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Excel Workshop Level 4:

Preparing a Complete Set of Financial Statements


Using Excel Workbooks

Saturday, November 8, 2014


1:00 PM to 3:30 PM
Fiterman Hall, Room F1007
BMCC

After completing this workshop,


students will be able to:
Create Balance Sheets, Income
Statements and Statements of
Stockholders Equity.
Summarize Data with Subtotals.
Use Excel to check their work.
Make a workbook compatible with
earlier versions of Excel.
Review the skills acquired in the last
three levels with this Excel workshop.

Adding Borders
In many portions of this exercise, cell
borders should be added to the
bottom of certain cells to distinguish
them as special cells that signify the
use of a function in the cell below
(totals).
These distinguished cells serve an
important purpose in the preparation
of the financial statements that you
will learn about later.

In this example, single


line borders will be
added to Cells C6,
C14 and C19.
A Double Line will be
added to cell C20.

Steps
To add a border, highlight a cell (in
the example, cell C6 is highlighted).
Right click the cell and select Format
Cell from the dropdown menu. A new
window will appear on the screen.

Click on Format
Cells.
Alternatively,
you can also
Format Cells by
accessing the
Format Cells
icon in the Home
Tab, above the
Cells ribbon.

Single
Line
Border

Initially, Presets will be


set at NONE. A sample
cell below is shown
directly below.
Click on the Add
bottom border icon to
add a border to the
bottom of the cell.

Double
Line
Border
You can select different
border styles from the Style
ribbon, including the single
line and double line borders.

Steps (Continued)
Select a part of the cell in which you
want a border. You can do this by selecting
one the icons surrounding the sample cell, or
by selecting one of the preset icons.
Select a border style from the Style
Ribbon. The style you selected will be shown
on the sample cell directly to the right.
Once you are finished choosing a border/style,
click OK. A border will be added to your
highlighted cells.

Cell with a single line


border

Cell with a double


line border

Creating Financial
Statements
The Income Statement, Balance
Sheet and Statement of Cash Flow
are the three most useful financial
statements in the field of accounting.
To start creating these three vital
documents, you will start with a trial
balance (list of transactions) and
gradually transfer the data to three
new worksheets to create the three
financial statements.

Steps
Open the MS Excel File containing the
Adjusted Trial Balance for Dress Right
Clothing Corp.
Begin by highlighting only the data portion
of the trial balance. Next, you will sort the
data (from smallest to largest) in the
worksheet by using the Sort tool under
the
UseData
this totab
sorton the ribbon.
the data from
Smallest to
Largest

A Quick Note
Before continuing to step 3, create a new worksheet (Select Sheet 2
on the lower left corner of the screen).
Copy all of the text/data from the Adjusted Trial Balance and paste
it to the new worksheet.
To paste the data into the new sheet, make Sheet 2 the active
worksheet (click on it) and then right click any cell in the
worksheet.
Select Paste Special and a new window will appear.
Select the Values and Number Formats option under the paste
options to have Excel paste the entirety of the data (while retaining
the same number format) from the first worksheet to the second.
Finally, right click Sheet 2 and select rename, Change the title of
Sheet 2 to ATB Manual.
We will refer to this worksheet later on.

When the Paste


Special menu pops
up, change the
Paste Option to:
Values and
Number Formats.

Steps (Continued)
Once the data has been sorted,
highlight the data (including the
headers) and create a table by
going to the Insert Tab and selecting
the
icon. When the new window
appears, check the box stating My
table has headers.

Check My table
has headers to
format the
worksheet properly.

Steps (Continued)
Once you have created a table, go to
the Design Tab/Table Tools ribbon
on the top of the screen and select
Convert to Range (above the Tools
Ribbon).
This will restore the data in the table
into regular data, but the column
headers will remain in tact.
Click this
option.

Steps (Continued)
Select/Highlight any cell containing data in the range. Go
to the Data Tab and select the Subtotal Icon to create
new cells containing the total balance for each account. A
new window will appear (see the image on the next page).
To have Excel display subtotals for each account (Cash,
Investments, Accounts Receivable, etc), select Account
Title from the dropdown menu under At each change in.
Use function simply tells Excel to use the selected function
to create the subtotal for each new account/category, for
this exercise, select SUM. Add subtotal to establishes
which properties Excel will display as subtotals. Check the
boxes for Debits and Credits to have subtotals for each
account debited and credited. Click OK.

Once you click ok, Excel


will create Subtotals for
each account. You can
toggle through the various
subtotals/summaries Excel
has created by clicking on
the new buttons (1, 2,3
that appear on the left).

Subtotals for each account are now listed under the last cell of
each account.

You have just finished one of the most important parts in creating
a financial statement. We will now leave the adjusted trial
balance and move onto the 2nd worksheet that we titled ATB
Manual.

Steps
Highlight the range A4:D149 and
right click any cell. Select Format
Cells. Go to the Number tab. Under
Categories, select Number. On the
right side, set the Decimal place to 0
and select the red set of numbers
under parentheses under Negative
Numbers.

