Task: You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company’s accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the company’s fiscal year.

Peter Pan Ltd Trial Balance as at June 30, 2018

The following additional information is available at June 30, 2018:

(i) Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018

(ii) The Furniture and equipment is being depreciated over 10 years on the double-declining balance method of depreciation, down to a residue of $80,000.

(iii) Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.

(iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand.

(v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded.

(vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000.

Required:

a) Prepare the necessary adjusting journal entries on June 30, 2018. [Narrations are not required]

b) Prepare the company’s multiple-step income statement for the year ended June 30, 2018.

c) Prepare the company’s statement of owner’s equity for the year ended June 30, 2018.

d) Prepare the company’s classified balance sheet as at June 30, 2018.

Balance Sheet

Assets: 12/31/19

Current Assets:

Cash $3,000.00

Accounts Receivable 1,250.00

Prepaid Expenses $100.00

Total Current Assets $4,350.00

Non-Current Assets:

Property, Plant, and Equipment

Land $10,000.00

Buildings 25,000.00

Equipment 15,000.00

Accumulated Depreciation $(12,000.00)

Total Property, Plant, and Equipment $38,000.00

Total Assets $42,350.00

Liabilities:

Current Liabilities

Accounts Payable $100.00

Accrued Expense 150.00

Salary and Wages Payable -

Notes Payable -

Unearned Revenue $1,500.00

Total Liabilities $1,750.00

Shareholder's Equity

Common Stock - $1 par (See Note Below) $15,000.00

Retained Earnings $25,600.00

Total Equity $40,600.00

Total Liabilities and Equity $42,350.00

Transactions during January 2020:

1. On January 2, 2020, ACC executed a 3 month- 6% promissory note for $10,000.00 in favor of its

bank, Cheatem Trust Company, Inc. for working capital purposes.

7. Depreciation expense for the month of January was $1,000.00

8. January service revenue for the Company is $21,000.00. All revenues are recorded as "on account."

9. ACC reviewed its work product for January and determined that it had performed $500.00 of the

services required that were being accounted for as unearned revenue in addition to revenues

described in transaction 8.

10. ACC recorded interest expense associated with the Note Payable described in transaction 1.

NOTE: Other events possibly having an effect on the company:

At the end of January, the Board of Directors voted to shut down and liquidate a component of the

company's operations. This represents a strategic shift in their operations. The component experienced

a 2,100 loss during January. This was partially offset by a $1,200 gain on the disposition of the assets.

Both of these transactions are net of tax and have already been appropriately reflected in the

Retained Earnings balance shown on the December 31, 2019 Balance Sheet.

Note 14 of ACC's financial statements for the year ended 12/31/19 indicates the company's

effective tax rate to be 25%.

The company's common stock account includes 100,000 shares authorized, 1,000 shares issued

and outstanding.

Required:

On separate sheets of paper, please:

Prepare the appropriate journal entries associated with the above transactions. It is not necessary to

prepare journal entries associated with the discontinued component.

Prepare a "T" account depiction of the Company's General Ledger activity for the

month of January 2020.

Prepare ACC's Income Statement for the month ending January 31, 2020

Prepare ACC's Balance Sheet at January 31, 2020.

Part III USING INFORMATION PROVIDED FROM PART 2 COMPLETE THE FOLOWING:

Carl Redmon decided to expand his business and begin selling accounting software, as well as providing consulting services. During January, Carl Redmon Consulting completed these transactions:

Jan   2   Completed a consulting engagement and received cash of $7,200.

          2   Prepaid three months’ office rent, $1,500.

          7   Purchased software inventory on account, $3,900, plus freight in, $100.

        15   Withdrew $500 for personal use.

        18   Sold software on account, $1,100 (cost $700).

        19   Consulted with a client for a fee of $900 on account.

        20   Paid the secretary’s salary for the month. ($4,000 for 30 days)

        21   Paid on account, $2,000.

        24   Paid utilities, $300.

        28   Sold software for cash, $600 (cost $400).

        31   Recorded these adjusting entries:

                a) Accrued salary expense.

                  b) Depreciation of computer and furniture.

                  c) Expiration of prepaid rent.

                  d) Expiration of prepaid insurance.   

                  e) Physical count of inventory, $2,800.

                  f)   Earned the remaining revenue from December 22.

                  g) Redmon estimates that 3% of inventory sold will be returned

Prepaid Insurance is for 2 years

Furniture originally cost $4,500. The furniture should last for five years.

Computer originally paid $2,400. It is expected to remain in service for five years, and have a $400 salvage value at the end of its useful life.

Required

1) Prepare journal entries for the above transactions and post these entries to the ledger.

2) Prepare adjusting entries on January 31 and post to the ledger.

3) Prepare an adjusted trial balance

4) Prepare closing entries at January 31, 2018 and post to the ledger.

5) Prepare a post-closing trial balance on January 31, 2018.

