Chapter 10: Chapter 10: Completing Quarterly Activities Completing Quarterly Activities

and Closing the Fiscal Yearand Closing the Fiscal Year

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Completing Quarterly Activities Completing Quarterly Activities

and Closing the Fiscal Yearand Closing the Fiscal Year Chapters 9 and 10 work together. In Chapter 10,

you will continue recording financial information for Barbara Wood Graphics. You will complete the Computer Accounting Cycle for November and December. Ms. Wood’s checkbook registers and bank statements will be used as source documents.

At the end of December, which is also the end of the fourth quarter, you will complete adjusting entries for Ms. Wood, print financial statements, and close the fiscal year.

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Software Objectives, p. 313Software Objectives, p. 313 Restore data from Chapter 9. (The “Chapter 9

October.ptb” back up was made on page 302. All activities in Chapter 9 must be completed before starting Chapter 10)

Change accounting periods. Journalize and post transactions for Barbara

Wood Graphics, for the months of November and December.

Complete account reconciliation. Print a general ledger trial balance (unadjusted) Complete asset maintenance with Peachtree

Fixed Assets; calculate depreciation; post to the general ledger; and print depreciation reports.

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Software Objectives concluded, p. 313Software Objectives concluded, p. 313 Journalize and post quarterly adjusting entries in the

general journal. Print financial statements. Close the fiscal year. Print a post-closing trial balance. Make six backups: four backups of Barbara Wood

Graphics data; one backup of Exercise 10-1; and one backup of Exercise 10-2. (You may use the same disk to back up Chapter 10 that you used for the Chapter 9 backups.)

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Web Objectives, p. 313Web Objectives, p. 313 Use your Internet browser to go to the book’s

website at www.mhhe.com/business/accounting/yacht2002

Go to the Internet Activity link on the book’s website. Then, select WEB EXERCISES PART 2. Complete the second web exercise in Part 2, “Understanding Accounting Terms.”

Use a word processing program to write summaries of the websites that you visited.

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Peachtree’s Computer Peachtree’s Computer Accounting Cycle, p. 314Accounting Cycle, p. 314

1. Change accounting periods.

2. Journalize entries.

3. Post entries to the general ledger.

4. Account reconciliation.

5. Print the general ledger trial balance (unadjusted).

6. Journalize and post adjusting entries.

7. Print the general ledger trial balance (adjusted).

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Peachtree’s Computer Peachtree’s Computer Accounting Cycle, p. 314Accounting Cycle, p. 314

8. Print depreciation report.

9. Print the financial statements: Balance Sheet, Income Statement, Statement of Retained Earnings, Statement of Cash Flow, Statement of Changes in Financial Position.

10. Close the fiscal year.

11. Interpret accounting information.

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Peachtree TipsPeachtree TipsYou must complete Chapter 9 before starting Chapter 10.

To check that you have completed Chapter 9, display Barbara Wood’s general ledger trial balance. Compare it to the one shown on page 298. This is the trial balance at the end of Chapter 9.

If any of the account balances are incorrect on the general ledger trial balance, follow the steps for “Editing Journal Entries” on page 297. Then, reprint the trial balance.

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Peachtree Tips (continued)Peachtree Tips (continued)

If you do not get the correct year-to-date amounts on your Statement of Cash Flow and Statement of Changes in Financial position (pp. 347 and 348), you may have set your chart of accounts beginning balances up incorrectly. Refer to pages 267-271, Entering Chart of Accounts Beginning Balances. Barbara Wood’s beginning balance sheet is dated October 1, 2002 (p. 267). Since Peachtree posts on the last day of the month (September 30), you must set beginning balances for the preceding month—September 1 through 30, 2002, pp. 268-269.

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Peachtree Tips (concluded)Peachtree Tips (concluded)

Peachtree Complete Accounting 2002 must be started and Barbara Wood Graphics opened before you use Peachtree Fixed Assets. In order for Peachtree Fixed Assets to know what data to work with, the appropriate company must be opened first in Peachtree Complete Accounting 2002.The “Troubleshooting Tips” link on the textbook’s website has more information about Peachtree Fixed Assets.

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Backing Up Chapter 10Backing Up Chapter 10Disk Backup Name KB Pages

15 of 18 A:\Chapter 10 November 119 KB 323-324

A:\Chapter 10 December UTB 122 KB 330

A:\Chapter 10 December 139 KB 349

A:\Chapter 10 EOY 139 KB 357

A:\Exercise 10-1 98 KB 365

A:\Exercise 10-2 112 KB 367

TOTAL KB 729 KB

.

