principles of accounting group assignment

Determine unadjusted trial balance, adjustment, adjusted trial balance : Closing balances of all the accounts in the GL at the end of an accounting period are reflected in a trial balanc

Principles of Accounting Group AssignmentInstructor:

Class: IB1808Group: 1

Semester: Summer 2023Word Count:

Student’s Name and ID:

1 Phạm Lê Hạnh Nguyên - SS1810092 Phạm Thị Quỳnh Hương - SS1811493 Phạm Kiều Đức Trí - SS1809884 Trương Nhật Linh - SS1810835 Nguyễn Hoàng Minh Thư - SS181051

Ho Chi Minh City

Principles of AccountingGroup member’s Contribution form

A. Business Introduction

34

G Closing Process……… 37

A Business Introduction:

This report intends to provide an overview of Huong Company and conduct an analysis of several aspects of the financial statements of the company This shall include various items from the cash flow statements, balance sheets and the profit andloss account The report intends to address the significant areas of performance by the company by conducting ratio analysis and itemized study of important items and thereby focusing on the areas to be improved by the company

B Summary of the accounting cycle:

Identify and analyze transactions :The first step in the accounting cycle is to identify and analyze all transactions made during the accounting period, including expenses, debt payments, sales revenue and cash received from customers During this initial stage, companies go through every transaction that affects their financial, though this should be an ongoing step for companies that are continuously creating customer invoices, buying inventory, paying bills, making payroll and collecting cash Record transactions in a journal:The next step is to record the details of all financial transactions, in chronological order, as journal entries, whether in an actual book or inan accounting program

Post transactions to general ledger: Once journal entries are recorded and approved, they are posted to the general ledger The GL is the master record and summary of all financial transactions, broken down by account.

Determine unadjusted trial balance, adjustment, adjusted trial balance : Closing balances of all the accounts in the GL at the end of an accounting period are reflected in a trial balance.

Financial Statements: Upon the posting of adjusting entries, a company prepares an adjusted trial balance followed by the actual, formal financial statements.

Closing : An entity finalizes temporary accounts, revenues, and expenses, at the end of the period using closing entries These closing entries include transferring net income to retained earnings.

C Description of business transaction of the first year operation:

In 2022, Hương Company completed the following transactions.January

1 Hương invests $70,000 cash in the company.3 The company purchased merchandise for $10,500 8 The company purchased $2,100 for office supplies

10 The company sold merchandise for cash $6,000 to Larn Co The cost of merchandise sold was $4,100.

13 The company purchased merchandise on account from Rin Co for $9,000, terms 2/10, n/30.

20 The company paid salaries and wages of $1,800.

23 The company paid full cash for Rin Co for the transaction on January 13.28 The company paid $230 cash for this month's utilities.

20 Hương withdrew $1,000 for personal use.

23 Paid $70 cash for shipping charges related to the February 12 sale to Aroma Co.27 Receive from Aroma for the sale on February 12.

28 Sold merchandise on account to Lana Corp for $4,000, terms 2/10, n/30, FOB destination The merchandise cost $1,800.

10 Lana paid for the sale on February 28.

23 The company sold merchandise to Monica Co and received $1,500 in cash The merchandise cost $800.

25 The company paid $285 for telephone expenses.29 The company paid $565 for cleaning services.April

2 Purchase merchandise on credit from Ace Company, terms 2/10, n/30, FOB shipping point ($3,400)

3 Paid Ace Co for shipping charges on merchandise purchased on April 2, $100.6 Sold merchandise to Liva Company on account for $4,500, terms 3/10, n/60, FOB shipping point The merchandise cost $2,300.

10 The company paid $400 cash for advertising on social media for this month.12 Paid for the purchase from Ace Co on April 2.

14 The company paid $100 on credit for utilities this month.16 Receive payment from Liva Co for the sale on April 6.

27 The company sold merchandise for Tepy Company on account for $3,700, terms 2/10, n/30 The merchandise cost $2,000.

6 Received full from Liva Co for the sale on June 6.8 Purchased $2,000 on credit for office supplies.

15 Received full from Wupi Co for the sale made on July 5

16 Purchased merchandise on account for $3,000 from Spoty Company, terms 2/10, n/30, FOB destination.

20 Purchased $400 on credit for extra office supplies.

26 Paid full in cash to Spoty Company for the transaction on July 16.29 Paid $2,400 in cash for office supplies on July 8 and July 20.

