PART III: Normalization and Adjustment of Financial Statements

1. Understand the accounting policies of your company for potential normalization and adjusting.  Determine if adjustments are necessary for items discussed in lectures and provided on the Normalization and Adjustment Listing.  Make sure when deciding on adjustments to consider the Materiality concept.

2. Prepare a document for the adjustments you have determined that details the adjustment, including the debits and credits and proper accounts that will be adjusted.  Give a brief explanation of the reasoning behind the adjustments you have included and any assumptions used to come up with the accounts and amounts.  You must make adjustments to all three years of your forecasted financial statements.

3. Create a new set of adjusted financial statements that reflect the adjusting entries you determined.  You must show adjustment for all three years of your forecasted financials.