Instructions Read ALL instructions before getting started! ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014. Given on the first two tabs are...

Instructions
    Read ALL instructions before getting started!
    ABC Corporation is a new company that buys and sells office supplies. Business began on January 1, 2014.
    Given on the first two tabs are ABC's 12/31/14 Unadjusted Trial Balance and a list of needed adjustments.
    1. Make all 16 adjustments on the "Adjusting Journal Entries" tab. Remember to include a description under each journal entry.
    2. Post the adjustments to the general ledger on the "12-31-14 T-Accounts" tab. You may have to add T-Accounts for new accounts.
     Link your T-Account entries to your Journal Entries. PLEASE NOTE THAT THE "BB" (BEGINNING BALANCES) FOR THE
     T-ACCOUNTS REPRESENT THE UNADJUSTED BALANCES AS OF 12/31/14.
    3. Once the 12/31/14 T-Accounts are complete, prepare the Adjusted Trial Balance. There may be some accounts with zero dollars, and you
     may have to insert lines for new accounts (some blank T-Accounts have already been provided for you). Link the Adjusted Trial Balance to your T-Accounts.
    4. Use the Adjusted Trial Balance numbers to complete the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.
     For purposes of the Income Statement, prepare using the multiple step format and assume that Rent Revenue, any Unrealized Holding Gains/Losses,
     Interest Expense, Interest Revenue, and any other Gains/Losses are NOT part of the major central ongoing operations of the company.
     Link your financial statements to your Adjusted Trial Balance. Use the Income Statement and Balance Sheet to finish the partially completed Statement
     of Cash Flows. Since this is ABC's first year of operations, several line items on the Statement of Cash Flows have already been supplied to you.
     If necessary, review financial statement preparation in Chapters 4 and 5 of your textbook for a quick refresher. Plan on using your knowledge gained in
     completing Chapter 21 to help with the preparation of the Statement of Cash Flows. Additionally, since this is ABC Corporation's first year of operations,
     the adjusted trial balance for all current assets and liabilities represents the change during the year for Statement of Cash Flows analysis purposes.
    5. When the Financial Statements are complete, make the closing entries on the "Closing Entries" tab being mindful of the four closing entries you've learned.
    6. When closing entries have been made, post the entries to the general ledger on the "Post-Close T-Accounts" tab. Make sure your adjusting
     journal entries are also posted on your Post-Close T-Accounts. They will not automatically flow from tab-to-tab. Suggestion: As an alternative, after you've
     finished posting your adjusting journal entries to the accounts in the "12-31-14 T Accounts" tab, make a duplicate of this worksheet to use for posting your
     closing entries and then just relabel the tab as "Post-Close T-Accounts." Just be sure to delete the original "Post-Close T-Accounts" tab already in the
     workbook before you do this since you can't have two worksheets with the same name.
    7. The final step is the Post-Closing Trial Balance, which will use the ending balances from the 12/31/14 T-Accounts after posting your closing entries.
     8. Double-check your work. Here are a few things to check for:
    -Adjusted Trial Balance: Make sure debit column and credit column total to the same figure at the bottom.
    -Net income from the income statement will flow through to the Statement of Retained Earnings.
    -Ending Retained Earnings from the Statement of Retained Earnings will flow through to the Balance Sheet.
    -Ending Cash balance from the Balance Sheet should match your ending Cash balance on the Statement of Cash Flows.
    -The Post-Closing Trial Balance should not have any revenue, expense, gain, loss, or other temporary accounts.
    -Check figure 1: Income from operations = $294,336.
    -Check figure 2: Total Current Assets = $1,164,429.
    -Check figure 3: Total Liabilities & Stockholders' Equity = $1,683,951.
    -Check figure 4: Cash flow provided by operating activities = $215,785.
    -Check figure 5: Post close Trial Balance debit and credit columns total $1,753,351.
    -Check figure 6: Cash flow provided by financing activities $1,200,268.
    -Remember: Neatness matters in Financial Statements. Print or Print Preview before submitting to make sure your statements are neat.
     Otherwise, management may send back to you for revision!
    -Include your work at the bottom of each tab as needed.
    -Ask questions prior to the day/night before the due date. The due date is clearly indicated on the course schedule.
    -Utilize formulas and worksheet linkings in your financial statements to improve accuracy and save time in completing the assignment.
    -Please take advantage of Excel by using formulas to calculate groups of numbers (i.e. "Total Liabilities and Stockholders' Equity").
    -DO NOT force any cells to match check figures given. Any adjustments in the T-Accounts or financial statements not supported by
     legitimate adjusting or closing entries will be considered financial statement misrepresentation sufficient to result in a failing grade.
    Final comments: This project is intended to make sure that you understand the accounting cycle as well as several key financial accounting transactions that you have
    studied during your Intermediate Accounting series. It is very important to take the necessary time on this project to master these concepts. The concepts mastered in this
    comprehensive problem will serve you well in the rest of your accounting curriculum.
