Question

In: Accounting

WALNUT GROVE TRIAL BALANCE For the Years Ended December 31, 2019 and December 31, 2020 2019...

WALNUT GROVE
TRIAL BALANCE
For the Years Ended December 31, 2019 and December 31, 2020
2019 2020
Debit Credit Debit Credit
Cash          185,500
Accounts Receivable          125,600
Inventory             55,000
Prepaid Expenses                            -
Building          275,000
Computers & Software             10,000
Furniture & Fixtures             25,000
Land             75,000
Machinery & Equipment                            -
Accumulated Depreciation             15,385
Accounts Payable             48,500
Payroll Tax Payable                1,050
Sales Tax Payable                7,913
Unearned Revenue                            -
Line of Credit          300,000
Notes Payable                            -
Peters, J., Capital                2,500
Peters, M., Capital                2,500
Retained Earnings          258,429
Custom Cabinet Sales                            -
Material & Supplies Sales          282,714
Small Tool Sales             34,932
Tool Rental Revenue             12,648
Vendor Compensation Revenue                     629
COGS: Custom Cabinets                            -
COGS: Material & Supplies             90,468
COGS: Small Tools             21,309
COGS: Wages             33,060
Depreciation Expense                8,775
Insurance Expense                6,300
Office Supplies Expense                1,435
Payroll Tax Expense                5,950
Postage Expense                     340
Small Tool Expense                6,041
Interest Expense             11,900
Income Tax Expense             30,522
         967,200          967,200

Using the 2019 trial balance and additional information below, prepare the projected (2020) financial statements for Walnut Grove. The prior year data (provided) is the starting point for your projections, and then each of the assumptions listed below will also be used.

Prepare an Excel workbook which contains the following information:

  • Tab 1: 2019 Trial Balance (provided in this document)

  • Tab 2: 2020 Projected Income Statement

  • Tab 3: 2020 Projected Balance Sheet

  • Tab 4: 2020 Projected Statement of Cash Flows Assumptions:

  1. Sales will change as follows:

    1. Material & Supplies Sales will increase 8.5%

    2. Small Tool Sales will increase 10%

    3. Tool Rental Revenue will continue throughout the 2020 year. An average of 20

      tools will be rented each week. The weekly rental per tool is $60. Assume that

      the average number of tools given will be rented for all 52 weeks.

  2. Vendor Compensation will increase consistently with the sum increase of Material &

    Supplies Sales and Small Tools Sales.

  3. Cost of sales for materials and supplies and small tools will increase proportionately based

    on their current percentage of sales, respectively. (HINT: You will need to use vertical

    analysis.)

  4. Small tools, including blades and other items, is expected to total $8,000 in 2020.

  5. Office supplies and postage are expected to increase by 35% during 2020.

  6. On January 1st, the company will invest $135,000 in new equipment for its custom cabinet

    division.
    a. This equipment will have a 5-year life and should be depreciated using the

    straight-line method. This purchase represents the only expected change to property, plant, and equipment.

b. The company will finance the equipment purchased with a 5 year note at 3.65% interest. You will need to use an amortization schedule to find the principle and interest payment amounts. The loan is paid monthly.

7. In relation to #6 above, the custom cabinet sales division begins operations in 2020. The following assumptions must be used to project the impact on the financial statements. (Hint: You may need to add accounts to the trial balance.)

  1. Walnut Grove anticipates that it will sell 110 cabinets at an average selling price of $2,700.

  2. Direct materials per cabinet are $850 per unit.

  3. The direct labor per cabinet is 5 hours, and Walnut Grove pays $30.00/hour for

    this labor.

  4. Factory overhead is calculated at 65% of direct labor.

  1. The building is being depreciated over a 39-year life.

  2. Because of the new cabinet division, yearly insurance costs will increase by $29,500,

    effective January 1. The company prepaid 2 years of this insurance and received a 5%

    discount for the 2-year prepayment.

  3. On January 1, a new cabinet division manager will be hired at a cost of $55,500. In

    additional to the new cabinet division manager, 3 new employees will be hired at an average wage of $18.50 per hour, employees work an average of 40 hours per week. Payroll taxes should be calculated at 20% of wages.

  4. With 22 weeks remaining in the year, 3 additional employees will be hired at a rate of $16.50 per hour, based on an average of 36 hours per week.

  5. The income tax rate is 21%.

  6. At the end of the year, Walnut Grove will have $68,000 in ending inventory.

  7. In relation #13, purchases are made evenly throughout the year and are paid in full in the

    month following purchase.

  8. Sales are collected in full the month following the sale. During the month of December,

    invoiced sales totaled $142,500.