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Chapter 10 TopicsChapter 10 Topics

1. Software & web objectives, p. 313

2. Getting started, pp. 314-317

a. Restoring data from Chapter 9, pp. 314-315

b. Changing accounting periods: November 1-30, 2002, pp. 315-316

3. Checkbook register and bank statement: November 2002, p. 317

a. Journalize and post November transactions, p. 317

b. Account reconciliation, pp. 318-319

c. Printout of cash receipts journal and cash disbursements journal, p. 320

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Chapter 10 Topics, continuedChapter 10 Topics, continuedd. General ledger trial balance, p. 321e. Balance sheet, p. 322f. Income statement, p. 323

4. Backing up November data, pp. 323-3245. Changing accounting periods, p. 324 6. Checkbook register and bank statement: December

2002, p. 325a. Journalize and post December transactions in the cash receipts and cash disbursements journals, p. 325.b. Account reconciliation report, pp. 326-327

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Chapter 10 Topics, continuedChapter 10 Topics, continuedc. Cash receipts journal, p. 328d. Cash disbursements journal, p. 328e. General ledger trial balance, p. 329

7. Backing up the unadjusted trial balance, p. 3308. Peachtree’s Fixed Assets, p. 331

a. Fixed asset maintenance, pp. 332-335b. Calculate depreciation, pp. 335-336c. Posting to Peachtree Complete’s general ledger, pp. 336-337d. Depreciation expense report, pp. 337-338

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Chapter 10 Topics, continuedChapter 10 Topics, continued9. End-of-quarter adjusting entries, p. 338

a. Journalize and post adjusting entries in the general journal, pp. 339-341.b. General ledger trial balance (adjusted), p. 343c. Financial statements, pp. 344-348

1) Balance sheet, p. 3442) Income statement, p. 3453) Statement of retained earnings, p. 3464) Statement of cash flow, p. 3475) Statement of changes in financial

position, p. 348

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Chapter 10 Topics, concludedChapter 10 Topics, concluded10. Backing up December data, p. 34911. Closing the fiscal year, pp. 350-35512. Printing the post-closing trial balance, pp. 355-35613. Backing up year-end data, p. 35714. Internet Activity, p. 35715. Summary and Review, p. 358

a. Going to the Net, p. 359b. True/Make True questions, pp. 359-362c. Exercise 10-1, pp. 362-365d. Exercise 10-2, pp. 365-367e. Chapter 10 index, p. 368

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Change accounting periods, pp. 315-316Change accounting periods, pp. 315-316 Click on Tasks, then System. From the “System” pull-down

menu. Select Change Accounting Period. Select “11-Nov 01, 2002 to Nov 30, 2002.”

Click on <Ok>. Click on <No> at the screen prompt.

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Pages 317 through 321Pages 317 through 321

Continue with the steps shown on pages 317, 318, and 319.

Compare your account reconciliation report to the one shown on p. 319.

Compare your cash receipts journal to the one shown on p. 320.

Compare your cash disbursements journal to the one shown on p. 320.

Print the general ledger trial balance, then compare it to the one shown on p. 321.

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Pages 322 - 324Pages 322 - 324Print the balance sheet, then compare it

to the one shown on p. 322.Print the income statement, then

compare it to the one shown on p. 323.Follow the steps to back up November

data shown on pages 323 and 324Follow the steps to change accounting

periods shown on p. 324.

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Pages 325 - 329Pages 325 - 329 Continue with the steps shown on pages 325,

326, and 327. Compare your account reconciliation report to

the one shown on p. 327. Compare your cash receipts journal to the

one shown on p. 328. Compare your cash disbursements journal to

the one shown on p. 328. Print the general ledger trial balance, then

compare it to the one shown on p. 329.

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Peachtree’s Fixed Assets, p. 331Peachtree’s Fixed Assets, p. 331 Minimize Peachtree Complete Accounting. Double-click on the “Peachtree Fixed Assets” icon. The “Open” window appears.

Make sure “Barbara Wood Graphics” is highlighted. Click on <Ok>.

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Peachtree’s Fixed Assets continued, p. 332Peachtree’s Fixed Assets continued, p. 332

Type 9/30/02 in the “Conversion Date” box. Press the <Tab> key, then click on <Ok>. The “Peachtree Fixed Assets: Barbara Wood Graphics” menu bar appears.

Complete the steps on page 332. The “Asset Maintenance - Financial Book” screen is shown on the next slide.

.

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Asset Maintenance – Financial Book, p. 333Asset Maintenance – Financial Book, p. 333 Asset Maintenance – Financial Book window.

Complete steps 4, 5, 6, and 7 on pages 334 and 335.

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Calculate depreciation, p. 335Calculate depreciation, p. 335 From the menu bar, click on Tasks, then Calculate Depreciation.

