Lesson Plan 7.10 - End-of-Fiscal Period Activities
Course Title – Accounting I
Session Title – Capital Accounts and Dividend Distribution for a Corporation
Lesson Purpose – Demonstrate skill using accounting procedures in end-offiscal period activities.
Behavioral Objectives






Analyze and journalize adjusting entries for a corporation.
Complete a Trial Balance for a corporation.
Prepare financial statements for a corporation.
Calculate net income or loss for a corporation.
Analyze and journalize closing entries for a corporation.
Analyze and journalize reversing entries for a corporation.
Preparation
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
120.42.C
7.a. follow oral and written
instructions;
7.b. develop time management skills
by setting priorities for completing
work as scheduled.
This lesson, as published, correlates
to the following TEKS. Any
changes/alterations to the activities
may result in the elimination of any or
all of the TEKS listed.
130.166.C
11.f. – prepare a balance sheet for a
corporation
11.h. – prepare an income statement
for a corporation
11.i. – prepare a statement of equity
and retained earnings for a
corporation
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the
mathematical processes and tools used in problem solving.
Materials, Equipment and Resources:




Textbook
Accounting Software
Journal Input Forms
Spreadsheet Software
Teaching Strategies:
Lesson Plan 7.10 – End-of-Fiscal Period Activities
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1



Observation
Verbal Drills
Demonstration
Lesson Content:
Students learn to complete the end-of-the fiscal period work for a corporation.
You demonstrate adjusting entries, preparing a Trial Balance, preparing financial
statements, calculating net income or loss and amount of tax liability, journalizing
closing entries and journalizing reversing entries.
Assessment:


Observation
Graded Assignment
Additional Resources:
Textbooks:
Guerrieri, Donald J., Haber, Hoyt, Turner. Glencoe Accounting RealWorld Applications and Connections. Glencoe McGraw-Hill, 2000.
ISBN/ISSN 0-02-815004-X.
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 Accounting
Multicolumn Journal Anniversary Edition, 1st Year Course. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43524-0
Ross, Kenton, Gilbertson, Lehman, and Hanson. Century 21 General
Journal Accounting Anniversary Edition, 7th Edition. SouthWestern Educational and Professional Publishing, 2003.
ISBN/ISSN: 0-538-43529-1.
Websites:
CCH Business Owner’s Toolkit. CCH Incorporated, 2009
http://www.toolkit.cch.com/text/P06_1580.asp.
Lesson Plan 7.10 – End-of-Fiscal Period Activities
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity 7.10.1 – Analyzing and Journalizing Adjusting
Entries
Course Title – Accounting I
Session Title –End-of-Fiscal Period Activities
Activity Purpose - Demonstrate skill in analyzing and journalizing adjusting entries
for a fiscal period.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
7.c. make decisions using appropriate
accounting concepts;
7.e. perform accounting procedures
using manual and automated methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
3.h. – prepare a trial balance
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:




Textbook
Internet
Accounting Software
Spreadsheet Software
Teaching Strategies:


Observation
Demonstration
7.10.1 – Analyzing and Journalizing Adjusting Entries
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Have your students enter this chart of accounts and balances for Best
Computer Services, Inc. Be sure debits equal credits and print a Trial
Balance.
1110
1115
1115
1120
1125
1130
1135
1140
1145
1205
1210
1215
1220
2105
2110
2115
2120
2125
2130
2135
2140
2145
2150
2155
3105
3110
3115
3120
4105
4110
4115
5105
5110
5115
6105
6110
6120
6125
6130
6135
Best Computer Services, Inc.
Chart of Accounts
Assets
Current Assets
Cash
Petty Cash
Notes Receivable
Interest Receivable
Accounts Receivable
Allow. for Uncol. Accts
Merchandise Inventory
Supplies
Prepaid Insurance
Plant Assets
Office Equipment
Accum. Depr. – Ofc. Equip
Store Equipment
Accum. Depr. – Store Equip.
Current Liabilities
Notes Payable
Interest Payable
Accounts Payable
Emp. Income Tax Payable
Federal Income Tax Payable
FICA Tax Payable
Sales Tax Payable
Unemp. Tax Pay.—Federal
Unemp. Tax Pay.—State
Health Ins. Prem. Payable
Dividends Payable
Stockholder’s Equity
Capital Stock
Retained Earnings
Dividends
Income Summary
Operating Revenue
Sales
Sales Discount
Sales Returns and Allowances
Cost of Merchandise
Purchases
Purchases Discount
Purchases Returns and Allow.
Operating Expenses
Advertising Expense
Credit Card Fee Expense
Depr. Exp.—Office Equip.
Depr. Exp.—Store Equipment
Insurance Expense
Miscellaneous Expense
7.10.1 – Analyzing and Journalizing Adjusting Entries
19,844.00
200.00
5,000.00
100.00
2,192.00
492.00
44,900.00
625.00
1,000.00
10,900.00
900.00
19,000.00
1,400.00
5,600.00
250.00
975.00
777.00
4,000.00
929.00
737.00
999.00
1,925.00
545.00
10,000.00
14,000.00
98,000.00
10,000.00
27,360.00
1,736.00
176.00
53,000.00
5,300.00
275.00
500.00
80.00
250.00
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
6135
6140
6145
6150
6155
6160
7105
7110
8105
8110
8115
9105
Payroll Taxes Expense
Rent Expense
Salary Expense
Supplies Expense
Uncol. Accounts Expense
Utilities Expense
Other Revenue
Gain on Plant Assets
Interest Income
Other Expenses
Cash Short and Over
Interest Expense
Loss on Plant Assets
Income Tax Expense
Federal Income Tax Expense
1,050.00
3,000.00
2,000.00
357.00
0
525.00
0
129.00
0
9,000.00
2. Have your students plan the adjustments on an input sheet. Use this
information:






