The following are the trial balance and the other information related to Bruce Sheffield, who operates a construction hauling business.

Sheffield withdrew $14,000 cash for personal use during the year.

1-From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2020.

2-Prepare an income statement for 2020.

3-Prepare a statement of owner’s equity for 2020.

4-Prepare a classified balance sheet for 2020.

Presented here are the comparative balance sheets of Hames Inc. at December 31, 2020 and 2019. Sales for the year ended December 31, 2020, totaled $590,000.

1. Calculate ROI for 2020. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) _______%
2. Calculate ROE for 2020. (Round your answer to 1 decimal place.) _______
3. Calculate working capital at December 31, 2020. _______
4. Calculate the current ratio at December 31, 2020. (Round your answer to 2 decimal places.) _______
5. Calculate the acid-test ratio at December 31, 2020. (Round your answer to 2 decimal places.) _______

e

You set up your own business in merchandising sector in Scranton, PA - opening a luxury watch shop on 1/1/2020.

The following is related information about the business:

-   Specific sub-sector: Merchandising sector.

-   Location: Scranton, PA

-   Business model: merchandiser - buying and selling luxury watches.

-   Investment by owner: $1,000,000

- You hired a shop manager. In order to handle different aspects of business, you had one employee responsible for the purchasing, receiving, and storing of watches purchased. A second employee is responsible for the maintenance of account receivable records and collection from customers. A third employee has responsibility for personal records, timekeeping, preparation of payrolls, and distribution of payroll checks. As a part of his job, the shop manager would do some internal control functions. In addition, you hired one security officer, and 4 full-time sales assistants.

Requirements:

1. You are given the following economic events of the business in 2020

1/1/2020: Opened the business, invested $1,000,000 cash in the business.

1/1/2020: bought a building for the business purpose for $100,000 cash. The building has a useful economic life of 10 years.

1/1/2020: purchased 100 luxury watches for $200,000 with $100,000 cash payment, the remaining amount payable on 2/1/2021. (each watch costs $2,000)

3/1/2020: purchased 50 luxury watches for $250,000 with cash. Each watch costs $5,000.

4/1/2020: purchased 40 luxury watches for $240,000 with cash. Each costs $6,000.

6/1/2020: Sold 130 watched for $1,300,000. Of which $300,000 cash was received at the time of sale. The remaining amount to be received on 5/2/2021.

7/1/2020: paid $1,200 in advance for 12 months’ property insurance (7/1/20 to 7/1/21).

8/1/2020: borrowed $500,000 from a local Chase bank. Interest rate is 12%/year. Interest is paid every 6 months- the first payment date is 2/1/2021. Principal would be paid on 8/1/2021.

9/1/2020: to expand business, you rent a showroom in the next building. Paid $24,000 cash in advance for 12 month’s rent.

12/31/2020: Paid 2020 utilities expense, advertising expense, and miscellaneous expense for $5000, $15,000, and $4,000, respectively.

Salary is paid on the last day of each month. Each month’s salary expense is $20,000.

Notes:

• On 12/31/2020: Physical inventory showed that there were 60 luxury watches on hand at the end of the period. The company used periodic inventory system, and used FIFO costing method.
• Your business used straight-line depreciation method for all fixed assets.
• Ignore tax.

Requirement: Prepare an excel file that includes

1. Tab 1 titled “accounting entries”: prepare all journal entries, adjusting entries, closing entries needed for the period ending on 12/31/2020 based on above economic events

You set up your own business in merchandising sector in Scranton, PA - opening a luxury watch shop on 1/1/2020.

The following is related information about the business:

-   Specific sub-sector: Merchandising sector.

-   Location: Scranton, PA

-   Business model: merchandiser - buying and selling luxury watches.

-   Investment by owner: $1,000,000

- You hired a shop manager. In order to handle different aspects of business, you had one employee responsible for the purchasing, receiving, and storing of watches purchased. A second employee is responsible for the maintenance of account receivable records and collection from customers. A third employee has responsibility for personal records, timekeeping, preparation of payrolls, and distribution of payroll checks. As a part of his job, the shop manager would do some internal control functions. In addition, you hired one security officer, and 4 full-time sales assistants.

Requirements:

1. You are given the following economic events of the business in 2020

1/1/2020: Opened the business, invested $1,000,000 cash in the business.

1/1/2020: bought a building for the business purpose for $100,000 cash. The building has a useful economic life of 10 years.

1/1/2020: purchased 100 luxury watches for $200,000 with $100,000 cash payment, the remaining amount payable on 2/1/2021. (each watch costs $2,000)

3/1/2020: purchased 50 luxury watches for $250,000 with cash. Each watch costs $5,000.

4/1/2020: purchased 40 luxury watches for $240,000 with cash. Each costs $6,000.

6/1/2020: Sold 130 watched for $1,300,000. Of which $300,000 cash was received at the time of sale. The remaining amount to be received on 5/2/2021.

