| Course | AC298 Associate's Capstone in Accounting |
|---|---|
| Unit | Unit 4 |
| Paper type | Adjusted statement package |
| Length | About 580 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | Associate of Applied Science in Accounting |
| Updated | October 2026 |
Free sample paper for AC298 Unit 4
Seven Adjustments Before Any Statement: A Unit 4 Year-End Package for a Tile and Flooring Store
[Student Name]
Purdue University Global
AC298: Associate's Capstone in Accounting
Unit 4 Adjusted Statement Package
[Instructor Name]
[Date]
Kiln Road Tile & Flooring and every amount are composite; the textbook, framework and credit loss standard cited are real.
Adjusting Entries, December 31
A-1. Insurance for December: Insurance Expense, debit $550; Prepaid Insurance, credit $550. A-2. Supplies used: $1,400 on the books, $500 counted; Store Supplies Expense, debit $900; Store Supplies, credit $900. A-3. Truck depreciation: ($42,000 cost less $7,000 salvage) over five years, $7,000 for the year; Depreciation Expense, debit $7,000; Accumulated Depreciation, Truck, credit $7,000. A-4. Fixtures depreciation: $28,000 over ten years, $2,800; Depreciation Expense, debit $2,800; Accumulated Depreciation, Fixtures, credit $2,800. A-5. Wages for December 27 to 31: Wages Expense, debit $1,900; Wages Payable, credit $1,900. A-6. Shrinkage: the physical count found $89,900 of tile and supplies at cost against $91,520 in the records; Cost of Goods Sold, debit $1,620; Merchandise Inventory, credit $1,620. A-7. Allowance: the aging requires $2,600, and the account holds $300; Bad Debt Expense, debit $2,300; Allowance for Doubtful Accounts, credit $2,300.
A-6 and A-7 have no outside document behind them, only a count and an aging, which is why they are the entries most easily delayed and the ones the ethics unit will return to. Recording them in the year they belong to is part of the credibility standard management accountants are held to, which asks accountants to give users every fact that bears on how the results should be read (Institute of Management Accountants, 2017).
Multi-Step Income Statement, Year Ended December 31
Sales $682,800, less sales returns and allowances $8,700: net sales $674,100 (S-1). Cost of goods sold: $414,340 (S-2). Gross profit: $259,760, or 38.5 percent of net sales (S-3). Operating expenses: wages $129,700; store rent for the year $48,000; advertising $10,400; utilities $10,880; truck expense $7,920; depreciation $9,800; insurance $6,600; bad debt expense $2,300; supplies $900. Total $226,500. Operating income: $33,260. Interest expense: $1,800. Net income: $31,460 (S-4).
Statement of Owner's Equity
Capital, January 1: $148,700. Add net income (S-4): $31,460. Less withdrawals: $48,000. Capital, December 31: $132,160 (S-5).
Classified Balance Sheet, December 31
Current assets: cash $6,510; accounts receivable $41,800 less allowance $2,600, $39,200; merchandise inventory $89,900; prepaid insurance $2,750; store supplies $500. Total current assets $138,860 (B-1). Property and equipment: truck $42,000 less $21,000, $21,000; fixtures $28,000 less $12,600, $15,400. Total $36,400. Total assets: $175,260. Current liabilities: accounts payable $9,500; wages payable $1,900; unearned revenue $1,700; current portion of note payable $10,000. Total $23,100 (B-2). Long-term liability: note payable, less current portion, $20,000. Total liabilities: $43,100 (B-3). Owner's equity (S-5): $132,160. Total liabilities and owner's equity: $175,260.
Closing Entries
1. Sales, debit $682,800; Income Summary, credit $682,800.
2. Income Summary, debit $651,340; credits to each operating expense and interest, plus the $8,700 of returns and the $414,340 cost of tile sold, totaling $651,340.
3. Income Summary, debit $31,460; Capital, credit $31,460.
4. Capital, debit $48,000; Withdrawals, credit $48,000.
What the Package Shows
Teresa withdrew $48,000 in a year the store earned $31,460, so her capital fell by $16,540. The allowance was set from an aging, consistent with current guidance that receivables be reported at the amount expected to be collected (Financial Accounting Standards Board, 2016). Each S, B and A number above is entered on the reference sheet so Unit 5 can use only these adjusted figures (Franklin et al., 2019).