Notes Receivable No. 17 was received on July 1, 2003. This note is an
18 month note at 18% interest rate. Calculate the accrued interest
income and adjust accordingly.
The business estimates uncollectible accounts expense at 1% of Net
Sales. Calculate the uncollectible accounts expense and adjust
accordingly.
The ending merchandise inventory was $46,000.00
The ending supplies inventory was $825.00
The value of prepaid insurance at the end of the month was $800.00
Office Equipment to depreciate:
Equipment
Purchased
Salvage
Value
Original Cost
Useful
Life
Depreciation
2003
Color Laser
1-01-02
$5,000.00
$500.00
4 years
Printer
Computer
7-01-04
$4,200.00
$400.00
4 years
Total Depreciation Adjustment for Office Equipment

Store Equipment to depreciate:
Equipment
Purchased
Floor Waxer
12-01-03
Original
Cost
$8,400.00
Salvage
Value
$1,000
Useful Life
Depreciation
2003
10 years
 Notes Payable No. 12 was issued on December 1, 2003. This note is an
18 month note at 18% interest rate. Calculate the accrued interest
expense and adjust accordingly.
 Federal income tax expense for the year is $11,918.00.
3. Check adjustments total for students. Have your students enter the
adjustments in the computer and print a new Trial Balance.
7.10.1 – Analyzing and Journalizing Adjusting Entries
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Assessment:


Observation
Graded Assignment
Quality Feature
Entry of accounts and balances accurate with debits equaling
credits.
No errors in account names.
Adjustment amounts accurate.
Adjustments entered in the computer accurately.
Trial balances printed.
Completes in a timely manner.
7.10.1 – Analyzing and Journalizing Adjusting Entries
Score
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity 7.10.2 – Prepare Financial Statements for a
Corporation
Course Title – Accounting I
Session Title –End-of-Fiscal Period Activities
Activity Purpose - Demonstrate skill in preparing financial statements for a
corporation.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
7.c. make decisions using appropriate
accounting concepts;
7.e. perform accounting procedures
using manual and automated methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
11.f. – prepare a balance sheet for a
corporation
11.h. – prepare an income statement for
a corporation
11.i. – prepare a statement of equity and
retained earnings for a corporation
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:



Textbook
Accounting Software
Spreadsheet Software
Teaching Strategies:



Observation
Verbal Drills
Demonstration
Activity 7.10.2 – Prepare Financial Statements for a CorporationUNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Review the formulas for net income and net loss. Have your students use a
Net Income Calculation spreadsheet and the after adjustments Trial Balance
to do a quick calculation of net income or net loss.
2. Using the accounting software, ask your students to print these financial
statements:
 Income Statement
 Statement of Stockholder’s Equity
 Balance Sheet
3. Have your students complete the audit test using their printed financial
statements:
Audit Quiz
Income Statement:
What is the amount of net sales?
What is the total of Operating Expenses?
Which Operating Expense is the highest amount?
What is the amount of Cost of Merchandise Sold?
What is the amount of income from operations?
What is the net income before Federal Income Tax?
What is the amount of net income after Federal Income Tax?
What is the component percentage of net sales?
What is the component percentage of cost of merchandise
sold?
What is the component percentage of total operating
expenses?
Give your overall outlook of the income statement. Was the
business successful this fiscal period? Describe how
successful and
explain why.
List at least two accounts you think should be watched or
changed for the next fiscal period.
Statement of Stockholder’s Equity:
What was the total net increase or decrease to retained
earnings during this fiscal period?
What was the balance of retained earnings at the end of the
fiscal period?
What was the balance of Stockholder’s Equity at the end of the
fiscal period?
Balance Sheet:
What was the book value of Office Equipment at the end of the
fiscal period?
What was the book value of Store Equipment at the end of the
fiscal period?
What was the total of plant assets for this fiscal period?
How much cash did the business have at the end of the fiscal
period?
What was the proving total on the balance sheet?
What is the amount of working capital?
What is the current ratio between total assets and total
liabilities?
Activity 7.10.2 – Prepare Financial Statements for a CorporationUNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Assessment:


