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Using Excel
P2-41 Using Excel to journalize and post transactions, and to create financial statements
Redmond Corporation started operations on April 1, 2018. Seventeen transactions occurred
during April. Financial statements are prepared at the end of the month.
Requirements
1. Use Excel to record the transactions for April. Use the blue shaded areas for inputs.
a. To record the account name in the journal, click in the Account and Explanation column.
A drop down arrow will appear to the right. Click the arrow and select an account from
the chart of accounts. Use the explanation to help you with the entry.
b. Indent the account name of the account to be credited using the indent button on the
Home tab. Click the Increase Indent button twice.
2. Post the transactions to T-Accounts. Use the blue shaded areas for inputs.
a. For each transaction, post the amount on the correct side of the T-Account. The T-account
totals will be calculated automatically.
b. Total debits should equal total credits. The debit-credit balance check appears in the top
right-hand corner of the T-Account worksheet.
3. Prepare the income statement, statement of retained earnings, and balance sheet for the
company using the trial balance. Each financial statement appears on a separate worksheet
tab.
a. Fill in the blue shaded areas using a formula that references the account balances in the
trial balance at the end of the month.
b. Format the cells requiring dollar signs. Number formatting is located on the Home tab.
c. Format the cells requiring a single underline and cells requiring double underlines. The
borders tool is found on the Home tab. It looks like a window pane. Click the down arrow
for different border selections.
SOLUTION
Continuing Problem
P2-42 Journalizing transactions, posting to T-accounts, and preparing a trial balance
Problem P2-42 continues with the company introduced in Chapter 1, Canyon Canoe Company.
Here you will account for Canyon Canoe Company’s transactions as it is actually done in
practice. Begin by reviewing the transactions from Chapter 1. The transactions have been
reprinted below.
Nov. 1 Received $16,000 cash to begin the company and issued common stock to Amber and
Zach.
2 Signed a lease for a building and paid $1,200 for the first month’s rent.
3 Purchased canoes for $4,800 on account.
4 Purchased office supplies on account, $750.
7 Earned $1,400 cash for rental of canoes.
13 Paid $1,500 cash for wages.
15 Paid $50 dividends to stockholders.
16 Received a bill for $150 for utilities. (Use separate payable account.)
20 Received a bill for $175 for cell phone expenses. (Use separate payable account.)
22 Rented canoes to Early Start Daycare on account, $3,000.
26 Paid $1,000 on account related to the November 3 purchase.
28 Received $750 from Early Start Daycare for canoe rental on November 22.
30 Paid $100 dividends to stockholders.
In addition, Canyon Canoe Company completed the following transactions for December.
Dec. 1 Amber and Zack contributed land on the river (worth $85,000) and a small building to use
as a rental office (worth $35,000) in exchange for common stock.
1 Prepaid $3,000 for three months’ rent on the warehouse where the company stores the
canoes.
2 Purchased canoes signing a note payable for $7,200
4 Purchased office supplies on account for $500.
9 Received $4,500 cash for canoe rentals to customers.
15 Rented canoes to customers for $3,500, but will be paid next month.
16 Received a $750 deposit from a canoe rental group that will use the canoes next month.
18 Paid the utilities and telephone bills from last month.
19 Paid various accounts payable, $2,000.
20 Received bills for the telephone ($325) and utilities ($295) which will be paid later.
31 Paid wages of $1,800.
31 Paid cash dividend to stockholders, $300.
Requirements
1. Journalize the transactions for both November and December, using the following accounts:
Cash; Accounts Receivable; Office Supplies; Prepaid Rent; Land; Building; Canoes;
Accounts Payable; Utilities Payable; Telephone Payable; Unearned Revenue; Notes Payable;
Common Stock; Dividends; Canoe Rental Revenue; Rent Expense; Utilities Expense; Wages
Expense; and Telephone Expense. Explanations are not required. (Hint: For November
transactions, refer to your answer for Chapter 1.)
2. Open a T-account for each of the accounts.
3. Post the journal entries to the T-accounts, and calculate account balances. Formal posting
references are not required.
4. Prepare a trial balance as of December 31, 2018.
5. Prepare the income statement of Canyon Canoe Company for the two months ended
December 31, 2018.
6. Prepare the statement of retained earnings for the two months ended December 31, 2018.
7. Prepare the balance sheet as of December 31, 2018.
8. Calculate the debt ratio for Canyon Canoe Company at December 31, 2018.
SOLUTION
Requirement 1
P2-42, cont.
Requirement 1, cont.
P2-42, cont.
Requirements 2 and 3
P2-42, cont.
Requirements 2 and 3, cont.
P2-42, cont.
Requirement 4
