Question

ACC 3010

Project 2

Winter 2018

This project will be submitted in 3 parts. The submission dates and Required parts to be completed for each submission are:

Submission 1 (9 points) - due Saturday February 24 before 5pm - You must submit your completed October Journal entries, your completed Inventory Cards for all 3 Inventory costing methods, and the Worksheet complete through the Trial Balance. Your file must be named correctly - "Your name (first and last) Project 2 part 1. Failure to name your file correctly will result in a 1 point deduction

Submission 2 (6 points) - due Saturday March 3 before 5pm - You must submit your completed Adjusting Journal Entries, the worksheet with the Trial Balance and adjustments and Adjusted Trial Balance Columns completed, and the Worksheet formulas tab completed. Your file must be named correctly - "Your name (first and last) Project 2 part 2. Failure to name your file correctly will result in a 1 point deduction

Submission 3 (15 points) - due Saturday March 10 before 5pm - You must submit your total excel file which must include all Journal entries, trial balances, the worksheet and the financial statements and formulas to the correct assignments link on the class Canvas site. Your file must be named correctly - "Your name (first and last) Project 2 part 3. Failure to name your file correctly will result in a 1 point deduction

Because you will need to complete Part 1 to be able to complete Part 2 and complete Parts 1 & 2 to complete Part 3 you may earn partial credit for a Part of the Project that you did NOT submit in a timely fashion when you submit the subsequent part of the project.

For example, if you do not complete and submit Part 1 of the project by the due date you will lose the 9 points alloccated to that part of the project. If you complete that part of the project and submit it along with your completed Part 2 of the project in a timely manner, you may earn up to 4.5 points partial credit for part 1.

NAME

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This project is a continuation of Project 1, NFT Consulting Inc.   An additional 11 months have passed since Project 1 (we are now at October 31, 2018 the company’s year end). The friends have expanded the shop to include sales of widgets as well as the consulting services activities. The new company name is NFT Consulting and Sales Inc. All transactions for the company through the end of the year have been posted to the accounts EXCEPT FOR those relating to the purchasing and sales of widgets in October. You will be recording and posting those entries. Additionally, all adjustments have been made EXCEPT for those related to accounting for bad debts and any inventory and cost of goods sold issues. You will be adding that information. You will then be preparing the year end financial statements for the company. The following is a suggested series of steps for completing the project:

1.    Complete the Perpetual Inventory card worksheets to reflect the October purchases and sales under the 3 different Inventory costing methods. For the weighted average computations, round unit cost to the nearest penny and total cost to the nearest dollar.

2.    Complete the October Journal Entries to reflect the purchases and sales transactions (company uses the perpetual method) under the FIFO costing method and post.

3.     Post the October entries to the worksheet columns for the October entries and complete the Trial Balance columns of the Worksheet.

4.    Review the aging of accounts receivable included with the project and the current balance in the Allowance Account (see worksheet) to determine the adjustment needed for Bad Debts. Any journal entry necessary should be included with your adjusting journal entries.

5.    Prepare any necessary adjusting entries to reflect the Inventory count at year end. These should be included on the journal entries sheet.

6.   Post the adjusting entries to the worksheet and complete the Adjusted Trial Balance.

8.    Prepare the 3 financial statements for the year ended October 31, 2017 (multi step income statement, classified balance sheet, and statement of retained earnings). Also you must include appropriate dollar signs and appropriate underlines and correct formatting for the statements to receive full credit.

9.    Copy the Inventory Cards from the Inventory Cards tab to the Inventory Cards formulas tab, The Worksheet from the Worksheet tab to the Worksheet formulas tab and the Financial Statements from the Financial Statements tab to the Financial Statements formulas tab. Highlight the entire inventory cards/worksheet/financial statements area respecively and press the "ctrl" key and the "~" key. This will cause the formulas used to display instead of the numbers. Save your file with the formulas displayed.

10.       Each student must submit an ORIGINAL excel file to the assignment link in Canvas. While students are encouraged to work together, each student must process and format his/her own set of statements. Duplicate submissions (format, not numbers) will result in the students receiving a 0 for the assignment. Just changing the font size or orientation/placement is not really an "original effort".

