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Part 2 Complete the cycle and Prepare Financials statements

Zeta-Z VideoGame Supplies has identified the following accountsas needed to be adjusted. Complete the necessary adjusting entries:

1. Salaries earned but not paid for the period $5,500.
2. Record accrueddividend income on investments of $1,500.
3. Depreciation expense for the period. The equipment has a useful life of 15years & the salvage value is estimated to be zero. (Hint you have a partial year)
4. Determine the amount of Insurance that has expired.
5. Supplies on hand - $1,700.
6. Found the parts neededto repair the game systemsbrought in on August 9^th. As of December 31^st, half were complete and given to the customer Zeta is working on finishing the rest of the systems.
7. Record the amount of expired rent.
8. Record accruedInterest expense of on Note Payable for the equipmentpurchased on May 1^st.
9. Once all the adjustments are complete the company will need to calculate net income. Then you will calculate tax expense and recorded it (the offset is a tax payable).The company has an income tax rate of 25%.

Part 2 Instruction

Instruction: You will prepare the following in excel -

1. General Journal
   1. Prepare adjusted journalentries
2. Ledger T accounts
   1. Show beg. Unadjusted balance from part 1
   2. Post adjusting activity - with Journal entry reference

add on to unadjusted balance(this is your beginning)

1. Show adjusted endingbalance in ledgeraccount
2. Trial Balance
   1. Prepare and AdjustedTrial Balance
3. Financial Statements
   1. (Multi-step) Incomestatement (do not forget the EPS disclosure)
   2. Statement of RetainedEarnings
   3. (Classified) Balance Sheet (remember all disclosures)
   4. Cash Flow - prepare a direct method (remember that GAAP requiresa reconciliation when the direct method is used)
4. General Journal

e. Prepare closingjournal entries

1. Ledger T accounts
   1. Show Beg adjustedbalance from #2
   2. Post the closing activitywith Journal entry reference
   3. Show endingclosing balances
2. Trial Balance
   1. Prepare a Post-Closing trial balance

Remember to use proper formatting for everything you do! Financial statements should be GAAP format and look professional (and printer ready). Assume you are making this for a client.

Helpful Hints:

• You will have a negative retained Earnings - which would be called 'Accumulated Deficit'. Note that the balance will be on the debit side.
• You can relabel the Interest receivable account to Dividend Receivable
• To calculate straight-line depreciation -- Cost divided by the useful life -- 1 yr of dep exp (or 12 months). You have less than 12 months so divide this by 12 and multiply by the number of months the property was owned.

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