___________________________________________________________________________________________-

Panama Jack has invented a better infrared toaster oven, for which monthly demand is given by Q = 400 – 4P. (Q is in ovens per month and P is in dollars.)

a. (1/2 point) How much quantity is demanded at P = $50?

b. (1 point) If you got (a) correct, you should be able to figure out that the monthly revenue (P*Q) is $10,000. If the per-unit variable costs (which you might think of as “marginal cost”) are $35 per unit, how much are monthly profits at a price of $50?

c. (1 point) How many ovens must eventually be manufactured and sold at $50, over time, to break even against a fixed cost of $60,000 to design and create the prototype while supporting Jack during the invention and innovation process?

d. (2 points) It turns out that a price of $50 (and the quantity you found in (a)) maximizes revenue, but does not maximize profit. Equate marginal cost with marginal revenue to find the profit-maximizing price and quantity. If you can’t do this, simply plug in a quantity of 160 and go on.

e. (1 point) How many units must be manufactured at P* [the profit-maximizing price found in (d)], over time, to break even against the fixed cost of $60,000 to create the prototype?

f. (2 points) OK, so you’ve figured out how many ovens it takes to break even. How many months of production does it take to break even at prices of $50 and the profit-maximizing price found in (d), respectively? (You can ignore discounting and the time value of money, but don’t forget the Law of Demand!)

g. (1 points) As the inventor, Jack was planning to charge $50 for the oven. A strategic investor offers to rent Jack a manufacturing facility that will reduce Jack’s marginal cost from $35 to $25. If price stays at $50, what is Jack’s maximum willingness to pay (per month) for such a deal?

h. (2 points) After consulting with a pricing expert, Jack was planning to charge P*, the profit-maximizing price in [d]. At that price, what is Jack’s maximum willingness to pay (per month) for such a deal now?

i. (2 points) Comment on the cause(s) of the difference between your answers to (g) and (h). (Extra credit, 1 point) If Jack accepts the deal, is the price in [d] still the right price to charge? Why or why not?

Please answer question e.f.g.h.i

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019, the end of the current year, Pitman Company's accounting clerk prepared the following unadjusted trial balance:

The data needed to determine year-end adjustments are as follows:

Required:

Unexpired insurance at October 31, $5,450.

Supplies on hand at October 31, $670.

Depreciation of building for the year, $3,610.

Depreciation of equipment for the year, $3,130.

Unearned rent at October 31, $2,020.

Accrued salaries and wages at October 31, $3,530.

Fees earned but unbilled on October 31, $20,730.

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $14,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $12,000. The December 31, 2018, balance sheet showed the following:

On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $16,000 for $16,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 19,000 for $18,600. The Zebra Company bonds carry an 8% annual interest rate and mature on December 31, 2028. At the end of 2019, the respective market values of the bonds were: Xenon, $13,000; Yellow, $17,000; and Zebra, $20,000. Marsh classifies all of the debt securities as available-for-sale as it does not intend to hold them to maturity nor does it intend to actively buy and sell them. Assume that Marsh uses the straight-line method to amortize any discounts or premiums.

Required:

Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

CHART OF ACCOUNTS

Finders Investigative Services

General Ledger

Final Question. If Stacy Tanner, Capital has instead decreased $30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss? Enter a net loss as a negative amount using a minus sign.

Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs.

You opened a new pet supplies store and named it Ozzie’s Pet Supply and Boarding on December 1, 2019. The following information about December’s transactions, accounts, and adjustment data is available.

Transactions:
Dec. 1 Family members contributed $50,000 cash to the business in exchange for capital.

Dec. 2 Purchased $10,800 of equipment for the store paying cash.

Dec. 3 Paid $4,500 for a 9-month insurance policy starting on December 1.

Dec. 4 Paid $18,000 cash to purchase land to be used in operations.

Dec. 5 Purchased office supplies on account, $3,000.

Dec. 6 Borrowed $28,000 from the bank for business use. You signed a bank payable note for an interest rate of 5% APR.

Dec. 7Paid $800 for advertising expenses.

Dec. 8 Purchased inventory (dog food) for the store at a cost of $1,500

Dec. 9 Paid for office supplies $3,000

Dec 10 Received a bill for utilities to be paid in January, $200.

Dec 31 Service Revenues earned during the month included $18,500 cash and $2,000 on account.

Dec. 31 Sold one hundred percent of the dog food purchased on Dec. 8^th for $2,100 in cash.

Dec. 31 Paid employees' salaries $2,000 and building rent $800.

Dec. 31 Dividends of $200 were paid.

Dec. 31 Customer prepaid $1,000 for boarding services in January.

Accounts

Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Bank Notes Payable; Family, Capital; Service Revenue; Dog Food Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense-Equipment; Inventory; COGS; Dividends; Service Charge-Bank; Uncollectible Accounts Expense; Allowance for Doubtful Accounts.

Adjustment Data

1. Office Supplies used during the month, $600.
2. Depreciation on the Equipment for the month should be calculated based on straight-line depreciation and a useful life of 4 years (zero residual).
3. One month insurance has expired.
4. Calculate accrued interest expense and make adjusting entry.
5. Service charge from bank totaled $25.
6. Sales Method for reserving for doubtful accounts was executed (Remember, only A/R balances are considered).

The unadjusted trial balance for Grouper Corp. is shown below.

Assume the following adjustment data.

Prepare the adjusting entries for the items above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)