exam Printout 2: Balance Sheet Exam Printout 3: Post-Closing Trial Balance TOTAL BEFORE MAILING, MAKE SURE YOUR NAME AND STUDENT NUMBER ARE AT THE TOP OF THIS COVER SHEET AS WELL AS AT THE TOP OF EACH PAGE OF YOUR EXAM PRINTOUTS. Kitchen Concepts 35