  9. The sales tax rate is 6.3%.

  10. At the end of the year, Walnut Grove has received full payment for 25 custom cabinet

    orders that will be completed in January 2021.

Solutions

Expert Solution

Trial Balance 2019
Particulars Debit Credit
Cash $        185,500
Accounts Recievable $        125,600
Invetory $          55,000
Prepaid Expenses $                   -  
Building $        275,000
Computer and Software $          10,000
Furniture and Fixture $          25,000
Land $          75,000
Accumulated Depreciation $    15,385
Accounts Payable $    48,500
Payroll Tax Payable $      1,050
Sales Tax Payable $      7,913
Unearned Revenue $             -  
Line of Credit $ 300,000
Notes Payable $             -  
Peter J Capital $      2,500
Peter M Capital $      2,500
Retained Earnings $ 258,429
Custom Cabinet Sales $             -  
Material and Supplies Sales $ 282,714
Small Tool Sales $    34,932
Tool Rental Revenue $    12,648
Vendor Compensation Revenue $          629
COGS: Material and Supplies $          90,468
COGS: Custom Cabinets $                   -  
COGS : Small Tools $          21,309
COGS : Wages $          33,060
Depreciation Expenses $            8,775
Insurance Expense $            6,300
Office Supplies Expense $            1,435
Payroll Tax Expense $            5,950
Postage Expense $                340
Small Tool Expense $            6,041
Interest Expense $          11,900
Income Tax Expense $          30,522
Total $        967,200 $ 967,200
Projected Income Statement 2020
Particulars Amount Amount
Sales
Custom Cabinet Sales $        297,000
Material and Supplies Sales $        306,745
Small Tool Sales $          38,425
Tool Rental Revenue $          62,400
Vendor Compensation Revenue $                684 $ 705,254
COGS :
COGS: Material and Supplies $          98,158
COGS: Custom Cabinets $          93,500
COGS : Small Tools $          23,439
COGS : Wages $          16,500
Other Factory OH $          10,725 $ 242,323
EBITDA $ 462,931
Depreciation Expenses $          34,052
Interest Expenses $          16,828 $    50,880
Other Operational Expenses
Insurance Expense $          34,010
Office Supplies Expense $            1,937
Payroll Tax Expense $          42,029
Postage Expense $                459
Small Tool Expense $            8,000
Salaries and Wages $        210,144 $ 296,579
Profit Before Tax $ 115,473
Income Tax $    24,249
Retained Earnings $    91,223
Projected Balance Sheet 2020
Particulars Amount Amount
Assets
Cash $          13,347
Accounts Recievable
ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