7/1/2020: paid $1,200 in advance for 12 months’ property insurance (7/1/20 to 7/1/21).

8/1/2020: borrowed $500,000 from a local Chase bank. Interest rate is 12%/year. Interest is paid every 6 months- the first payment date is 2/1/2021. Principal would be paid on 8/1/2021.

9/1/2020: to expand business, you rent a showroom in the next building. Paid $24,000 cash in advance for 12 month’s rent.

12/31/2020: Paid 2020 utilities expense, advertising expense, and miscellaneous expense for $5000, $15,000, and $4,000, respectively.

Salary is paid on the last day of each month. Each month’s salary expense is $20,000.

Notes:

• On 12/31/2020: Physical inventory showed that there were 60 luxury watches on hand at the end of the period. The company used periodic inventory system, and used FIFO costing method.
• Your business used straight-line depreciation method for all fixed assets.
• Ignore tax.

Requirement: Prepare an excel file that includes

Tab 2 titled “income statement”: prepare a multiple-step income statement for year ended 12/31/2020.

Project Monitoring and Control Process Plan:
You have a Project Budget for building a five-bedroom house in Ashburn, VA. Assume that your building project is two months behind and has a $100,000.00 cost overrun. This should not be a surprise to you because of the monitoring processes. Identify and discuss some of the monitoring processes that could have alerted you of the schedule and cost problems. What are some of the controlling steps you would take to bring both the schedule and the cost back on track? Be sure to justify your answers. . Your Project Monitoring and Control Process Plan should be at least two pages including a summarization and conclusion page. If necessary, include data from the Project Budget and Project Schedule in the table shown below to support your schedule and cost problems.

Case Study 3.2: AT&T The case of the BTC and its successor the American Telegraph and Telephone Company (AT&T) illustrates the business and policy issues associated with telephony service provision. Bell’s contributions as discussed in the Historical Note included perfecting the technologies necessary for transmission of voice using electrical wires. However, these by themselves were not enough to ensure the success of telephony service provision. Bell also created a company which in time would provide a universal telephony service to almost the entire North American market. The BTC (and its successor, AT&T) was greatly successful and grew to become one of the most valuable companies on the New York Stock Exchange. The success of the BTC was based initially on its utilization of Bell’s patented technology, licensing fees and ensuring competitors remained at a disadvantage. In the process BTC successfully defended its patents in courts over a period of some 20 years [1]. As it grew, BTC’s cost advantage allowed it to outperform and acquire competitors one after another: eventually becoming almost the sole provider of telephony services in the United States. Telegraphy and telephony were nascent industries: BTC established an R&D entity, and equipment manufacturing subsidiaries to provide it with the necessary technologies and devices as well as leadership in the field. In particular, Bell Laboratories – the research arm of the company – was the place which attracted many of the brightest mathematicians and scientists of the day. These researchers discovered and formulated principles not only associated with telecommunications but also many other fields as diverse as astronomy and quantum physics. In time Bell Laboratories became a world leading research institute and home to seven Nobel Prize laureates as well many other prestigious award winners. By any measure BTC’s technological endeavor was a great success. BTC’s business dynamics were characterized by the high infrastructure roll-out cost, and network effects. It was soon realized that no market could afford to have more than one operator as it was inefficient to duplicate wiring, and difficult to connect circuits between two operators. This led to the establishment of monopoly operators in different geographic regions, who were then acquired one after another by BTC, resulting in a near-monopoly operation in North America. Indeed, a theory was developed by AT&T president Theodore Vail in 1907, that the telephone, ‘by nature of its technology, would operate most efficiently as a monopoly providing universal service’ [10]. This monopoly control of the market was in conflict with anti-trust laws of the United States, and therefore BTC had to negotiate with the US government to allow it to run a monopoly business despite existing strong anti-trust laws. Over the years several anti-trust suits were launched but BTC continued to operate successfully for over 100 years. Despite all its advantages, BTC–AT&T fell into decline in the mid-1980s and was finally acquired by competitors, a fall which can be attributed to all three technological, business and policy factors. First, on the policy side, monopoly operation and lack of competition may have had a role in AT&T’s reputation for inadequate customer service. In 1974 another anti-trust suit was launched by the US government which resulted in a settlement which broke the monopoly operation that BTC had enjoyed. The company was divided into seven regional telephone operators known as Baby Bells. An eighth company connected these regional companies as a long-distance operator under the name AT&T. While BTC–AT&T had remained successful from the technological and business viewpoints, it had failed to stay with the policy shift and adjust accordingly. AT&T continued to operate profitably as a long-distance operator, carrying calls between regional Baby Bell telephone companies, and later as a mobile telephone operator. However, technological developments in whose development AT&T had played a prominent role led to its own demise. Bell Laboratories had been one of the major contributors to the development of optical fibre systems. These cables have very large capacities and can carry a very large number of simultaneous telephone calls. With the deployment of optical fibre cables in place of copper cables, and the deregulation of operator business, the cost of long-distance telephony dropped, and AT&T's business as a long-distance operator suffered. Mobile telephony was the other technological development which Bell Laboratories had pioneered. The growth of mobile operators and the competitive pressures on AT&T mobile division, in addition to its dubious strategic moves into content provision, finally led to high debt burdens and eventual fall. In effect, the technological break-throughs pioneered by AT&T had been used by its competitors in a more effective way. The ‘AT&T’ brand however was still very valuable and the acquiring companies adopted the name. The policy–business–technology developments of the last decades in the 20th century transformed the industry landscape and led to emergence of new companies. It also signaled the end of arguably the most iconic telecommunications company. Many telephone operators went through the same experience as AT&T. The majority were government-owned, and many have stayed afloat after deregulation. The emergence of mobile and broadband telecommunications has created new revenue streams as the case of Australian operator Telstra demonstrated. Nevertheless, the dynamics of technology, business and policy have been in play in every market, and have been instrumental in the success or failure of operator companies.