    Please review the grading rubric tab as you start work on the assignment to make sure that you understand how your work will be evaluated. Please note that 100 points
    of the total grade on this assignment (25%) is based on your overall presentation of work and your use of Microsoft Excel features (cell links, formulas, etc.)
Unadjusted Trial Balance
    ABC Corporation
    Unadjusted Trial Balance
    December 31, 2014
        Debit    Credit
    Cash    $ 675,232
    Short term investments    167,000
    Fair value adjustment (Trading)    -
    Accounts receivable    190,300
    Allowance for doubtful accounts        $ -
    Inventory    -
    Purchases    350,000
    Prepaid insurance    24,600
    LT (Debt) investments (HTM)    177,824
    Land    75,000
    Building    150,000
    Accumulated depreciation: building        4,000
    Equipment    60,000
    Accumulated depreciation: equipment        20,000
    Patent    37,500
    Accounts payable        75,240
    Notes payable        235,000
    Income taxes payable        63,800
    Unearned rent revenue        36,000
    Bonds Payable        800,000
    Premium on Bonds Payable        61,771
    Common stock        86,000
    PIC In Excess of Par-Common Stock        13,000
    Retained earnings        -
    Treasury stock    49,000
    Dividends    41,000
    Sales Revenue        892,945
    Advertising expense    8,400
    Wages expense    67,600
    Office expense    21,700
    Amortization Expense    -
    Depreciation expense    24,000
    Utilities expense    31,000
    Insurance expense    73,800
    Income taxes expense    63,800
        $ 2,287,756    $ 2,287,756
Adjustments Needed
    1    On March 1, ABC purchased a one-year liability insurance policy for $98,400.
        Upon purchase, the following journal entry was made:
            Dr Prepaid insurance            98,400
                Cr Cash            98,400
        The expired portion of insurance must be recorded as of 12/31/14.
        Notice that the expired portion from March through November has been recorded already.
        Make sure that the Prepaid Insurance balance after the adjusting entry is correct.
    2    Depreciation expense must be recorded for the month of December.
        The building was purchased with cash on February 1, 2014 for $150,000 with a remaining useful life of 30 years and a salvage value of $6,000.
            The method of depreciation for the building is straight-line.
        The equipment was purchased with cash on February 1, 2014 for $60,000 with a remaining useful life of 5 years and a salvage value of $3,000.
            The method of depreciation for the equipment is double-declining balance.
        Depreciation has been recorded for the building and equipment for months February through November.
    3    On December 1, XYZ Co. agreed to rent space in ABC's building for $12,000 per month,
        and XYZ paid ABC on December 1 in advance for the first three months' rent.
        The entry made on December 1 was as follows:
            Dr Cash            36,000
                Cr Unearned rent revenue            36,000
        The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/14.
    4    Per timecards, from the last payroll date through December 31, 2014, ABC's employees have worked a total of 250 hours.
        Including payroll taxes, ABC's wage expense averages about $51 per hour. The next payroll date is January 5, 2015.
        The liability for wages payable must be recorded as of 12/31/14.
    5    On November 30, 2014, ABC borrowed $235,000 from American National Bank by issuing an interest-bearing note payable.
        This loan is to be repaid in three months (on February 28, 2015), along with interest computed at an annual rate of 6%.
        The entry made on November 30 to record the borrowing was: (for Statement of Cash Flow purposes, consider a financing item)
            Dr Cash            235,000
                Cr Notes payable            235,000
        On February 28, 2015 ABC must pay the bank the amount borrowed plus interest.
        Assume the beginning balance for Notes Payable is correct.
        Interest through 12/31/14 must be accrued on the $235,000 note.
    6    ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete
        physical inventory at year-end. A physical count was taken on December 31, 2014, and the inventory on-hand at
        that time totaled $75,000, which reflects historical cost.
        Record the 2014 Cost of Goods Sold and the 12/31/14 Inventory adjustment.
        Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level.
        A review of inventory data further indicated that the current retail sales value of the ending inventory is $110,000 and estimated costs of
        completion and shipping is 15% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory
        using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting
        for adjustments of inventory to market value.
    7    It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC realized
        that their intangible asset might be impaired on December 31, 2014. Record the impairment if any.
        The expected future net cash flows for this intangible asset totals $30,000, and the fair value of the asset is $27,500.
    8    On 7/1/14, ABC purchased 7,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury
        stock was $7 per share, or $49,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/14,
        ABC reissued these 7,000 shares of treasury stock at $10 per share. Record the journal entry required for the reissuance of the treasury stock.
    9    On 12/31/14, ABC issued 5,000 shares of $3 par value common stock at the closing market price of $7 per share. Prepare ABC's journal entry
         to reflect the issuance of the stock on 12/31/14.
    10    On 7/1/14, ABC sold 12% bonds having a maturity value of $800,000 for $861,771, resulting in an effective yield of 10%. The bonds are
        dated 7/1/14, and mature 7/1/19. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of
        amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/14.
        Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense.
    11    The following information is available for ABC Corporation at 12/31/14 regarding its investments in...