Setting Decimal
places to 0
removes any
decimal places
from the numbers
in every cell.
The option for
negative numbers
shown to the left
distinguishes any
negative numbers
by: changing the
font color to red
and putting them
inside
parentheses.

Steps (Continued)
Observe the data in this worksheet.
Manually Change every number
under the credit column into a
negative number and then move
it into the Debit column (there are
many shortcuts to doing this,
including: using AutoFill before
copying and pasting large sets of
numbers).

Hint:
In a cell adjacent to
any cell containing a
credit, enter = - .
After the sign, click
on the cell containing
an amount credited
(this will produce a cell
with a negative
number).
Move the cursor to the
bottom right corner of
the cell.
When the cursor
changes to a small
dark + sign, drag the
cursor until you reach
the cell adjacent to the
last amount credited.
Copy these cells, and
use paste special to
copy the numbers into
the Debit column.
Make sure to delete

Steps (Continued)
Go to Cell C4, change the title from
Debits to Amount. Highlight cells C4
and D4 and select Merge and Center
from the Alignment Ribbon under the
Home tab.
You have now created a simplified
Adjusted Trial Balance that will be
used to create a new worksheet that
will serve as a host worksheet for
the three financial statements.

Creating the Groups Worksheet


Using VLOOKUP
The Groups worksheet will serve as
the central source from which all of
the financial statements will draw
data. You will use AutoFill and the
VLOOKUP function in this worksheet
to verify the amounts that
corresponds to each account.

Steps
Create a new worksheet by clicking Sheet 3
on the lower left side of the screen. Right
click the tab entitled Sheet 3 and select
rename. Name the worksheet Groups
Copy the data from ATB Manual and Paste it
into the Groups Worksheet. Delete every cell
containing a number.
Insert two rows after between every
new/different account. Your worksheet should
resemble something like the next slide.

Steps (Continued)
In cell D6, insert a VLOOKUP Function to have Excel
search the ATB Manual Worksheet for the amount that
corresponds to the account number. [Enter:
=VLOOKUP(A6,...)]
After the cell containing the account number, select the
ATB Manual Worksheet and highlight the range
A6:D150, then enter a comma. Enter 3 for column index
and type False for Range Lookup. [The formula in cell D6
should read: =VLOOKUP(A6, 'ATB 1'!A4:D149,3,FALSE)]
In the Table Array portion of the VLOOKUP function, add a
$ after every letter/number in the range. The formula in
cell D6 should read: =VLOOKUP(A6,'ATB 1'!
$A$4:$D$149,3,TRUE).

Steps (Continued)
Create totals for each account using the
SUM Function (Cells: D12, D20, D28, D31,
D38, D47, etc).
Use the AutoSum function on cell D201 to
determine the sum of the adjusted trial
balance.
The Grand Total must match the
Grand Total listed in the original
Adjusted Trial Balance. IT MUST
EQUAL 0!

Your worksheet should resemble the


image below.

Creating an Income
Statement
TheIncome Statementor profit
and loss account is one of the
financial statementsof a company
and shows the company's revenues
and expenses during a particular
period.
We will now learn how to create an
Income Statement using Excel.

Steps
Create a new worksheet (worksheet 4).
Name the worksheet Income Statement.
Enter: Dress Right Clothing Corporation in
cell A1.
Enter: Income Statement in cell A2.
Enter: For the Month of July 2011 in cell A3.
Highlight the range A1:D1, then select
Merge and Center in the Alignment
ribbon. Repeat the process with A2:D2 and
A3:D3.

Steps (Continued)
Type: Sales Revenue in Cell A5, Cost of Goods Sold in
cell A6, Gross Profit in cell A7, Operating Expense in
cell A9, Operating Income in cell A16, Other Income
(expense) in cell A17 and Net Income in cell A20.
Add 4 spaces before typing the following into their
respective cells: Salaries in cell A10, Supplies in cell
A11, Rent in cell A12, Depreciation in cell A13, Bad
Debt in cell A14, Rent Expense in cell A18 and Interest
Revenue in cell A19.
Highlight cells C6, B14 and C14, B19 and C19. Right click
the cells and select Format Cells. Select the border Tab,
and then add a single border to the bottom of the cell.
Add a double line border (under style) to cell C20.

Steps (Continued)
Copy the numbers for each account in the Income
Statement by double clicking each cell, selecting the
Groups Worksheet and selecting the total for each
account listed in the Groups worksheet.
Ex: To enter the data for Sales Revenue, double click
cell C5, then select the Groups Worksheet (to make it
active). On the Groups Worksheet, select cell D125 and
press Enter. The formula in cell C6 on the Income
Statement should be: =Groups!D125. Since sales
revenue cannot be a negative value, type =abs(
before Groups!D125 to have Excel give the absolute
value of the cell. The Formula in C6 should now read:
=abs(Groups!D125).

