AC312 Project 4
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This project should be
completed using Excel (with formulas and linked data). Below are the
deliverables:
1. Prepare a
Multi-Step Income Statement for the year ended 2016. This statement should be
flexibly designed (formulas in cells). To the right of your dollars in this
statement, show common-sized percentages based on sales (vertical analysis).
2. Show journal
entries, adjusting entries and closing entries for the below additional
information…none of the journal entries for 2016 have been posted to the
ledger.
1. Prepare a Statement of
Retained Earnings for the year ended 2016. This statement should be flexibly
designed.
2. Prepare a Classified
Balance Sheet dated Dec. 31, 2016. Again, a flexible design is required so any
changes will automatically update the balance sheet.
3. Prepare a Statement of
Cash Flows using the indirect method for the year ended 2016. The Statement of
Cash Flows (operating section) should automatically change when assumptions are
changed.
Your Name, Inc.
Balance Sheet
12/31/2015
Current Assets
Cash $18,000
Marketable Securities
(Short-term) 2,000
Accounts Receivable
14,000
Allowance for Bad Debt
(2,000)
Inventory 15,000
Prepaid Insurance 5,000
Total Current Assets
$52,000
Property, Plant, and
Equipment
Land $30,000
Building 150,000
Accumulated Dep. –
Building (45,000)
Equipment 100,000
Accumulated Dep. - Equipment (20,000)
Total PPE $215,000
Total Assets $267,000
Current Liabilities
Accounts Payable
$9,000
Unearned Revenue 3,000
Income Taxes Payable 3,000
Total Current
Liabilities $15,000
Long-term Liabilities
Bonds, 10%, due in
2020 $100,000
Equity
Common Stock $ 50,000
(100,000 authorized,
50,000 issued) cont.
Additional Pd.-in
Capital 80,000
Retained Earnings not given (must be calc.)
Total Equity $152,000
Total Liabilities
& Equity $267,000
Additional Information
(for all entries):
1. Sales for 2016 are $250,000.
All sales are on credit.
2. Gross Margin/Profit
ratio is 40 percent
3. Accounts Receivable:
i. $180,000 of the
accounts receivable is paid by the end of the year (the remaining balance
remains on the balance sheet).
ii. $3,000 of A/R is
written off during the year.
iii. 5% of Accounts
Receivable (after write-off and collections) is considered to be uncollectible.
1. Inventory:
i. Inventory purchases
is $175,000, all on credit.
ii. All accounts
payable is from inventory purchases; all but $12,000 of inventory purchased is
paid by the end of the year.
1. Additional equipment is
purchased on 4/1/16 for $20,000 cash. All equipment when new, including the new
purchase, has/had a five year life, no salvage value, and is depreciated using
the straight-line method.
2. The building depreciates
at $5,000 per year.
3. Half of the marketable
securities were sold for $1,300. The FMV of the other half of the securities is
also $1,300 and an adjustment to FMV is required.
4. Salaries are $2,100 per
month (12 months of salaries expense must be booked). It is expected that
one-half month will be owed on 12/31/16 because of when payday falls
(therefore, 11.5 months of salaries have been paid and ½ month is still owed to
the employees at year end).
5. $60,000 in cash is
borrowed on 10/31/16 by issuing a Note Payable. Interest is 8% per year.
6. The bonds were sold at
face value last December and pay interest on Dec. 31, 2016.
7. 10,000 additional shares
of stock were sold for $4 a share.
8. Insurance costing
$20,000 was purchased on 7/1/16 (the same time in which the policy purchased in
2015 expired. The new policy was for 12 months).
9. On Dec. 31, 1000 shares
of stock are repurchased from the market at $2.80/share (treasury stock).
10. The tax rate is 30
percent. Income taxes for the current year are due and therefore paid during
the first two months of the next year (you will have complete an entry to pay
the 2015 taxes, however the 2016 taxes will not be paid until the end of
January 2017).
11. Dividends of $4,000 were
paid during 2016.
12. The unearned revenue has
been earned during the year (classified as other revenue on the multi-step
income stmt.).
Required Labeled
Sheets (all statements should be for 2016):
1. Data Sheet
2. Entries: Basic and
Adjusting (you do not have to separate these entries)
3. Adjusted Trial Balance
for 2016 (includes the posted amounts of all entries and adjusting entries)
4. Multi-step Income
Statement
5. Retained Earnings
Statement
6. Classified Balance Sheet
7. Cash Flow Statement
(using the indirect method)
8. Post-Close Trial Balance
for 2016 (include closing entries above the post close trial balance)
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