Ocean Atlantic Co.: Comprehensive Problem
Comprehensive Problem 2
ACCT 2301, Fall 2011, Webb
Due Date: Wed, Nov 2 @ 11:45 p.m.
1. You will be doing the accounting for a merchandising business, Ocean Atlantic Co. Ocean Atlantic is completing their first year of operations as a corporation. The business is located on the Atlantic Coast, selling diving equipment to small businesses that contract to take tourists on diving excursions.
The fiscal year runs from Aug-Jul. The work for the final month of the fiscal year must be completed and the annual financial statements prepared. The company is anxious to see the results of the first year of operations.
Complete the accounting cycle for July. Necessary info is given on page 264 of your textbook. Note that the temporary …show more content…
The July beginning balances are already on the ledger for you. Print the Ledger and the Trial Balance as of July 1 before you enter any of the July transactions. Turn in hard copies of these two reports.
4. Journalize and post the July transactions on pp. 264-265. Leave the (posting) reference column blank for this exercise. Note that you must enter vendor and customer names where appropriate.
5. Click ‘Check My Work.’ Cengage checks for the balances that should be shown after closing entries are posted, so you will see all of the temporary non-zero balances marked as incorrect. Look over all accounts that are marked as incorrect to determine if you have made any mistakes. For example, the cash balance will not be affected by adjusting or closing entries, so if cash is marked as incorrect, you need to go back to the journal and find your mistakes. Likewise, if any vendor or customer accounts are marked as incorrect, go back to find your mistakes.
6. Print the unadjusted trial balance and change the title by hand from ‘Trial Balance’ to ‘Unadjusted Trial Balance.’ The ledger reports do not keep track of whether a trial balance is unadjusted, adjusted, or post-closing. It will simply print a trial balance whenever …show more content…
Print the Income Statement, Retained Earnings Statement, and the Balance Sheet.
11. Journalize and post the closing entries as indicated on p. 265. You will need the adjusted trial balance to make the closing entries.
12. Print the post-closing trial balance and change the title by hand from ‘Trial Balance’ to ‘Post-closing Trial Balance.’
13. Click ‘Check My Work’ and correct any mistakes.
14. Submit assignment for grading.
15. Turn in hard copies of the beginning ledger, the beginning trial balance, and the financial statements.
16. In addition, turn in the attached page with your financial statement analysis.
Comprehensive Problem 2
ACCT 2301, Fall 2011, Webb
Name: ________________________________ Date: ______________________
1. Looking at the vertical analysis provided on the income statement, do you consider the percentage of sales returns and allowances to be acceptable? P 125.
2. Do you think that gross profit is adequate to cover operating expenses and still provide an acceptable net income? Look at the percentages in the vertical analysis of the income statement in answering this question. P.
ACCT 2301, Fall 2011, Webb
Due Date: Wed, Nov 2 @ 11:45 p.m.
1. You will be doing the accounting for a merchandising business, Ocean Atlantic Co. Ocean Atlantic is completing their first year of operations as a corporation. The business is located on the Atlantic Coast, selling diving equipment to small businesses that contract to take tourists on diving excursions.
The fiscal year runs from Aug-Jul. The work for the final month of the fiscal year must be completed and the annual financial statements prepared. The company is anxious to see the results of the first year of operations.
Complete the accounting cycle for July. Necessary info is given on page 264 of your textbook. Note that the temporary …show more content…
The July beginning balances are already on the ledger for you. Print the Ledger and the Trial Balance as of July 1 before you enter any of the July transactions. Turn in hard copies of these two reports.
4. Journalize and post the July transactions on pp. 264-265. Leave the (posting) reference column blank for this exercise. Note that you must enter vendor and customer names where appropriate.
5. Click ‘Check My Work.’ Cengage checks for the balances that should be shown after closing entries are posted, so you will see all of the temporary non-zero balances marked as incorrect. Look over all accounts that are marked as incorrect to determine if you have made any mistakes. For example, the cash balance will not be affected by adjusting or closing entries, so if cash is marked as incorrect, you need to go back to the journal and find your mistakes. Likewise, if any vendor or customer accounts are marked as incorrect, go back to find your mistakes.
6. Print the unadjusted trial balance and change the title by hand from ‘Trial Balance’ to ‘Unadjusted Trial Balance.’ The ledger reports do not keep track of whether a trial balance is unadjusted, adjusted, or post-closing. It will simply print a trial balance whenever …show more content…
Print the Income Statement, Retained Earnings Statement, and the Balance Sheet.
11. Journalize and post the closing entries as indicated on p. 265. You will need the adjusted trial balance to make the closing entries.
12. Print the post-closing trial balance and change the title by hand from ‘Trial Balance’ to ‘Post-closing Trial Balance.’
13. Click ‘Check My Work’ and correct any mistakes.
14. Submit assignment for grading.
15. Turn in hard copies of the beginning ledger, the beginning trial balance, and the financial statements.
16. In addition, turn in the attached page with your financial statement analysis.
Comprehensive Problem 2
ACCT 2301, Fall 2011, Webb
Name: ________________________________ Date: ______________________
1. Looking at the vertical analysis provided on the income statement, do you consider the percentage of sales returns and allowances to be acceptable? P 125.
2. Do you think that gross profit is adequate to cover operating expenses and still provide an acceptable net income? Look at the percentages in the vertical analysis of the income statement in answering this question. P.