Principals of Financial Accounting: Comprehensive Problem

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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 account balances have not been closed out during the fiscal year, so the Income Statement and the Retained Earnings Statement will cover the entire fiscal year.

2. The accounting work will be done through Cengage to give you a feel for how real world accounting software processes accounting information.


3. 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...
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