Chapter 4, Problem 4.2AP

a)

To determine

Worksheet:

A worksheet is a tool that is used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger. Usually organizations use Microsoft Excel in order to use a worksheet electronically.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

Financial Statements:

Financial statements are the financial reports that a company prepares in order to disseminate the information about its financial position and performance for a particular period of time. The three financial statements of a company include the balance sheet, income statement and the cash flow statement.

Journalizing:

Journalizing is done in the double – entry book – keeping system of accounting. It is the process by which the transactions that happen in an organization are recorded in the books of accounting. It helps further in the preparation of the financial statements of a company.

Income Statements:

Income statement is also known as the profit and loss statement or revenue statement or also referred to as the operating statement. It is one of the financial statements of the company and represents the financial performance of the company for a particular time period.

Retained Earnings Statement:

Retained earnings are the profits of the company that are not distributed among the shareholders of the company. These retained earnings are included in the retained earnings statement which are used for the development of the business in the future whenever required.

Classified Balance Sheet:

In order to improve the ease of understanding, a classified balance sheet is used. In a classified balance sheet, various standard classifications and sections are used to classify all the similar assets and similar liabilities together. The items having similar economic characteristics are put in the same group so that the users of the statement can easily understand the items.

To complete: The worksheet.

(b)

To determine

To prepare: An income statement, retained earnings statement and the classified balance sheet of company A.

(c)

To determine

To prepare: The closing entries.

(d)

To determine

To post: The closing entries.

(e)

To determine

To prepare: A post – Closing Trial Balance.