Accounting Software Assignment – Part IV
Introduction
The accounting software project involves creating a simplified real-time accounting financial package.1 Realtime accounting means that the financial statements can be updated throughout the financial period rather
than just at the end of the period. There are five parts to this assignment. Part IV creates the adjusting
journal, worksheet, income statement, balance sheet, and statement of changes in retained earnings.
SPRING 2009 CHANGES TO DIRECTIONS
To ensure all students complete their own work, please make the following changes as you complete each
part of this project:
(1)
Record all transactions for the month you were born. For example, my birthday is in February,
thus I would use Feb 1, 2009 as the transaction date for the first transaction below.
(2)
Change the names of the investors to three of your favorite relatives or friends. For example, I
could record the first transaction as Bryleigh’s investment, the second transaction as Bram’s
investment, and the third transaction (completed in Part II) as Brice’s investment.
The Adjusting Journal
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To copy the ‘General Journal’ sheet, select the ‘General Journal’ tab, hold down the CTRL key, drag
the mouse to the right of the ‘Trial Balance’ tab, release the mouse, and release the CTRL key.
Rename ‘General Journal (2)’ as ‘Adjusting Journal.’
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Unprotect ‘Adjusting Journal’ sheet if the sheet is protected.
In Excel 2003:
 On the ‘Tools’ menu, click ‘Protection.’ Then, select ‘Unprotect Sheet.’
In Excel 2007:
 On the ‘Home’ tab, in the ‘Cells’ group, click ‘Format.’ Then, select ‘Unprotect Sheet.’
This assignment is adopted from materials developed by an anonymous author. He/she should be credited for your
successes with this assignment, I will shoulder the responsibility for any frustrations with the assignment.
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Change the heading to ‘ADJUSTING JOURNAL.’
Change the other headings, by adding ‘ADJ’ in front of them.
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To copy all the formulas and erase the data, verify that cells A29:G33 have formulas using ‘Show
Formulas’ function (i.e., CTRL-~).
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Select A29:G53, and copy to cell A4.
Add the following Adjusting Entries.
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ADJ Date
ADJ Transaction
ADJ Account
5/31
1
5101
1110
ADJ Name
ADJ Description
Record insurance payment
ADJ Debit ADJ Credit
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150
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8
9
10
11
12
13
14
15
16
17
18
19
21
22
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3300
1110
Record dividend distribution
5110
1511
Record computer equipment
2103
1110
Record commissions payment
100
1475
1475
169.25
169.25
Note that total computer equipment ($88,500) is depreciated over a five year period.
To name all the columns, select A3:H298.
In Excel 2003:
 Click on ‘Insert’ menu, point to ‘Name’ and then select ‘Create.’
 Select ‘Top row’ and then click OK.
In Excel 2007:
 On the ‘Formulas’ tab, click ‘Create from Selection.’
 Select ‘Top row’ and then click OK.
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Rename the headings in A3:H5 to look like the picture below:
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To protect the ‘Adjusting Journal’ sheet,
In Excel 2003:
 On the ‘Tools’ menu, click ‘Protection.’ Then, select ‘Protect Sheet.’ A password is optional.
In Excel 2007:
 On the ‘Home’ tab, in the ‘Cells’ group, click ‘Format.’ Then, select ‘Protect Sheet.’ A
password is optional.
Test to make sure the data validation you added in Part II still applies to cells in column C and to cells G5
and G10. For column C, you should get a message if you attempt to enter any invalid account number. For
cells G5 and G10, you should get a message when you attempt to enter any value. If not, go back to the
directions in Part II and add the data validation.
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The Worksheet
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To create the worksheet, copy the ‘Trial Balance’ by selecting its worksheet tab, hold down the
CTRL key, drag the mouse to the right of the ‘Adjusting Journal’ tab, release the mouse, and release
the control key.
Rename ‘Trial Balance (2)’ as ‘Worksheet.’