Case Study Questions: How did AT&T manage the technology–business–policy framework?

Case Study Question: Why was AT&T broken up?

On August 1, 2020, Kazazis Company sold inventory to Magic Company and received Magic’s 9-month, noninterest-bearing $100,000 note due April 30, 2021. The cash selling price of the inventory was $94,000. The cost of the inventory was $60,000. Kazazis records adjusting entries annually at December 31.

a. Record the August 1, 2020, journal entries (including COGS) for Kazazis.

b. If Kazazis recorded the note as an interest-bearing note on August 1, 2020, (i.e., did not record a discount on the note), how would the financial statements be misstated (overstated/understated and $ amount)?. (Hint: Record the entry without the discount and compare to your answer in part a.)ASSETSLIABILITIESSE2020 NET INCOME$$$$OverstatedOverstatedOverstatedOverstatedUnderstatedUnderstatedUnderstatedUnderstated

c. Record the December 31, 2020, adjusting entry for Kazazis.

d. If Kazazis’ 2020 net income without including the Aug. 1 sale or December 31 adjusting entry was $200,000, what is the correct 2020 net income? Ignore taxes.

e. What amounts related to the note will Kazazis report on its 2020 balance sheet?

f. Record the April 30, 2021, journal entry/entries for Kazazis. (You may choose to record 1 entry as we did in the example in class or 2 entries as required by Connect.)

Major Communications Ltd., a publicly traded company that specializes in data capture, has been in operation for several years. On October 1, 2019, it had 10 million common shares authorized and 1.5

million shares issued at an average value of $30 per share. As well, there were 1 million preferred shares authorized, with 200,000 of them issued at $15 per share. On October 1, 2019, the balance in Retained Earnings was $20,375,000. During the fiscal year 2020, the following transactions affected shareholders' equity:

1. On November 1, 2019, 400,000 new common shares were issued at $32 per share.
2. On March 15, 2020, a 5% common stock dividend on the outstanding shares was declared and distributed when the market price was $45 per share.
3. On September 1, 2020, a dividend of $5.15 per common share was declared. The date of record was September 15, 2020, with the date of payment being October 5, 2020.
4. The preferred shares pay an annual dividend of $1.20. The preferred dividend for the year was declared and paid.
5. During the fiscal year ended September 30, 2020, the company generated net income after taxes of $25 million. RequiredComplete the below statement of changes in shareholders' equity as at September 30, 2020

For each of the following transactions that occurred during the year, indicate the dollar amount to be reported as a current liability as of December 31, 2020. (Enter 0 for amounts if no current liability is to be reported. Do not leave any answer field blank.)

In 2020, Ibran Corp. required additional cash for its business. Management decided to use accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following transactions:

1. On July 1, 2020, Ibran assigned $600,000 of accounts receivable to Provincial Finance Corporation as security for a loan. Ibran received an advance from Provincial Finance of 90% of the assigned accounts receivable less a commission of 3% on the advance. Before December 31, 2020, Ibran collected $220,000 on the assigned accounts receivable, and remitted $232,720 to Provincial Finance. Of the latter amount, $12,720 was interest on the advance from Provincial Finance.

2. On December 1, 2020, Ibran sold $300,000 of accounts receivable to Wunsch Corp. for $275,000. The receivables were sold outright on a without recourse basis and Ibran has no continuing interest in the receivables.

3. On December 31, 2020, an advance of $120,000 was received from First Bank by pledging $160,000 of Ibran's accounts receivable. Ibran's first payment to First Bank is due on January 30, 2021. Instructions a. Prepare a schedule showing the income statement effects of 1004 these transactions for the year ended December 31, 2020.

Instructions
a. Prepare a schedule showing the income statement effects of
these transactions for the year ended December 31, 2020.