Question

You have been hired as an accountantfor B&G Co., a corporation performing diverse consultingservices in Detroit, Michigan. B&G Co. prepares financialstatements on monthly bases.

ProjectScope: You are to record the transactions forDecember, prepare the monthly adjustments, and prepare thefinancial statements using the Excel workbook provided. Then youwill close the fiscal year and prepare the books for next year.

Directions: The assignment encompasses twofiles: Directions and Transactions (this Word document)and Forms (a separate Excel workbook). Your solutionshould be worked in Excel and the completed Excel workbooksubmitted for grading.

You should use Excel formula whereappropriate and cell references to carry forward values and numbersbetween worksheets within the workbook. Simply typing values inExcel will result in a reduced score, even if the correctsolution is provided. You should use formula whereverpossible.

Analyze the narrative to prepare and record the transactions forDecember to the General Journal.

Post the journal entries to ledger accounts using T-accounts(Don’t forget the opening balances from the information given onthe post-closing trial balance on Nov. 30th.)

Prepare Income Statement and the Retained Earnings Statement forthe month ended December 31, 2016 and Balance Sheet as of December31, 2016 in good forms. Use the multi-step format for the IncomeStatement.

Close the temporary accounts, posting any net income or loss toretained earnings.

Due Date: Dec.8th.

Transactionsin December 2016:

Dec.	1	The equipment was completely destroyed by the regional earthquake. “Loss by earthquake” was recognized.
	1	Lent cash to another company and received a 2 year, $20,000zero-interest-bearing note. The market rate of interest for a noteof similar risk is 9 percent.
	1	Purchased new equipment that costs $12,000 and issued 1,000shares of common stock (no-par stock) to the equipment seller.
	3	Cash payment on accounts payable amounted to $6,000.
	4	Sold land for $13,000 cash.
	10	Collected $15,000 as payment for amounts previously billed(suppose the payment was made within the discount period).
	13	One of the customers went bankrupt. B&G wrote off $2,000account receivable.
	15	Paid monthly salaries of $20,000 to employees
	16	Issued 1,000 shares of preferred stock at $10 per share
	17	Purchased 500 shares of ABC corporation’s common stock at $15(per share) and classify the securities as available-for-salessecurities
	20	Found that the company incorrectly overstated its Novemberaccount receivable and sales revenue by $1,000 and made a journalentry to correct the error.
	29	Performed services for a customer for $30,000 cash
	30	Performed $30,000 services on account with the following terms:2/15, n/30. B&G records credit sales using the net method
	31	Dividends of $5,000 were declared and paid. $ 1,025 is paid topreferred stockholders and the rest is paid to the common stockholders.
	31	ABC corporation declared $ 5 dividend per share (to common stockholders). It will be paid in 2017.

* Additional information

1. Ignoretax effect.

2. Salariesexpenses incurred but not paid prior to Dec. 31^sttotaled $10,500.

3. Thecompany received the bill for utility services (electricity) thatthe firm used during December in the amount of $6,000. The companywill pay the bill in Jan. 2016.

4. $3,000 ofsupplies remained at the end of December.

5. Thecompany use the “Allowance” method for possible accounts receivablewrite-offs in the future and estimated that 5% of the outstandingaccount receivable will not be collected.

6. The equipmentpurchased on Dec. 1^st depreciates $200 per month.

7. Thecommon stock price of ABC Corporation on December 31st is still $15 per share.