Complete steps 2, 3, and 4 on pages 335 and 336.

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Posting to Peachtree Complete’s Posting to Peachtree Complete’s General Ledger, p. 336General Ledger, p. 336

Follow steps 1, 2, and 3 on page 336.Compare your General Journal Entries

to the one shown on page 336.Complete steps 4 and 5 on page 337.

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Depreciation Expense Report, p. 338Depreciation Expense Report, p. 338 From the menu bar, click on Reports, Deprecation, then select Expense.

Click on the “Print” icon, then make the selections to print. Compare your Depreciation Expense report to the one shown on p. 338

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End-of-Quarter Adjusting Entries, End-of-Quarter Adjusting Entries, p. 338 - 343p. 338 - 343

Ms. Wood’s accounting records are adjusted at the end of December. Follow the steps on pages 338 – 341 to record adjusting entries.

Compare your general journal to the one shown on p. 342.

Compare your adjusted trial balance to the one shown on p. 343.

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Financial Statements, pp. 344-348Financial Statements, pp. 344-348

Compare your balance sheet to the one shown on p. 344.

Compare your income statement to the one shown on p. 345.

Compare your statement of retained earnings to the one shown on p. 346.

Compare your statement of cash flow to the one shown on p. 347.

Compare your statement of changes in financial position to the one shown on p. 348.

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Backing up December data, p. 349Backing up December data, p. 349

Follow the steps on p. 349 to back up December data.

Use “Chapter 10 December” as the back up name.

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Closing the Fiscal Year, p. 350Closing the Fiscal Year, p. 350 From the menu bar, select Tasks, System, Year-End Wizard.

Click on <Next>.

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Closing the fiscal year, continued, p. 351Closing the fiscal year, continued, p. 351 Accept the default for “Fiscal and Payroll Tax

Years.”

Click on <Next>.

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Closing the fiscal year, continued, p. 351Closing the fiscal year, continued, p. 351

Read the information on the “Unprinted Items” screen.

Click on <Next>.

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Closing the fiscal year, continued, p. 352Closing the fiscal year, continued, p. 352

Read the information on the “Print Fiscal Year-End Reports” screen.

Click on the <Next>. The general ledger prints.

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10-34Closing the fiscal year, continued, pp. Closing the fiscal year, continued, pp.

352-353352-353 Read the information in step 7 on page 352. Click on the <Next>. Complete steps 9-14 on page 353.

Accept the default for “Next Fiscal Year” by clicking on <Next>.

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Closing the fiscal year, continued, p. 354Closing the fiscal year, continued, p. 354

Read the information on the “Important – Confirm Year-End Close” screen.

Click on <Next>.

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Closing the fiscal year, continued, p. 354Closing the fiscal year, continued, p. 354

Read the information on the “Begin Close-Year Process” screen.

Click on <Begin Close>.

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Closing the fiscal year, continued p. 354Closing the fiscal year, continued p. 354

Read the information on the “Congratulations!” screen.

Click on <Finish>.

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Printing the Post-Closing Printing the Post-Closing Trial Balance, pp. 355-356Trial Balance, pp. 355-356

After the fiscal year is closed, a post-closing trial balance is printed. Only permanent accounts appear on the post-closing trial balance. All temporary accounts (revenues and expenses) have been closed. This completes the computer accounting cycle.

Follow steps 1 and 2 on page 355 to print the post-closing trial balance.

Compare your post-closing trial balance to the one shown on page 356.

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Backing Up Year-End Data, Backing Up Year-End Data, page 357page 357

Follow steps 1 through 9 on page 357 to back up year-end data.

The back up name is “Chapter 10 EOY.”

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Glossary of TermsGlossary of TermsChapter 10Chapter 10

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Unearned revenue, p. 341Unearned revenue, p. 341

Unearned revenue is a liability account used to report advance collections from customers or clients.

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Internet Activity, p. 357Internet Activity, p. 3571 Go to the book’s website at

www.mhhe.com/business/accounting/yacht2002

2 In the “Student Center” list, link to Internet Activities.

3 Link to WEB EXERCISES PART 2.

4 Scroll down the screen to “UNDERSTANDING ACCOUNTING TERMS.” Read steps 1-5.

5 Follow the steps shown on the book’s website to complete this Internet activity.

6 Use a word processing program to write a summary for each website visited (maximum length of each summary: 75 words; minimum length, 50 words.

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Going to the Net, p. 359Going to the Net, p. 359

Access the depreciation calculator at www.fixedassetinfo.com/calculator.htm

This takes you to the Fixed AssetsInfo.com depreciation calculator.

Complete steps 1 - 5 on page 359.