Monica has followed your advice and on January 11, 2012 she deposited $10,000 into a business bank account for PBP and started pursuing her dream.
It has been a hectic year and in June Monica contacts you to ask your advice in helping her to determine whether she can leave the grocery store and work the photography business full time. She provides you with a list of the things that have happened during the past 6 months. She has applied for a small business loan of $25,000 and has been told by her banker that she needs a set of books (whatever that means) and financial statements (???) along with a listing of her fixed assets at Book Value. The banker told her that the books should be closed for the year as ended June 30, 2012 with corresponding financial statements.
1. Create the Journal for the transactions and Post these to the T-accounts.
2. Create the Unadjusted trial balance.
3. Make the necessary Adjusted journal entries.
4. Create the Adjusted trial Balance.
5. Complete the Financial Statements: Income Statement, Retained Earnings, Balance Sheet.
6. Close the books using appropriate journal entries with T-accounts.
7. Determine the BV of the Fixed Assets