Apply the accounting cycle to business transactions for communicating financial data
Interpret financial statements for informing business decisions
Analyze the steps of the accounting cycle for their impact on the success of a business
Your dog , Peyton , has severe allergies and cannot have the usual store-bought dog treats . You have been making homemade treats for him that are all-natural and hypo-allergenic . Over the past year , you have been making and selling these treats out of your home and have been quite successful . You now have an opportunity to open your own dog treat bakery . You have decided on a corporate form of business and have named your company “ Peyton Approved .”
This final task will require you to follow the business transactions for a six-month period from that initial stage of analysis and recording , through the reporting process . You will use this information to compose a memorandum to the bank detailing the results of operations as communicated in the financial statements you have produced based on the business transactions for the period
For this part of the final project , your completed workbook will consist of journal entries for each transaction and posting of transactions to account ledgers . You will develop a trial balance from ledger balances and adjust revenue and expense accounts as necessary to ensure that revenues and expenses are reported in the appropriate period under the accrual accounting method . The adjusted trial balance will be used in preparation of the income statement , statement of owner ’ s equity , balance sheet , and statement of cash flows . After preparation of financial statements , closing entries will be entered to transfer earnings to equity and prepare temporary accounts for the new accounting period
These workbooks will prepare you for the final part of the project , which continues with ratio analysis and a memo , which contains an overview of the company ’ s accounting system , a discussion of the results of operations , an analysis of what those results mean , and a