11.        Make sure that your columns are wide enough so that the numbers are displayed (not #####) when you submit your. If numbers do not display this will result in a deduction.

This project will be submitted in 3 parts. The submission dates and Required parts to be completed for each submission are indicated below.

Submissions will NOT be accepted via email attachment. Submission to other than the correct link on Canvas will result in a 5 point deduction.

NO LATE SUBMISSIONS WILL BE ACCEPTED.

Submission 1 - due Saturday February 24 before 5pm - You must submit your completed October Journal entries, your completed Inventory Cards for all 3 Inventory costing methods, and the Worksheet complete through the Trial Balance. Your file must be named correctly - "Your name (first and last) Project 2 part 1. Failure to name your file correctly will result in a 1 point deduction Inventory Information Inventory on hand at the beginning of October: Units Cost / unit Total Cost Purchase # 1 15 60 $900 Purchase # 2 25 70 1,750 40 $2,650 October 2018 transactions related to buying and selling widget inventory 1-Oct Sold 30 widgets at $125 each on credit 3-Oct Purchased 60 widgets at a cost of $80 per widget on credit 10-Oct Sold 45 widgets at $150 each on credit 20-Oct Purchased 40 widgets at a cost of $85 per widget on credit 24-Oct Sold 35 widgets at $165 each on credit The PHYSICAL count of widget inventory on hand at October 31, 2018 shows 23 widgets at a FIFO cost of $1,955. Beginning Inventory Units Cost / unit Cost 15         60             900 25 70          1,750 40          2,650 LIFO Purchases Cost of Goods Sold Inventory on Hand Unit Total   Unit Total   Unit Total   Date Quantity Cost Cost   Quantity Cost Cost   Quantity Cost Cost   Beg inv 15              60                    900 15               60                900 25 70                 1,750 25 70            1,750 40            2,650

Answer 1

Date	General Journal	Debit in $	Credit in $
1-Oct	Accounts Receivable	3,750
	Sales Revenue		3,750
	( 30 Widgets sold at the rate of $125 each)
	Cost of goods sold (W.N 1)	1,950
	Inventory		1,950
	( Cost of goods sold of 30 widgets sold)
3- Oct	Inventory	4,800
	Accounts Payable		4,800
	( Purchase 60 widgets at a cost of $80 per widget)
10-Oct	Accounts Receivable	6,750
	Sales Revenue		6,750
	(45 Widgets sold at the rate of $150 each)
	Cost of goods sold (W.N 2)	3,500
	Inventory		3,500
	(Cost of goods sold of 45 widgets sold)
20-Oct	Inventory	3,400
	Accounts Payable		3,400
	(Purchase 40 widgets at a cost of $85 per widget)
24- Oct	Accounts Receivable	5,775
	Sales Revenue		5,775
	(35 Widgets sold at the rate of $165 each)
	Cost of goods sold (W.N 3)	2,850
	Inventory		2,850
	(Cost of goods sold of 35 widgets sold)
31- Oct	Loss of Inventory (W.N 4)	595
	Inventory		595
	(Recording loss of stock of 7 units @85 each)

Working Notes (W.N):

1. Cost of goods sold of 30 widgets sold on 1-oct

Under FIFO method First In will be sold out first then next purchases

	Quantity	Rate	Total Cost
Purchase 1	15	60	900
Purchase 2	15	70	1,050
Total	30		1,950

2. Cost of goods sold of 45 widgets sold on 10-oct

	Quantity	Rate	Total Cost
Purchase 2	25
Less: Quantity sold on 1-oct	15
Remaining Quantity of purchase 2	10	70	700
Quantity purchased on 3-Oct	35	80	2,800
Total	45		3,500

3. Cost of goods sold of 35 widgets sold on 24-Oct

	Quantity	Rate	Total Cost
Purchase on 3-oct	60
Less: Quantity sold on 10-oct	35
Remaining Quantity of purchase 2	25	80	2,000
Quantity purchased on 20-Oct	10	85	850
Total	35		2,850

