2024 – Assignment is to create the following statements for J L Accounting Inc PROJECT GOAL

Assignment is to create the following statements for J & L Accounting Inc.:
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. This will help you to become familiar with what
is involved in the project. Some students start on the project
right away, thinking they’ll save time. Those students 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 and problems. If you understand the
chapters and completed the assigned homework problems,
you should have no problem with the project.
The project is to be done by hand with a pencil and paper.
Use the blank forms provided. At the end of the project, you’ll
be given instructions for creating and uploading the financial
statements in a Word or Excel file for grading.
Financial Accounting
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. Therefore, the financial statements should be
created exactly the same way shown or referenced in the textbook.
Failure to do so will result in a loss of points.
The project references “debits equaling credits.” This is a
fundamental principle of accounting that mustn’t be violated.
Doing so is not acceptable under any circumstance. Debits not
equaling credits allows for “cooking of the books,” which is
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, such as those presented in the textbook
and assigned homework problems, 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 of the lack-of-focus variety are best corrected
by going back over the work until the error is found.
The accounting equation must balance on the balance sheet.
This is another fundamental principle of accounting that
can’t be violated and if so is completely unacceptable. 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 belong on which financial statements,
then the accounting equation should balance. It’s
really all about understanding the concepts and applying
that understanding.

 

The following financial statements are provided from the prior
accounting period for J & L Accounting, Inc.:
a) Post-closing trial balance
b) Balance sheet
c) Income statement
d) Statement of retained earnings
Lesson 2 29
J & L Accounting, Inc.
Post-Closing Trial Balance
December 31, 2014
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 600.00
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
30 Financial Accounting
J & L Accounting, Inc.
Balance Sheet
As of December 31, 2014
ASSETS
Cash, Business Checking 20,500.00
Accounts Receivable 0.00
Prepaid Rent 0.00
Vehicles 48,000.00
Less: Accumulated Depreciation, Vehicles 12,000.00 36,000.00
Equipment 3,600.00
Less: Accumulated Depreciation, Equipment 600.00 3,000.00
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, 2014
REVENUES
Service Revenue 10,275.00
EXPENSES
Advertising Expense 2,300.00
Rent Expense 1,000.00
Office Supplies Expense 300.00
Telephone Expense 750.00
Utilities Expense 3,200.00
Depreciation Expense 1,100.00
TOTAL EXPENSES 8,650.00
NET INCOME 1,625.001