Steps (Continued)
Note: Cells C7, C15, C16 and C20 should be blank at this time.
The formula for Gross Profit (in this scenario) is equal to Sales
Revenue Cost of Goods Sold. Add a formula to cell C7 to reflect
that equation.
Use the Sum function in cell A15 to add the accounts listed as
Operating Expenses (Salaries, Supplies, Rent, Depreciation and Bad
Debt Expense).
The formula for Operating Income is equal to Gross Profit Total
Operating Expenses. The formula in cell C16 should reflect this
formula (C7-C15)
Net Income is equal to the Operating Income + Any Additional
Revenue Any Additional Expenses. Therefore, the formula in cell
C20 should reflect this formula (C16+C18-C19)
Highlight the range C5:C20. Right click the cells and select Format
Cells. Under the Categories, select Currency. Set the Decimal Places
to 0, set the Symbol to $ and select the fourth option (1234) under
Negative Numbers.

A completed Income Statement for this


exercise.

Congratulations, you have now created a sample


income statement! You are now well on your way to
creating the last two financial statements.

Creating a Statement of
Stockholders Equity
The Statement of Stockholders
Equity is thefinancial statementthat
details changes to the equity portion of
thebalance sheet, including retained
earnings, common and preferred shares
(as well as treasury stock), and other
comprehensive income.
We will now prepare a sample Statement
of Stockholders Equity in Excel.

Steps
Create a new worksheet (worksheet 4). Name
the worksheet Statement of Shareholders
Equity.
Enter: Dress Right Clothing Corporation in cell
A1.
Enter: Statement of Shareholders Equity in cell
A2.
Enter: For the Month of July 2011 in cell A3.
Type Common Stock in cell A5, Retained
Earnings in Cell D5,and Total Shareholders
Equity in cell F5.

Steps (Continued)
Type Balance at July 1, 2011 in cell A6, Issue of Common Stock in
cell A7, Net Income for July 2011 in cell A8, Less: Dividends in cell A9,
and Balance at July 31, 2011 in cell A10.
Highlight cells C9 and D9. Right click the cells and select Format Cells.
Select the border Tab, and then add a single border to the bottom of the
cell. Add a double line border (under style) to cells B10, C10 and D10.
In this scenario, no common stock was issued at July 1, 2011 and no
dividends were paid during the period. Enter 0 in cells B6, B9 and
F9.
For the Issue of Common Stock and Retained Earnings Balance at July 1,
2011, use the data in the Groups worksheet to give you a value.
Ex: To enter the data for Issue of Common Stock, double click cell B7,
then select the Groups Worksheet (to make it active). On the Groups
Worksheet, select cell D113 and press Enter. The formula in cell B7 on
the Income Statement should be: =Groups!D113. Since common
stock cannot be a negative value, type =abs( before Groups!D113 to
have Excel give the absolute value of the cell. The Formula in C6 should
now read: =abs(Groups!D113).

Steps (Continued)
The value for Net Income under Retained
Earnings MUST be taken from the
corresponding cell in the INCOME
STATEMENT!
Use the AutoSum tool to generate the Balance
at July 31, 2011 for cells B10, C10 and D10.
Note: Cells C8, D7 and D9 should be blank!
The finished Statement of Shareholders Equity
should match the image in the next slide.

Creating a Balance Sheet


The Balance Sheet is a summary of
the financial balances of abusiness
organization are listed as of a
specific date, such as the end of
itsfinancial year or the end of a
period.
We will now prepare a sample
Balance Sheet in Excel.

Steps
Create a new worksheet and rename
it: Balance Sheet. Make the Balance
Sheet the active worksheet.
Enter the appropriate text in cell to
match the image in the next slide.

Steps (Continued)
Highlight the range C7:D32. Right click the cells and
select Format Cells. Under the Categories, select
Numbers. Set the Decimal Places to 0, and select
the fourth option (1234) under Negative Numbers.
Highlight cells C10, D13, C17, D17, D24, C29, D31.
Right click the cells and select Format Cells. Select
the border Tab, and then add a single border to the
bottom of the cell. Add a double line border (under
style) in cell D32.
Once again, use the data from the Groups
Worksheet to fill the values in column D (Cells D:
7-8, 11-13, 21-24, and 27).

Steps (Continued)
Follow the same procedure with cells C9-10 and C16-17.
The accounts in these cells contain an amount debited and
an amount credited; therefore, the amount credited must be
subtracted from the amount debited. Use the Sum
function in cells D10 and D17 to find the correct amount
debited.
Use the data from the Statement of Shareholders Equity to
find the values for cell C29 and C30. Use the Sum function
in cell D31 to find the Total Shareholders Equity.
Total Liabilities and Shareholders Equity is equal to
Total Shareholders Equity + Current Liabilities +
Long Term Liabilities. In cell D32, add the numbers in
cells D25, D31 and D27 to calculate Total Liabilities and
Shareholders Equity.

The finished Balance Sheet should match the image below:

The End
Now that you know how to prepare
the financial statements using Excel,
youll be ready to face the world of
business!
Go forward and dont forget to
practice!

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