Assignment: Financial Statement Preparations
Scenario
It is time for the staff accountants to begin preparing daily accounting transactions. In preparation of the upcoming audit, the accountants must ensure that these transactions are correct and are free from any misstatement. Because this is a new subsidiary of the company, there are no beginning balances.
As a staff accountant, your job is to do the following:
1. Prepare the 10 transactions below by posting to the general journal. You should use an Excel spreadsheet to accomplish this task.
2. Post the general journal entries to the general ledger in the Excel spreadsheet.
3. Prepare a trial balance from the ending balances on the ledger. You should also use an Excel file for the trial balance.
Transactions
• Invested $50,000 in the business
• Paid $100 for phone service
• Purchased $35,000 equipment on credit
• Paid $3,000 for 3 months rent
• Paid $5,500 for 6 months of insurance
• Paid $1,000 for advertising on credit (Note: This is an expense to the company)
• Customer purchased $2,000 on account
• Customer in #7 paid $1,000 on account
• Paid for #6 advertising
• Sold to customer and received $5,000 cash
Task
Complete a set of financial statements based on the transactions and general ledger from the Phase 4 IP. The financials to be completed on an Excel spreadsheet are the following:
1. Income statement
2. Statement of owners' equity
3. Balance sheet
Based on the financial statements, prepare a memo to the President of LMO Company as to the financial performance of your company. Include the following:
1. 3 strategies that the company can employ to improve its performance and increase net income
2. Explanation of who might use the financial statements
Format your assignment according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
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