Observation
Graded Assignment
Quality Feature
Spreadsheet calculation of net income or loss accurate.
Financial statements printed as instructed.
Accurate balances in financial statements.
Audit test answered accurately.
Completes in a timely manner.
Score
Sstatements printed as instructed.
Accurate balances in financial statements.
Audit test answered accurately.
Completes in a timely manner.
Activity 7.10.2 – Prepare Financial Statements for a CorporationUNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity 7.10.3 – Closing Entries
Course Title – Accounting I
Session Title –End-of-Fiscal Period Activities
Activity Purpose - Demonstrate skill in analyzing closing entries.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
7.c. make decisions using appropriate
accounting concepts;
7.e. perform accounting procedures
using manual and automated methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
3.j. – prepare a post-closing trial balance
TAKS Correlation:
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:



Textbook
Input Forms
Accounting Software
Teaching Strategies:



Observation
Verbal Drills
Demonstration
Activity 7.10.3 – Closing Entries
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity Outline:
1. Review the need for closing entries at the end of the fiscal period.
2. Demonstrate analysis of closing entries.
3. Have students answer these questions on closing entries:
Closing Entry 1.
a. When closing the income statement credit accounts, where do you get the
information?
b. When closing the income statement credit accounts, what accounts does
this include?
c. Are these accounts debited or credited?
d. What account is its “partner” account into which you would close these
accounts?
Closing Entry 2:
a. When closing the income statement debit accounts, where do you get the
information?
b. When closing the income statement debit accounts, what accounts does this
include?
c. Are these accounts debited or credited?
d. What account is its “partner” account into which you would close these
accounts?
Closing Entry 3:
a. In what account is the corporation’s net income or loss recorded?
b. What is the balance of the Income Summary account after closing the net
income or loss?
c. Is a net income a debit or credit to Retained Earnings?
d. Is a net loss a debit or credit to Retained Earnings?
Closing Entry 4:
a. What does the debit balance in the Dividends account represent?
b. What is the balance of the Dividends account after the closing entry?
c. What account is Dividends closed into?
d. Is the entry for Dividends a debit or a credit to close the account?
4. Using the accounting software, ask your students to perform period end closing.
5. Have your students print a Post-Closing Trial Balance.
Assessment:


Observation
Graded Assignment
Quality Feature
Participates in review and demonstration of closing entries
Accurately answers closing entry questions
Effectively performs period end closing using the accounting
software
Prints Post-Closing Trial Balance with accurate amounts
Completes in a timely manner
Activity 7.10.3 – Closing Entries
Score
UNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Activity 7.10.4 – Analyzing and Journalizing Reversing
Entries
Course Title – Accounting I
Session Title –End-of-Fiscal Period Activities
Activity Purpose - Demonstrate skill in analyzing and journalizing reversing
entries.
OLD TEKS Correlations:
2010 TEKS Correlations:
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
120.42.C
7.a. follow oral and written instructions;
7.b. develop time management skills by
setting priorities for completing work as
scheduled;
7.c. make decisions using appropriate
accounting concepts;
7.e. perform accounting procedures
using manual and automated methods;
7.g. demonstrate use of the numeric
keypad by touch
This lesson, as published, correlates to
the following TEKS. Any
changes/alterations to the activities may
result in the elimination of any or all of
the TEKS listed.
130.166.C
N/A
TAKS Correlation:
WRITING
Objective 5: The student will produce a piece of writing that demonstrates a
command of the conventions of spelling, capitalization, punctuation, grammar, usage,
and sentence structure.
Objective 6: The student will demonstrate the ability to revise and proofread to
improve the clarity and effectiveness of a piece of writing.
MATH
Objective 10: The student will demonstrate an understanding of the mathematical
processes and tools used in problem solving.
Materials, Equipment and Resources:


Textbook
Journal Input Form
Activity 7.10.4 – Analyzing and Journalizing Reversing EntriesUNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1
Teaching Strategies:


Observation
Verbal Drills
Activity Outline:
1. Discuss when a reversing entry needs to be made at the beginning of the
next fiscal period. Demonstrate the analysis of a reversing entry.
2. Ask students to write a one page paper explaining reversing entries. The
paragraph should include why reversing entries are necessary as well as
what accounts are involved. The paragraph should also explain why most
businesses choose not to reverse the entry for Federal Income Tax Payable.
3. Have your students use input forms to journalize the two adjusting entries for
Activity 3.
Assessment:


Observation
Graded Assignment
Quality Feature
Participates in class discussion and demonstration
Paper includes all required topics
Paper well-written
Paper contains no grammatical or typing errors
Completes journal input forms accurately for Activity 3
Completes in a timely manner
Score
Activity 7.10.4 – Analyzing and Journalizing Reversing EntriesUNT in partnership with TEA, Copyright © All rights reserved.
ACCOUNTING 1