Unprotect ‘Adjusting Journal’ sheet if the sheet is protected.
In Excel 2003:
 On the ‘Tools’ menu, click ‘Protection.’ Then, select ‘Unprotect Sheet.’
In Excel 2007:
 On the ‘Home’ tab, in the ‘Cells’ group, click ‘Format.’ Then, select ‘Unprotect Sheet.’
*
If the ‘Worksheet’ shows ‘#N/A’ in each cell instead of number, copy E6:E22 in ‘Trial Balance’
sheet and paste them to E6:E22 in ‘Worksheet’ sheet.
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Rename the Heading in B2 to ‘Worksheet.’
Insert a new row 5 and add the heading ‘Trial Balance’ in C5. Change the font color to blue.
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Change cell B3 to
="For the Period Ending the Last Day of " & TEXT(MAX(Date),"MMMM YYYY")
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Cut column E and paste the data in column M.
Add a border around the range C6:C25 and D6:D25, and C5:D5.
Select C5 and D5 and merge cells.
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Copy the range C5:D25 to E5, G5, I5, and K5.
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Select the range C5:L5 and right click. Select ‘Format Cells.’ Under the ‘Alignment’ tab select ‘Center’
for both ‘Horizontal’ and ‘Vertical’ and click on ‘Wrap text’ under the ‘Text control’.
Change column M color from white to black and copy column M to column N.
Change the heading in N6 to “ADJ TB Balance.”
Change the formula in the cell N7 (i.e. cell in ‘Cash’ – row 7)
=SUMIF(ADJ_Account, A7, ADJ_GJ_Balance)
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Copy N7 to N8: N23.
Change the formulas in the ‘Adjusting Entries.’
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Change the heading in E5 to “Adjusting Entries.”
Change the formulas in E7: “=IF(N7>0, N7, "").”
Change the formulas in F7: “=IF(N7<0, -N7, "").”
Copy E7:F7 to E8:F23.
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The debit in the ‘Adjusted Trial Balance’ is equal to the ‘Trial Balance Debit – the Trial Balance Credit +
the Adjusting Entry Debit - the Adjusting Entry Credit or TB_Balance (column M) + ADJ_TB_Balance
(column N).’
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Type the heading “WS_Balance” in cell O6.
Change the fill to ‘No Fill’ and change the font to regular.
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Type the formula in cell O7: “=M7+N7.”
Copy O7 to O8:O23.
Type the formula in cell O25: “=SUM(O7:O23).”
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Select the range M5:M6 and right click. Select ‘Format Cells.’ Under the ‘Alignment’ tab select
‘Center’ for both ‘Horizontal’ and ‘Vertical’ and click on ‘Wrap text’ and ‘Merge cells’ under the ‘Text
control’. Repeat it for N5:N6 and O5:O6.
Change the formulas in the ‘Adjusted Trial Balance.’
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Change the heading in G5 to “Adjusted Trial Balance.”
Change the formulas in G7: “=IF(O7>0, O7, "").”
Change the formulas in H7: “=IF(O7<0, -O7, "").”
Copy G7:H7 to G8:H23.
If the account number is equal to or greater than 4000 then it goes into the ‘Income Statement.’ If the item
in column O is positive it is a debit.
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Change the heading in I5 to “Income Statement.”
In cell I7 type: “=IF(A7>=4000, IF(O7>0, O7, ""), "").”
In cell J7, type: “=IF(A7>=4000, IF(O7<0, -O7, ""), "").”
Copy I7:J7 to I8:J23.
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If the account number is less than 4000 then it goes into the ‘Balance Sheet.’ If the item in column O is
positive it is a debit.
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Change the heading in K5 to “Balance Sheet.”
In cell K7 type: “=IF(A7<4000, IF(O7>0, O7, ""), "").”
In cell L7, type: “=IF(A7<4000, IF(O7<0, -O7, ""), "").”
Copy K7:L7 to K8:L23.
Since the total of the Income Statement credits is greater than the debits, there is a profit equal to the
difference.
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In cell I26 type: “=IF(J25>I25, J25-I25,"").”
In cell J26 type: “=IF(I25>J25, I25-J25, "").”
In Cell B26, type “Net Income.”
Copy I26:J26 to K26:L26.
In cell I27, type: “=SUM(I25:I26).”
Copy I27 to J27:L27.
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The date must be the latest date in either the general journal or the adjusting entries.

In cell B3 type:
="For the Period Ending the Last Day of " & TEXT(MAX(Date, ADJ_Date), "MMMM YYYY")
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Change the font color of columns M:O to white.
The Income Statement

Copy the ‘Worksheet’ sheet. To copy the ‘Worksheet’ sheet, select the ‘Worksheet’ tab and hold
down the CTRL key. Next, drag the mouse to the right of the old ‘Worksheet’ tab. Then, release the
mouse, and release the CTRL key.
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In ‘Worksheet(2)’ sheet, delete columns C through column O.
In D7, type “=ABS(Worksheet!O7).”
Copy the formula through D23.
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Copy the ‘Worksheet(2)’ sheet. To copy the ‘Worksheet(2)’ sheet, select the ‘Worksheet(2)’ tab and
hold down the CTRL key. Next, drag the mouse to the right of the old ‘Worksheet(2)’ tab. Then,
release the mouse, and release the CTRL key.
Name the ‘Worksheet (3)’ as “Income Statement.”
Change the Heading in B2 as “Income Statement.”
Delete the rows related to balance sheet account (i.e., delete row 6 through 18).
Delete rows, insert rows, and type headings and values where need to look like the picture below.
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Select the range D5:D19 and right click. Select ‘Format Cells.’ Under the ‘Number’ tab select
‘Number,’ 0 decimal places, use 1000 separator (,), and under ‘Negative numbers,’ select ‘(1,234).’
The ‘Total Revenue’ cell should sum the revenue items. For example, if total revenue is in row 7, the sum
formula would be @sum(D5:D6). Similarly, the ‘Total Expenses’ cell should sum expense items.
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Type the formula in cell D7: “=SUM(D5:D6) .”
Type the formula in cell D13: “=SUM(D9:D12) .”
The ‘Net Income Before Tax’ is equal to the ‘Total Revenue’ less the ‘Total Expenses.’
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Type the formula in cell D15: “=D7-D13.”
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The tax expense is 40% of the net income, which is included on the documentation tab.
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Enter “=Documentation!B3” in C16.
Name C16 as ‘Tax_Rate’ in the “Name Box” and click Enter.
Format Column C as percentage.
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Type the formula in cell D17: “=ROUND(D15 * Tax_Rate, 0).”
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The ‘Net Income After Tax’ is equal to the ‘Net Income Before Tax’ less the ‘Tax Expense.’
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Type the formula in cell D19: “=D15-D17.”
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Add lines before ‘Total Revenue’ and ‘Total Expenses.’ Add lines before and after ‘Net Income After
Tax.’
Your ‘Income Statement’ should now look like this:
The tax expense must be linked to the adjusting entries.
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Enter the following journal entry in the ‘Adjusting Journal’ sheet.
ADJ Date
ADJ Transaction
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ADJ Account
ADJ Name
5120
2106
ADJ Description
Income tax expense
Type the formula in both F25 and G26: “='Income Statement'!D17.”
Changes in Retained Earnings Statement
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In the ‘Chart of Accounts’ sheet, add account 3200 Retained Earnings.
Select the ‘Chart of Accounts’ worksheet.
Insert 2 rows just below A24.
Enter the following data.
A
B
C
……
……
……
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3200.000
Retained earnings
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3200.001
Not a valid account
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ADJ Debit ADJ Credit

