Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows: Cash $ 20,870 Unearned Revenue (30 units) $ 5,100 Accounts Receivable $ 11,900 Accounts Payable (Jan Rent) $ 2,800 Allowance for Doubtful Accounts $ (1,650) Notes Payable $ 13,500 Inventory (35 units) $ 2,975 Contributed Capital $ 6,500 Retained Earnings – Feb 1, 2012 $ 6,195 • WWC establishes a policy that it will sell inventory at $165 per unit. • In January, WWC received a $5,100 advance for 30 units, as reflected in Unearned Revenue. • WWC’s February 1 inventory balance consisted of 35 units at a total cost of $2,975. • WWC’s note payable accrues interest at a 12% annual rate. • WWC will use the FIFO inventory method and record COGS on a perpetual basis. February Transactions 02/01 Included in WWC’s February 1 Accounts Receivable balance is a $1,300 account due from Kit Kat, a WWC customer. Kit Kat is having cash flow problems and cannot pay its balance at this time. WWC arranges with Kit Kat to convert the $1,300 balance to a note, and Kit Kat signs a 6-month note, at 12% annual interest. The principal and all interest will be due and payable to WWC on August 1, 2012. 02/02 WWC paid a $800 insurance premium covering the month of February. The amount paid is recorded directly as an expense. 02/05 An additional 190 units of inventory are purchased on account by WWC for $14,250 – terms 2/15, n30. 02/05 WWC paid Federal Express $380 to have the 190 units of inventory delivered overnight. Delivery occurred on 02/06. 02/10 Sales of 160 units of inventory occurred during the period of 02/07 – 02/10. The sales terms are 2/10, net 30. 02/15 The 30 units that were paid for in advance and recorded in January are delivered to the customer. 02/15 25 units of the inventory that had been sold on 2/10 are returned to WWC. The units are not damaged and can be resold. Therefore, they are returned to inventory. Assume the units returned are from the 2/05 purchase. 02/16 WWC pays the first 2 weeks wages to the employees. The total paid is $2,300. 02/17 Paid in full the amount owed for the 2/05 purchase of inventory. WWC records purchase discounts in the current period rather than as a reduction of inventory costs. 02/18 Wrote off a customer’s account in the amount of $1,750. 02/19 $5,600 of rent for January and February was paid. Because all of the rent will soon expire, the February portion of the payment is charged directly to expense. 02/19 Collected $9,500 of customers’ Accounts Receivable. Of the $9,500, the discount was taken by customers on $6,500 of account balances; therefore WWC received less than $9,500. 02/26 WWC recovered $550 cash from the customer whose account had previously been written off (see 02/18). 02/27 A $700 utility bill for February arrived. It is due on March 15 and will be paid then. 02/28 WWC declared and paid a $950 cash dividend. Adjusting Entries: 02/29 Record the $2,300 employee salary that is owed but will be paid March 1. 02/29 WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts. 02/29 Record February interest expense accrued on the note payable. 02/29 Record one month’s interest earned Kit Kat’s note (see 02/01).

NEEDED JOURNAL ENTRIES: Feb 15. Record the 25 units of inventory returned Feb 29. WWC decides to use the aging method to estimate uncollectible accounts. WWC determines 8% of the ending balance is the appropriate end of February estimate of uncollectible accounts.

-Describe the attributes of the different forms of financing, i.e. debt and equity.?

-Differentiate between common stock and preferred stock?

-List the major goals of financial management?

-Be able to discuss corporate governance, and the roles and responsibilities of the three groups involved?

-Be able to differentiate between a closely held and a publicly held firm?

-List the types of information found in a corporation’s annual report and differentiate between the other levels of financial statement reporting.?

-Explain what a balance sheet is, the information it provides, and how assets and claims on assets are arranged on a balance sheet.?

-Explain what an income statement is and the information it provides.?

-Identify the purpose of the statement of cash flows, list the factors affecting a firm’s cash position that are reflected in this statement, and identify the three categories of activities that are separated out in this statement.?

-Differentiate between cash flow profits (net cash flow) and accounting profit.?

-Discuss how certain modifications to the accounting data are needed and used for corporate decision making and stock valuation purposes. In the process, explain the terms: net operating working capital, total operating capital, Investor Supplied Capital, NOPAT, free cash flow, and operating cash flow; and explain how each is calculated and be prepared to calculate each.?

-Be able to discuss how a corporation determines the taxes that it pays.?

-List some of the many different attributes of financial markets, and identify several recent trends taking place in the financial markets.?

-List and describe the two different kinds of stock markets.?

-Describe the attributes of an “IPO”.?

-Describe three ways in which the transfer of capital takes place.?

-Discuss the various financial and investment intermediaries.?

-Discuss how business income taxes are determined and calculate the taxes owed by a business.?

McEwan Industries sells on terms of 3/10, net 20. Total sales for the year are $1,381,000; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 66 days after their purchases. Assume 365 days in year for your calculations. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

1. What is the days sales outstanding? Round your answer to two decimal places.

   days

2. What is the average amount of receivables? Round your answer to the nearest cent. Do not round intermediate calculations.

   $  

3. What is the percentage cost of trade credit to customers who take the discount? Round your answers to two decimal places.

   %

4. What is the percentage cost of trade credit to customers who do not take the discount and pay in 66 days? Round your answers to two decimal places. Do not round intermediate calculations.

   Nominal cost:  %

   Effective cost:  %

5. What would happen to McEwan’s accounts receivable if it toughened up on its collection policy with the result that all nondiscount customers paid on the 20th day? Round your answers to two decimal places. Do not round intermediate calculations.

   DSO =  days

   Average receivables = $  

Suppose that on the average a certain store serves 5 customers per hour. What is the probability that the store will serve 8 customers in a particular two-hour period?

1. Dollar stores like Dollar General do not pay customers’ transportation costs. Nonetheless, such stores have the incentive to minimize customers’ transportation costs. Why?

Why do you think it is more important to differentiate yourself as a company when dealing with business to business transactions and customers than business to consumer customers?

Prepare journal entries, income statement, statement of retained earnings and analysis for the following:

For Analysis

C8-3 Recording Daily and Adjusting Entries Using FIFO in a Perpetual Inventory System (Chapters 3, 4, 6, 7, and 8) (LO 3-3, 4-2, 4-3, 4-4, 6-3, 6-4, 6-5, 7-3, 8-2, 8-3) (General Ledger)

  * credit balance.

Imagine that a researcher is conducting a paired-samples t test. She finds that the sample mean difference is 3.665, the standard deviation of the difference scores is 9.334, and the sample size is 75. The researcher is also using a typical null hypothesis that proposes no differences between the relevant population means. Under these circumstances, what is the value of Cohen's d? Please retain a minimum of three decimal places for all steps (if relevant) and provide a minimum of three decimal places when writing your answer.