Instructions:

**Must use formulas and link to cells throughout Excel file. Please name your project; i.e. Your Last Name_302 Project & Your Last Name_302 Memo. See Project Scoring Rubric for additional detail related to grading.

                        A. Record the journal entries for the December transactions.**Must show formulas in cells.

B. Record the adjusting journal entries for 12/31/18.**Must show formulas in cells.

                        C. Set up a worksheet using Excel to:

• Prepare the Unadjusted Trial Balance as of December 31, by making the December adjustments (separate columns). **Must link cells to journal entries.
• Enter the adjusting journal entries into worksheet (separate columns). **Must link cells to journal entries.
• Prepare the Adjusted Trial Balance as of December 31. **Use formulas.
• Complete the Income Statement and Balance Sheet columns of the worksheet. **Use formulas.

                        D. Prepare a multiple step income statement including calculation of weighted average shares and earnings per share. **Must link to worksheet.

                        E. Prepare a retained earnings statement. **Must link to worksheet.

                        F. Prepare a balance sheet (both years presented). **Must link to worksheet.

                        G. Prepare a cash flows statement. **Must link to comparative balance sheets and income statements.

                        H. Compute the following (**Must link to income statement and/or balance sheet):

• Current ratio
• Acid test ratio
• Debt to Equity
• Inventory Turnover
• Accounts Receivable Turnover
• At least 5 other ratios of your choosing

Using the memo format located in Microsoft Word, compile a memo incorporating the following information:   

• Based on the financial statements and ratios, describe the financial health of this company.
• Would you invest in this company? Why or why not? What would your advice be to the president of the company?
• Memo must include what other information would be helpful in making your decision.
• Memo will be graded based on content, correct grammar & spelling and the student’s ability to summarize financial data in a logical manner indicating the student’s general understanding of the financial data. See Rubric for additional details.

Record the following entries in general journal form for December, 2018:

December 1: Purchased Land for a future building site for $500,000, paying $100,000 down and signed a 5%, 90-day note for the balance.

December 3: Recorded sales on account of $45,000, 2/15, net 30. Cost of inventory was 23,500. JPJones using the net method for accounting for sales.

December 4: Bought back 5000 shares of stock for $20 per share.

December 4: Purchased 40,000 worth of equipment, 5 year life, $5,000 salvage value, for cash. Equipment will be depreciated using the straight-line method of depreciation.

December 5: Issued 5000 shares of restricted stock to its CFO. The stock has a fair value of $72,000. The service period related to this restricted stock is 3 years. Vesting occurs if the CFO stays with the company for 3 years. The par value of the stock is $1.

December 8: Purchased inventory of $44,000 on account and paid $30,000 on separate account.

December 15: Recorded cash sales of $24,000, cost of merchandise inventory was $14,900.

December 16: Issued 1,000 shares of common stock at $16.00 per share

December 17: Received payment related to sale on December 3.

December 20: Recorded sales on account of $113,000, cost of merchandise inventory was $75,000

December 24: Sold 2500 shares of Treasury Stock for $23 per share.

December 26: Wrote off 3,500 in bad debt.

Record the following adjusting entries in general journal form as of December 31, 2018:

1. Supplies on hand at the end of the year: $450
2. Equipment shown on the 12/1 TB was purchased on 1/1/17, has a 8 year life, no salvage value and company uses double-declining balance method for its depreciation.
3. Included in the truck balance is a fully depreciated truck for $6,500 and a new truck valued at $50,000 which was purchased on 1/1/17. The new truck has a 9-year life, no salvage value and the company uses the sum-of-the-years digits for its depreciation method on this asset.
4. The patent was purchased on 1/1/2013 for $100,000 and its useful life is 20 years.
5. $18,600 was paid on September 1, 2018 for six months rent
6. On 3/1/18, paid $22,500 for a 12-month insurance policy.
7. Declared dividends of $15,000 on December 31
8. The fair market value of the securities (classified as marketable) is $19,500.
9. 4% of Accounts Receivable is estimated to be uncollectible. Company uses the allowance method for estimating its uncollectible accounts.
10. Accrued salaries expense of $6,000 and recorded Payroll tax expense on account of $2300.
11. Had issued $200,000 of 6%, 10-year bond, dated 1/1/17 for $215,589 when the market rate was 5%. Interest is paid on June 30 and January 1 using the effective interest rate method. The June payment is included in the Dec. 1 TB. (Additional credit awarded if amortization table is included)
12. One month has passed since the issuance of restricted stock.
13. Interest on 30 days of note payable should be accrued. (Assume 360 days in a year for calculation)
14. Income tax rate is 25%

Additional Information:

During 2018, the following additional transactions occurred: (Hint: these are already included in 12/1/18 TB, but may be needed for the Statement of Cash Flows)

1. Issued 5,000 shares of common stock, $1 par, for $35,000 on June 30, 2018.
2. Some equipment was sold (original cost $10,000, book value $6,000) for $5,000 (do not consider in your #2 AJE)
3. All amortization and depreciation is recorded once a year on December 31.

Andrea purchased raw materials for her factory and received an invoice for $16,000 dated May 17, 2018, with terms 3/10, 2.3/15, n/30. She made a partial payment of $10,000 on June 1, 2018, and the balance on June 16, 2018. What was the total Andrea paid for the invoice?

The nut house sells almonds, cashews, and pistachios. They sold 10,000 cans last year. Pistachios outsold cashews by a margin of 2 to 1 in cans. sales of almonds were half the sales of cashews in cans. fixed costs for the nut house are 20,000 . almonds: unit sales Price:8.00 unit variable:4.00 cashews:unit sales price:10.00 unit variable:5.00 Pistachios: unit sales price:6.00 unit variable cost: 4.00 what is the breakeven sales volume and dollars for each nut rounded?

Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 75,000 units of product: net sales $1,500,000; total costs and expenses $1,620,000; and net loss $120,000. Costs and expenses consisted of the following.

Management is considering the following independent alternatives for 2020.
1.Increase unit selling price 25% with no change in costs and expenses.

2.Change the compensation of salespersons from fixed annual salaries totaling $205,000 to total salaries of $35,025 plus a 5% commission on net sales.

3.Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.

(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.)

(b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)

You have just been advised that your organization is opening an office in Québec. Describe the employer contributions that are specific to the province of Québec, their rates and thresholds where available. (Do not include the organization’s portion of the statutory deductions.)

(LO 3) A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table:

How much overhead will be assigned to Product B using activity-based costing?

The following data were drawn from the records of Benson Corporation.

1. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.
2. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
3. Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.
4. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
5. Calculate the predetermined overhead rate, assuming that Benson uses the number of units as the allocation base.
6. Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U).
7. Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U).

Nash Inc. began operations in January 2015 and reported the following results for each of its 3 years of operations.

2015 $ 260,000 net loss

2016 $ 37,000 net loss

2017 $ 819,000 net income

At December 31, 2017, Nash Inc. capital accounts were as follows.

7% cumulative preferred stock, par value $100; authorized, issued, and outstanding 4,700 shares $ 470,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 818,000 shares $ 818,000 Nash Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Nash began operations. The state law permits dividends only from retained earnings.

(a) Compute the book value of the common stock at December 31, 2017.

(b) Compute the book value of the common stock at December 31, 2017, assuming that the preferred stock has a liquidating value of $ 108 per share.

Umbrella Corporation maintains computer equipment and provides consulting services in 10 states and 15 countries. The corporation has a fleet of 4 Corporate jets and 3 Helicoptors and employs 6 full time pilots who receive salary and benefits. The most appropriate way to allocate the total cost of the corporate jets, helicopters, and pilots to individual user departments who travel worldwide to provide consulting service to clients would be:

a. number of employees in each department

b. number of trips taken by each department

c. number of miles flown by each department

d. sales revenue generated by each user department.

Comments:

- Can you explain why Answer C would be the correct answer? I would appreciate it.

- This is a created example that complies with Chegg's honor code.

enCo has the following securities in its investment portfolio on December 31, 2014. All these securities were purchased in 2014.

• 800 shares of Benson Inc. common shares, which cost $50,400 and had a fair value of $52,300 at the end of 2014. JenCo accounts for this investment as available for sale.
• 3,000 shares of Southgate Inc. common stock, which cost $174,000 and had a fair value of $204,000 at the end of 2014. JenCo accounts for this investment as available for sale.
• Oppong Corporation 9% bonds, $600,000 par value, purchased for $648,114; amortized cost was $633,001 at the end of 2014. The market interest rate had been 6% when the bond was acquired, and interest is paid annually at the end of each year.

In 2015, the following transactions occurred:

1. February 1 : A dividend of $2 per share was received on the Benson Inc. shares.
2. May 4 : Sold the Southgate Inc. shares for $199,000.
3. July 12 : Purchased 3,000 shares of United Corporation for $63 per share. JenCo accounts for this investment as held for trading.
4. August 18 : 560 Benson Inc. shares were then sold for $39,610.
5. December 31 : The annual interest was received on the Oppong Corporation bond; interest revenue is measured using the effective-interest method.
6. December 31 : Market values at the end of the year: Benson Inc., $70 per share, Southgate Inc., $71 per share, and United Corporation, $60 per share.

Prepare journal entries for the 2015 transactions and events. The company records dividends, interest income, amortization and holding gains (losses) separately to facilitate income tax preparation. Please make sure your final answer(s) are accurate to the nearest whole number. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).

What is a package policy? Explain the advantages of a commercial package policy to a business firm as compared to the purchase of separate policies.

The business income (and extra expense) coverage form has a number of policy provisions. Explain the following provisions: Business income loss, Coverage of extra expenses

Define robbery, burglary, safe burglary, and theft.

Identify the major exclusions in the commercial crime coverage form (loss-sustained form).

Question 2

Colonial Pharmaceuticals is a small firm specializing in new products. It is organized into two divisions, which are based on the products they produce. AC Division is smaller and the life of the products it produces tend to be shorter than those produced by the larger SO Division. Selected financial data for the past year is shown below. Divisional investment is as of the beginning of the year. Colonial Pharmaceuticals uses a 9 percent cost of capital and uses beginning-of-the-year investment when computing ROI and residual income. Ignore income taxes.

Required:

a. Compute divisional income for the two divisions.

division income

ac division

so division

b. Calculate the operating margin, which is equivalent to the return on sales, for the two divisions. (Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.16).)

operating margin

AC division %

SQ divison %

c. Calculate ROI for the two divisions. (Enter your answers as a percentage rounded to 2 decimal places (i.e., 32.16).)

Roi

AC divison %

So divison %

d. Compute residual income for the two divisions. (Negative amounts should be indicated by a minus sign.)

residual income for ac division So division

On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $27,000 due on December 31 of each year, calculated by the lessor using a 4% discount rate. Assume that at the beginning of the third year, January 1, 2020, Rick’s had made significant improvements to the truck whose cost could be recovered only if it exercises the extension option, creating an expectation that extension of the lease was “reasonably certain.” The relevant interest rate at that time was 5%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry, if any, at the beginning of the third year for the lessee to account for the reassessment.