If the ‘Trial Balance’ sheet is protected, remove the protection.
In Excel 2003:
 Click on ‘Tools’ menu, point to ‘Protection’ and then select ‘Unprotect Sheet.’
In Excel 2007:
 On the ‘Home’ tab, click ‘Format’ and then select ‘Unprotect Sheet.’
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Insert a row before ‘Dividends’ in the ‘Trial Balance’ sheet.
Type “3200” in A17 and “Retained earnings” in B17.
Copy C16:E16 to C17: E17.
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Insert a row before ‘Dividends’ in the ‘Worksheet’ sheet.
Type “3200” in A18 and “Retained earnings” in B18.
Copy C17:O17 to C18: O18.
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Copy the ‘Worksheet(2)’ sheet. To copy the ‘Worksheet(2)’ sheet, select the ‘Worksheet(2)’ tab and
hold down the CTRL key. Next, drag the mouse to the end. Then, release the mouse, and release the
CTRL key.
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Name the ‘Worksheet(3)’ as “Changes in Retained Earnings.”
Change the Heading in B2 as “Changes in Retained Earnings.”
Insert a row before ‘Dividends’ in the ‘Changes in Retained Earnings’ sheet.
Type “3200” in A18 and “Retained earnings” in B18.
Copy D17 to D18.
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Delete the rows containing accounts that should not appear on the ‘Changes in Retained Earnings’
sheet (i.e., delete row 5 through 17 and row 20 through 26).
Insert rows and type headings and values where need to look like the picture below.
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Type the formula in cell D7: “='Income Statement'!D19.”
Total the new retained earnings total by adding the ‘Net income’ and subtracting the ‘Dividends’ from the
beginning retained earnings balance.
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Type the formula in cell D11: “=D5+D7-D9.”
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The Balance Sheet
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
Rename the ‘Worksheet(2)’ as “Balance Sheet.”
Change the Heading in B2 as “Balance Sheet.”
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Insert a row before ‘Dividends.’
Type “3200” in A18 and “Retained earnings” in B18.
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Copy D17 to D18.
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Change the formula in cell D7 to ‘=(Worksheet!O7).’
Copy cell D7 to D8:D12.
Delete the rows containing accounts not in the balance sheet (i.e., delete row 6 and row 19 through
27).
Delete rows, insert rows, and type headings and values where need to look like the picture below.
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Add sum formulas as needed.
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Type the formula in cell E12: “=SUM(D6:D11) .”
Type the formula in cell D20: “=SUM(D16:D19) .”
Type the formula in cell D24: “=SUM(D22:D23) .”
Type the formula in cell E26: “=E20+E24.”
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The ‘Income tax payable’ account must be linked to the ‘Adjusting Journal.’

Type the formula in cell D18: “='Adjusting Journal'!G26.”
(Note: This assumes that the credit to account 2106 is found in cell G26 of your ‘Adjusting Journal.’
If your credit is in a different cell, enter that cell here.)
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The ‘Retained earnings’ must be linked to the ‘Statement of Changes in Retained Earnings.’

Type the formula in cell D23: “='Changes in Retained Earnings'!D11.”
(Note: This assumes that the ‘New retained earnings’ is found in cell D11 in the ‘Statement of
Changes in Retained Earnings’ worksheet. If not, enter the appropriate cell.)
Select cells D6:E26 and format as ‘Accounting,’ 0 decimal places, and ‘None’ under the “Symbol”
drop down box.
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Deliverable:

Email me your spreadsheet file renamed FirstName_LastName_part4.xls. For example, my
file would be Diane_Janvrin_part4.xls.
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