J & L Accounting Inc. Answer # 1 , 3 , 4 , 7 , 11, 12

Assignment is to create the following statements for J & L Accounting Inc.:PROJECT GOALThe goal of this graded project is to create the followingfinancial statements for J & L Accounting, Inc.:? Balance sheet? Income statement? Statement of retained earnings? Post-closing trial balanceThe financial statements must be created in one MicrosoftWord document (.doc or .docx file). Alternatively, an Excelworkbook may be used (.xls or .xlsx file). The Word or Excelfile will be uploaded for grading.INSTRUCTIONSRead the following instructions thoroughly before beginningyour work. This will help you to become familiar with whatis involved in the project. Some students start on the projectright away, thinking they’ll save time. Those students tend toget stuck and spend more time working through the projectthan is necessary. The material you need to know in orderto complete the project has been covered in the textbook andthe assigned exercises and problems. If you understand thechapters and completed the assigned homework problems,you should have no problem with the project.The project is to be done by hand with a pencil and paper.Use the blank forms provided. At the end of the project, you’llbe given instructions for creating and uploading the financialstatements in a Word or Excel file for grading.Financial AccountingNote: The formatting of financial statements is important.They follow Generally Accepted Accounting Principles (GAAP),which creates a uniformity of financial statements for analyzing.This allows for an easier comparison, as all businessesfollow GAAP. Therefore, the financial statements should becreated exactly the same way shown or referenced in the textbook.Failure to do so will result in a loss of points.The project references “debits equaling credits.” This is afundamental principle of accounting that mustn’t be violated.Doing so is not acceptable under any circumstance. Debits notequaling credits allows for “cooking of the books,” which ispresenting false information. It also allows for embezzlement,which is theft by management or employees. If debits don’tequal credits, the cause may be a lack of understanding ofaccounting principles, such as those presented in the textbookand assigned homework problems, or a lack of focusand concentration when making journal entries, posting toledger accounts, or completing math. Remember—instructorsare available to help you with material you may be strugglingwith. Mistakes of the lack-of-focus variety are best correctedby going back over the work until the error is found.The accounting equation must balance on the balance sheet.This is another fundamental principle of accounting thatcan’t be violated and if so is completely unacceptable. Whenthe equation doesn’t balance and the numbers are “fudged,”this is easily detectable by someone who knows accounting. Ifyour debits equal your credits and you understand whichgeneral ledger accounts belong on which financial statements,then the accounting equation should balance. It’sreally all about understanding the concepts and applyingthat understanding.The following financial statements are provided from the prioraccounting period for J & L Accounting, Inc.:a) Post-closing trial balanceb) Balance sheetc) Income statementd) Statement of retained earningsLesson 2 29J & L Accounting, Inc.Post-Closing Trial BalanceDecember 31, 2014BALANCEACCOUNT TITLE DEBIT CREDITCash, Business Checking 20,500.00Accounts ReceivablePrepaid RentVehicles 48,000.00Accumulated Depreciation, Vehicles 12,000.00Equipment 3,600.00Accumulated Depreciation, Equipment 600.00Accounts PayableCommon Stock 38,000.00Retained Earnings 21,500.00DividendsService RevenueAdvertising ExpenseRent ExpenseOffice Supplies ExpenseTelephone ExpenseUtilities ExpenseDepreciation ExpenseTOTALS 72,100.00 72,100.0030 Financial AccountingJ & L Accounting, Inc.Balance SheetAs of December 31, 2014ASSETSCash, Business Checking 20,500.00Accounts Receivable 0.00Prepaid Rent 0.00Vehicles 48,000.00Less: Accumulated Depreciation, Vehicles 12,000.00 36,000.00Equipment 3,600.00Less: Accumulated Depreciation, Equipment 600.00 3,000.00TOTAL ASSETS 59,500.00LIABILITIESAccounts Payable 0.00TOTAL LIABILITIES 0.00STOCKHOLDERS’ EQUITYCommon Stock 38,000.00Retained Earnings 21,500.00TOTAL STOCKHOLDERS’ EQUITY 59,500.00TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 59,500.00J & L Accounting, Inc.Income StatementFor the Month Ending December 31, 2014REVENUESService Revenue 10,275.00EXPENSESAdvertising Expense 2,300.00Rent Expense 1,000.00Office Supplies Expense 300.00Telephone Expense 750.00Utilities Expense 3,200.00Depreciation Expense 1,100.00TOTAL EXPENSES 8,650.00NET INCOME 1,625.001