4. Stock on hand is 23 widgets at cost of 1,955

	In		Out		Balance
	Units	Price per Unit	Units	Price per Unit	Units	Price per Unit
Beginning	15	60
	25	70
1-Oct			15	60
			15	70	10	70
3-Oct	60	80			10	70
					60	80
10-Oct			10	70
			35	80	25	80
20-Oct	40	85			25	80
					40	85
24-Oct			25	80
			10	85	30	85
Closing Stock					23	85
Loss					7	85

Closing Stock rate per unit = 1,955/23= $85

Loss of units = (Balance on 24^th – Closing Stock) = (30-23) = 7 units

Inventory Card as per LIFO Method

Beginning Inventory	Units	Cost/Unit	Cost
	15	60	900
	25	70	1,750
	40		2,650
LIFO
	Purchase			Cost of goods sold			Inventory on Hand
		Unit	Total		Unit	Total		Unit	Total
Date	Qty	Cost	Cost	Qty	Cost	Cost	Qty	Cost	Cost
Beg inv	15	60	900				15	60	900
	25	70	1,750				25	70	1,750
1-Oct				25	70	1,750	10	60	600
				5	60	300
3-Oct	60	80	4,800				10	60	600
							60	80	4,800
10-Oct				45	80	3,600	10	60	600
							15	80	1,200
20-Oct	40	85	3,400				10	60	600
							15	80	1,200
							40	85	3,400
24-Oct				35	85	2,975	10	60	600
							15	80	1,200
							5	85	425
Balance as on 24-Oct							30		2,225
Loss of stock				5	85	425	10	60	600
				2	80	160	13	80	1,040

Closing stock in 23 units that means 7 lost and lost will be from last in first out 5 @ 85 and 2@80

Journal Entries under LIFO method

Date	General Journal	Debit in $	Credit in $
1-Oct	Accounts Receivable	3,750
	Sales Revenue		3,750
	( 30 Widgets sold at the rate of $125 each)
	Cost of goods sold	2,050
	Inventory		2,050
	( Cost of goods sold of 30 widgets sold)
3- Oct	Inventory	4,800
	Accounts Payable		4,800
	( Purchase 60 widgets at a cost of $80 per widget)
10-Oct	Accounts Receivable	6,750
	Sales Revenue		6,750
	(45 Widgets sold at the rate of $150 each)
	Cost of goods sold	3,600
	Inventory		3,600
	(Cost of goods sold of 45 widgets sold)
20-Oct	Inventory	3,400
	Accounts Payable		3,400
	(Purchase 40 widgets at a cost of $85 per widget)
24- Oct	Accounts Receivable	5,775
	Sales Revenue		5,775
	(35 Widgets sold at the rate of $165 each)
	Cost of goods sold	2,975
	Inventory		2,975
	(Cost of goods sold of 35 widgets sold)
31- Oct	Loss of Inventory	585
	Inventory		585
	(Recording loss of stock of 7 units )

Inventory Card as per Weighted Average Method

Beginning Inventory	Units	Cost/Unit	Cost
	15	60	900
	25	70	1,750
	40	66.25	2,650
Weighted Average
	Purchase			Cost of goods sold			Inventory on Hand
		Unit	Total		Unit	Total		Unit	Total
Date	Qty	Cost	Cost	Qty	Cost	Cost	Qty	Cost	Cost
Beg inv	40	66.25	2,650				40	66.25	2,650
1-Oct				30	66.25	1987.50	10	66.25	662.50
3-Oct	60	80	4,800				70	78.04	5462.50
10-Oct				45	78.04	3511.61	25	78.04	1950.89
20-Oct	40	85	3,400				65	82.32	5,350.89
24-Oct				35	82.32	2,881.25	30	82.32	2,469.64
Loss of Stock				7	82.32	576.25	23	82.32	1893.39

Under Weighted Average Method the Unit price of stock is total value of stock in hands divided by total units in hand