References
Financial Accounting Standards Board. (2016). Financial instruments, credit losses (Topic 326): Measurement of credit losses on financial instruments (Accounting Standards Update No. 2016-13). https://www.fasb.org
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting
Institute of Management Accountants. (2017). IMA statement of ethical professional practice. https://www.imanet.org/career-resources/management-accounting-competencies/ethics-center
Reading the AC 298 Unit 4 instructions
The fourth AC298 unit asks for the year-end package built on the unadjusted trial balance. Record every adjusting entry first, with its calculation: expired prepaid costs, supplies used, depreciation for the year, accrued wages and interest, inventory shrinkage from the physical count and the allowance from the aging. Then prepare a multi-step income statement, the statement of owner's equity for a sole proprietorship, and a classified balance sheet with receivables shown net and the note split into current and long-term parts. Record the closing entries. Give each figure that later units will use a reference number. Explain anything the statements reveal about the business. Expect four to five pages. Cite the textbook and relevant standards in APA 7.
Inside the AC298 Unit 4 example
The sample records seven adjustments labeled A-1 to A-7, each with its arithmetic. The highlighted sentence notes that shrinkage and the allowance rest only on internal evidence, linking forward to the ethics unit, with a citation to the IMA statement. The income statement runs from net sales of $674,100 through gross profit and nine operating expenses to net income, with S numbers on key lines. The owner's equity statement shows capital falling to $132,160. The balance sheet lists current assets of $138,860, property of $36,400 and liabilities of $43,100, with B numbers. Four closing entries follow, and a final section explains the withdrawals story and the reference sheet.
Reading the AC298 Unit 4 grading rubric
Statement packages are graded on correct adjustments, correct statements and correct closing. Each adjustment must be supported by its calculation. Shrinkage and the allowance are frequent scoring points in this capstone. The income statement must be multi-step, with returns netted from sales. Equity must roll forward correctly with withdrawals. The balance sheet must classify assets and liabilities and show receivables net. Closing entries must reset every temporary account. Reference numbers that later units can cite earn credit in AC298. Format, headings and APA 7 citations complete the grade for the package. Since every later unit quotes these statements, graders also check that the balance sheet balances and that equity on it matches the equity statement to the dollar.
AC298 Unit 4 help: mistakes that cost points
The most common package errors are leaving shrinkage or the allowance until after the statements, classifying the whole bank note as long-term, and showing receivables gross. Others compute depreciation for one month instead of the year. Withdrawals appear on the income statement. Accrued wages are forgotten, as the Unit 1 post predicted. Closing entries miss sales returns. Figures carried into later units are not numbered, so inconsistencies cannot be traced. A package that balances but quietly uses a different inventory figure from the count will unravel when the ratio analysis is checked against it. If your unadjusted trial balance is ready and you need the full year-end package, our team can prepare it from your capstone data.
Get an AC298 Unit 4 example written to your instructions
Attach the unadjusted trial balance or your Unit 3 results, the adjustment figures the problem supplies, and the rubric for Unit 4. The free first package arrives in 24-48h with every adjustment computed in view and each statement drawn from the adjusted column, closing entries added if your instructions ask for them. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More AC298 papers and Associate of Applied Science in Accounting samples
- AC298 Unit 1: Capstone Weak Spot Post
- AC298 Unit 2: Capstone Proposal and Scope
- AC298 Unit 3: December Transaction Recording Set
- AC298 Unit 5: Ratio Analysis
- AC298 Unit 6: Ethics Scenario Response
- AC298 Unit 7: Seminar Progress Check
- AC298 Unit 8: Recommendation Memo
- AC298 Unit 9: Career Portfolio Piece
- AC298 Unit 10: Capstone Presentation
AC298 Unit 4 questions, answered
Do I need a statement of cash flows in this package?
Only if the problem asks for one, and many capstone problems do by this stage. When it is required, the indirect method is the usual choice at the associate level, starting from net income and adjusting for depreciation and changes in current accounts. The sample includes one on request and ties its ending cash figure to the balance sheet.
Where does inventory shrinkage belong on the statements?
Most associate-level problems send it to cost of goods sold, which lowers gross profit and makes the loss visible in the margin. Some instructors prefer a separate line for inventory shrinkage so the owner can see it. Either is defensible if applied consistently and explained. What matters for the capstone is that the ratio analysis later uses the same figure.
How do I show that the statements agree without cluttering them?
Use reference numbers from a single sheet rather than long notes. Each figure that appears twice gets one number, and the reference sheet lists every number with its source line. Graders can then check any pair in seconds. The sample places the numbers in a narrow margin column so the statements themselves remain in standard format.
Where can I find a free AC298 Unit 4 sample paper?
This page has a complete AC298 Unit 4 year-end package for a tile and flooring store, with seven adjustments, a multi-step income statement, an equity statement, a classified balance sheet and closing entries.
Why did owner's equity fall in the AC298 Unit 4 sample?
The owner withdrew $48,000 during a year in which the store earned $31,460, so capital fell by $16,540, from $148,700 to $132,160.