9 Paid $400 in cash for repairs to the Company’s computers.15 Purchased merchandise for $3,000 cash.

23 Paid $500 for telephone bills.

30 Sold merchandise to Wupi Co and immediately received $2,000 in cash The merchandise cost $890.

5 Paid $1,000 in cash for office equipment.

9 Sold merchandise on account for $3,000 to Acy Company, term 2/10 n/30 The merchandise cost $1,250.

14 Purchased merchandise on account for $2,040 from Spoty Company, terms 2/10, n/30, FOB destination.

19 Receive payment from Acy Company for the sale on September 9.20 Paid $150 for cleaning service.

24 Paid $2,000 cash for the transaction on September 14.October

2 Sold merchandise on account for $3,500 to Liva Company, terms 2/30, n/90, FOB shipping point The merchandise cost $1,060.

3 Paid $1000 for the office rent fees.

15 Purchased merchandise on account for $4,000 from JJ Company, terms 2/30, n/90,FOB shipping point.

16 Paid JJ Co shipping fees charges on merchandise purchased on October 15 ($90).26 Paid $50 in cash for advertising on social media for this month.

1 Receive payment from Liva Co for the sale on October 2.

4 Sold merchandise to Coco Company and immediately received $2,000 cash The merchandise cost $900.

12 Paid $300 on account for office equipment.16 Paid JJ Company for the transaction on October 15.

23 Sold merchandise on account for $6,700 to Monica Company, terms 2/10, n/30, FOB shipping point The merchandise cost $5,600.

25 Paid $300 cash for the transaction on November 12.28 Paid $200 for this month’s utilities.

1 Purchased merchandise on account for $3,600 from Ace Company, terms 2/10, n/30, FOB shipping point

2 Paid Ace Co shipping fee charges on merchandise purchased on December 2 ( $100)

3 Receive payment cash from Monica Co for the sale on November 23.

15 Paid $4,000 cash for the office rent fees.

23 Paid $500 for the repairs to the company’s equipment.

25 Sold merchandise to Wupi Co and immediately received $5,500 cash The merchandise cost $3,020.

27 Paid $2,800 for electric bills this year.28 Paid $6,460 for salaries and wages.31 Paid $500 for the company’s party year-end

c Journalize and post adjusting entries.d Prepare an adjusted trial balance.

e Prepare a multiple-step income statement, statement of retained earnings, andthe classified balance sheet on Dec 31.

f Close temporary accounts Transfer the balances to the retained earningsaccount Prepare a post-closing trial balance.

D General Journal and Ledger:General Journal:

Merchandise Inventory - Rin Co 9,000

( Purchase of merchandise on account )

(Purchase of merchandise on account)

(Received cash from Liva Co.)

April 27 Account Receivable - Tepy Company 3,700

(Sale of merchandise on account)

Account receivable - Liva Co 6000

(Payment to Spoty Co for the purchase on July 16)

(Purchased for merchandise)

(Received cash from Acy Co.)September

(Payment on account for office equipment)

Account Receivable - Monica 6,700

(Purchase of merchandise from Ace Co.)

500500

COST OF GOODS SOLD

COST OF GOODS SOLD

CLEANING SERVICES EXPENSE

20/6 2100 3350

SALARIES AND WAGE EXPENSE

Repair Expense 4,250 Office supplies expense 1,500

Gross profit from sales $35,561.00

Operating expenses:Selling expenses

Others revenues and

STATEMENT OF OWNER'S EQUITY

HUONGStatement of owners equityFor Year Ended December 31, 2022

Plus : Investment from owner $70,000.00

HUONGClassified Balance Sheet

December 31, 2022

Current Assets :

Accounts Receivable 5000

Non - Current Assets :

G Closing Process:

Journal entries to close temporary accounts

1 Closing revenue account to Income Summary

Current Ratio = 66,231/4,600 = 14.41Gross Profit Margin = 35,561/72,631 = 48.96%

ROE ( Return on Equity) = -1,569/67,431 = -2.33% (Note: A negative ROE indicates a loss for the year)

Quick Ratio = 66,231−7,332) / $4,600 = 12.8Debt-to-Equity Ratio = 4,600/67,431 = 0.07

Profit Margin = -1,569/72,631 = -2.16% (Note: A negative profit margin indicates a loss for the year)