Accounting cycle case study, please complete excel spreadsheet

| June 12, 2016


Health & Fitness Center Practice Problem

1. Enter transactions for the second month of business as journal entries in the General Journal of the electronic spreadsheet. Use the format we use in class to write these journal entries. (The debit line comes first, then drop down one line, indent, and record the second account title).

2. Post from the “General Journal” into the “General Ledger” You must use the cell referencing feature of excel. Post the debit or credit in the appropriate account, and make a note in the “notes” column sothat you will be able to track your entries when you make any changes. You must make notes in the notes column!The spreadsheet will automatically compute a balance in the “Unadjusted Balance”cell. Do not enter any negative numbers. There are enough lines for all necessary entries, so if you run out of space, it means that you have not done it correctly. Start the entries on the top line of the account’s section (right under the gray line). You should never get a negative balance. If you do, re-check to see if you posted the entry correctly to either the debit or credit column. I have protected cells in these sheets so that you shouldn’t be able to inadvertently mess up the formulae. However, if you post an entry to the Ledger and later want to remove it…DON’T hit the delete key…simply hit the backspace key to clear the cell. Hitting delete will cause an error in the formulae and then your trial balance will not balance. Your instructor will have to re-set the formulae in order for your group to finish the project.Use theperpetual inventorymethod to update your inventory as discussed inclass. The unadjusted balances will post automatically into the Unadjusted Trial Balance on the “Worksheet” page of the electronic spreadsheet. After you finish with the monthly transactions (pages 3 & 4 of your transaction packet) you need to check the Unadjusted Trial Balance to make sure it balances! (Refer to check figure.)

Note: Beginning balances have already been entered into the general ledger.

3. Enter the adjusting entries in the General Journal in the electronic spreadsheet. (It is titled “General Journal – Adjusting Entries”.) You are provided with a partial listing of adjusting entries on page 5 of the transaction packet. These are only the adjusting entries that require additional information – you will need to go back to the original transactions to determine what other accounts require adjustment and how much the adjustment should be. Inventory shortfalls get debited to “Loss on Shrinkage.” You should have a total of eight adjusting entries when you finish (depreciation counts as only one entry and loss on shrinkage counts as only one entry).

4. Post the adjusting entries into the “General Ledger” using cell referencing. Do not use negative numbers. Put the entry into the appropriate cell on the line below the “Balance before Adjustment”. The adjusting entries will automatically post into the “Adjustments” column of the “Worksheet” page in the electronic spreadsheet. When you are done with your adjustments, make sure that the debits and credits in the “Adjustments” columns are equal. The adjusting entries will be combined automatically with the unadjusted balances to provide the final “Adjusted Trial Balance” on the “Worksheet”. The “Worksheet” page is automated; you will do all of your work on the “General Journal”, “General Ledger” and the “Financial Statements” pages.

5. Enter the closing entries in the “General Journal”, (titled “Closing Entries”). Post these entries into the electronic spreadsheet on the line above the “Ending Balance After Closing”. Your ledger t-accounts will be reviewed to verify that all temporary accounts show a zero balance after closing. The worksheet will be automatically updated after closing entries are posted to reflect an after closing trial balance.

6. On the “Financial Statements” page, you need to set up a multi-step Income Statement, a Statement of Stockholders’ Equity, and a classified Balance Sheet. You must use the cell-referencing features offered by Excel. Do not just type in the amount from the Worksheet page if you want partial credit for any errors as the cell-referencing feature makes the errors easy to trace to the source.


7. Congratulations! You have completed your practice problem for Aggie Health and Fitness Center!


Position your cursor in the cell where you want a given balance to appear, type an equal sign, and then change worksheets, position the cursor on the cell that holds the value you want, and press Enter. This should cause a “relative cell reference” to appear in the original cell. This means, more or less, that you have copied the cell itself, and not the value – if you change the value in the source cell, it will automatically change in the destination cell. This automatic updating is what makes electronic spreadsheets so valuable in the business world for managers, investors, and accountants alike. It also reduces the potential for error and makes working much more efficient and easier.

Example: To post a debit to the Cash t-account, position your cursor in the debit cell of the “Cash” t-account in the “General Ledger” and type an equal sign. Click on the tab labeled “General Journal” at the bottom of the screen to switch back to the journal entry, position the cursor on the debit cell that holds the value you want, and press “Enter”. The value automatically transfers!

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