The Trial Balance section of the worksheet for ContemporaryFashions for the period ended December 31,...
The Trial Balance section of the worksheet for Contemporary Fashions for the period ended December 31, 2019, appears below. Adjustments data are also given.ADJUSTMENTSSupplies used, $3,600Expired insurance, $2,400Depreciation expense for machinery, $1,200Required:Complete the worksheet.Prepare an income statement.Prepare a statement of owner’s equity.Prepare a balance sheet. (Be sure to list the accounts in order of their liquidity.)Journalize the adjusting entries in the general journal.Journalize the closing entries in the general journal.Prepare a postclosing trial balance.Analyze: If the adjusting entry for expired...
The adjusted trial balance of Monona Inc. as of December 31, 2020, follows. Adjusted Trial Balance...
The adjusted trial balance of Monona Inc. as of December 31, 2020, follows. Adjusted Trial Balance December 31, 2020 Acct. No. Account Debit Credit 100 Cash $18,000 $ 104 Accounts receivable 35,000 105 Allowance for doubtful accounts 1,775 106 Inventory 40,000 108 Prepaid insurance 2,400 150 Land 5,725 155 Building 100,000 156 Equipment 30,000 162 Accumulated depreciation 6,250 202 Accounts payable 37,500 204 Salaries payable 2,250 208 Deferred service revenue 1,000 210 Interest payable 250 240 Note payable 75,000 302...
Example Company Balance Sheet December 31, 2019 and 2020 Example Company Income Statment For Year Ended...
Example Company Balance Sheet December 31, 2019 and 2020 Example Company Income Statment For Year Ended December 31, 2020 2019 2020 2020 Assets    Sales 873,252 Current Assets Cost of Goods Sold 192,075 Cash 976 233 Gross Margin 681,177 Accounts Recievable 890 278 Allowance for Doubtful Accounts (155) (40) EXPENSES Investment in Bonds 1 171 Bad Debt 328 Inventories 285 540 Depreciation 66,337 Prepaid expenses 153 32 Other 608,253 Interest Receivable 930 216 TOTAL EXPENSES 674,918 Total Current Assets 3,080...
Galarus company had the following trial balance as of December 31, 2019 Galarus Company Trial Balance...
Galarus company had the following trial balance as of December 31, 2019 Galarus Company Trial Balance December 31, 2019 Accounts Debit Credit 10,600 Accounts receivable 13,200 Supplies 2,400 Prepaid Insurance 1,500 Equipment 38,500 Accumulated depreciation - Equipment 8,300 Accounts payable 2,500 Unearned service revenue 8,900 Common stock 15,000 Retained earnings 10,100 Service revenue 35,000 Salary expense 11,200 Advertising expense 2,400 79,800 79,800 Additional information: Supplies used during the month, $450 Prepaid insurance expired during the month, $300 Depreciation on equipment...
unadjusted trial balance of jasa trading bhd at 31 december 2019
unadjusted trial balance of jasa trading bhd at 31 december 2019
Gaze Co. Adjusted Trial Balance at 31 December 2019                                  &nbs
Gaze Co. Adjusted Trial Balance at 31 December 2019                                                                                 Debit                        Credit                          Cash                                                                        € 51,402                            Accounts receivable                                                 2,400                                 Office supplies                                                         600                                    Prepaid rent                                                             1,440                                 Office equipment                                                     64,800                               Accumulated depreciation: office equipment                                        € 42,300 Accounts payable                                                                                      1,680 Interest payable                                                                                           432 Income taxes payable                                                                               2,100 Unearned revenue                                                                                  10,800 Capital stock                                                                                           36,000 Retained earnings                                                                                     9,600 Dividends                                                               1,200                                 Consulting services revenue                                                                   72,000 Office supplies expense                                           726                                    Depreciation expense: office equipment                  9,900                                 Rent expense                                                          1,212                                 Salaries expense                                                     32,520                               Interest expense                                                      432                                    Income taxes...
The Trial Balance section of the worksheet for Contemporary Fashions for the period ended December 31,...
The Trial Balance section of the worksheet for Contemporary Fashions for the period ended December 31, 2019, appears below. Adjustments data are also given. ADJUSTMENTS Supplies used, $3,600 Expired insurance, $2,400 Depreciation expense for machinery, $1,200 Required: Complete the worksheet. Prepare an income statement. Prepare a statement of owner’s equity. Prepare a balance sheet. Journalize the adjusting entries in the general journal. Journalize the closing entries in the general journal. Prepare a postclosing trial balance. Analyze: If the adjusting entry...
Simmons Corp Balance Sheet As of December 31, 2019 and June 30, 2020 Assets 2019 2020...
Simmons Corp Balance Sheet As of December 31, 2019 and June 30, 2020 Assets 2019 2020 Liabilities 2019 2020 Cash $700 Accounts payable $550 Accounts receivable 50 Salaries payable 50 Total current assets 750 Interest payable 0 Equipment 500 Total current liabs 600 Acc. depreciation (100) Notes payable 100 Equity Common stock 100 Retained earnings 350 Total assets $1,150 Total liabs and eq $1,150 During 2020 to date (June 30, 2020), Simmons had the following transactions: Provided services to customers...
The adjusted trial balance for Cowboy Company follows: Cowboy Company Adjusted Trial Balance December 31, 2019...
The adjusted trial balance for Cowboy Company follows: Cowboy Company Adjusted Trial Balance December 31, 2019 ACCOUNT NAME DEBIT CREDIT Cash       101,100 Accounts Receivable           5,000 Prepaid Rent           2,200 Building       120,000 Accumulated Depreciation - Building         80,000 Accounts Payable           3,000 Salaries Payable           5,600 Interest Payable           4,500 Unearned Revenue           9,500 Notes Payable         50,000 Cowboy, Capital         70,000 Cowboy, Withdrawals         30,000 Fees Earned       115,000 Wages Expense         40,000 Rent Expense         26,400...
Following is the unadjusted trial balance of Ben’s Jewelers on December 31, 2019. BEN’S JEWELERS Trial...
Following is the unadjusted trial balance of Ben’s Jewelers on December 31, 2019. BEN’S JEWELERS Trial Balance December 31, 2019 Cash $ 13,050 Dr. Accounts Receivable 49,900 Dr. Allowance for Doubtful Accounts 2,000 Cr. Merchandise Inventory 105,900 Dr. Store Supplies 4,230 Dr. Office Supplies 2,950 Dr. Store Equipment 113,590 Dr. Accumulated Depreciation—Store Equipment 13,010 Cr. Office Equipment 27,640 Dr. Accumulated Depreciation—Office Equipment 4,930 Cr. Accounts Payable 4,390 Cr. Salaries Payable Social Security Tax Payable Medicare Tax Payable Federal Unemployment Tax...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT