an excel project

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there will be 2 files one the instruction and the other the excel file

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Acctg 202 Project 3 This template is to be completed following the instructions detailed in the "Project 3 - Instructions" file. Do not change the lines or spacing in this spreadsheet. All input areas are outlined in blue. Do not enter data in any other cells. Statement of Responsibility We, the students listed below, have all worked together on all parts of the project hereby submitted. All work has been performed exclusively by us and only us. We have not compared answers or discussed this project with anyone other than our instructor or GA's. We are aware of the penalty for academic dishonesty stated in the course syllabus. Last three digits of Student ID List names below: Total the numbers above Enter the last 3 digits of your total for (A). If > 500, stop here and enter this amount below for hours to be worked. If total is < 500, add 500 to the number and enter in ( C). Enter this amount for the number of hours to be worked. Part A - You MUST use formulas for subtotals and totals (A) (B) (C) Arachne, Inc. Budgeted Income Statement For the Year Ended December 31, 2017 Hours To Be Worked from (B) or ( C) above Revenue Variable expenses Total variable expenses Contribution margin Fixed expenses Total fixed expenses Operating income 1. How many hours of work will it take to break even? 2. What is your margin of safety in hours? 3. What is the percentage increase in total contribution margin if hours worked increase 20%? 4.Calculate the the company's operating leverage factor. 5. What is the percentage increase in operating income if hours to be worked increase 20%? Per hour Total Per hour Total Part B - You MUST use formulas for totals and subtotals Arachne, Inc. Cash Budget For the Year Ended December 31, 2017 Beginning cash balance Cash receipts from $ Total cash available Cash payments for Total budgeted disbursements Ending Cash Balance Part C (see instruction file page 2 for sample) You MUST use formulas for subtotals and totals Arachne, Inc. Budgeted Balance Sheet December 31, 2017 Assets: Current Assets (List in order of liquidity) Total Current Assets Long-term Assets Total Long-term Assets Total Assets Liabilities: Current Liabilities Total Current Liabilities Total Liabilities Shareholder's equity: Total Shareholder's Equity Total Liabilities and Shareholder's Equity 1. Will you be able to repay your parents for the computer and software early on January 1, 2018? 2. Will you be able to repay your parents for the computer and software on the due date of January 31, 2018? Part D - Details described the Instruction File 5,000 1. What is your contribution margin per hour now? 2. What is your break-even point now? 3. What is your total revenue now? 4. What are your total variable costs now? 5. What are your total fixed costs now? 6. What is your total operating income now? 7. In order to maximize profits, what price per hour should you charge? ($45 or $50 per hour) Part E - Details described in Instruction File 1. What kind of costs are the fees from Virtual Office Company? ( fixed, variable, or mixed) 2. Look at your original budgeted income statement. Which of the expenses are relevant to this outsourcing decision? 3. If you outsource to Virtual Office Company, how much will they charge you in total for the year? 4. Should you outsource your assistant? (Yes, No, Doesn't Matter) 5. What qualitative factors should you consider in making your outsourcing decision? Part F - Details described in instruction file (Be sure to label variances as F or U) Do not enter answers in shaded cells. 1. Calculate the volume variance for sales revenue (show your work): 2. Calculate the flexible budget variance for sales revenue (show your work): Part G - Details described in instruction file 1. Calculate net annual cash inflow expected if the server is purchased. (show your work) Net Annual Cash Inflow 2. a) First, calculate the present value of the future cash flows (show your work): 2. b) Next, calculate the Net Present Value (NPV) (show your work): Net Present Value (NPV) 3.a) Should you buy the server? (Yes or No) 3.b) Why or why not? ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY Record the expected adjusting entries in the T-Accounts for the following: Accounts Common Cash Payable Stock 5,000 5,000 Accounts Receivable Wages Payable Office Supplies Notes Payable Retained Earnings Dividends 4,800 Prepaid Insurance Equipment 4,800 Accumulated Depreciation KHOLDER'S EQUITY Sales Wages Expense Insurance Expense Advertising Expense Supplies Expense Depreciation Expense Accounting 202 Project 3 Instructions: This document contains the instructions and information you will use to complete Project 3. Accompanying this document is an Excel worksheet that contains the template for Project 3. Background: You decide to earn some money to finance your education by starting a business that designs Web pages. You will begin business on January 1, 2017, and run the business for the next 12 months. On your Excel spreadsheet, calculate the number of budgeted hours you will work for clients during the year by adding the last three digits of your student ID numbers of all group members. Only use the last three digits of this sum. If the number is less than 500, add 500 to the number. (If the last three digits of your ID number happen to be 000, use the first three digits of your ID number instead.) This number will be the expected number of billable hours to be worked in the coming budget year. You are going to prepare a budgeted income statement, cash budget, and budgeted balance sheet for the coming year based on the assumptions listed below. BUDGET ASSUMPTIONS FOR THE COMING YEAR: 1. Before the business begins, you will take $5,000 cash from your savings account to invest in the business. You will protect yourself by organizing as a corporation, with yourself as the only stockholder. 2. Before the business begins, it will buy a computer, printer, and software package that together cost $4,800. Your parents have agreed to lend the business $4,800 cash so that the business can pay for the equipment and software. The business plans to repay your parents on January 31, 2018. Your parents do not expect any interest but require you to sign a promissory note. The beginning balance sheet for your business is presented on the following page: 1 Arachne, Inc. Balance Sheet January 1, 2017 Assets Current Assets Cash Long-term Assets Equipment Less Accumulated Depreciation $5,000 4,800 0 4,800 $9,800 Total Assets Liabilities and Stockholder’s Equity Current Liabilities Long-term Liabilities Note Payable Total Liabilities Stockholder’s Equity Common Stock Retained Earnings Total Liabilities Total Liabilities and Stockholder’s Equity $0 4,800 $4,800 $5,000 0 $5,000 $9,800 3. Starting January 1, 2017, the business will charge $50 per hour for design work and bill clients as each job is completed. You expect that by December 31, 2017, the end of the fiscal year, 80% of clients will have paid the business in cash. You expect that the rest will pay by January 31, 2018. 4. The business will hire an assistant to help with general office work. The assistant will earn $18 per hour and will work exactly the same hours that you work. The assistant will be paid for each month's work on the fifth day of the month following the month when the work is done. For the sake of simplicity, treat the assistant as an independent contractor rather than an employee. This means that you do not have to worry about withholding or matching payroll taxes. Assume that hours worked in December, 2017 are expected to total 10% (round to nearest whole hour) of the total hours for the year. 5. The business will purchase office supplies for cash of $2,500 in January, 2017 6. On February 1, the business will pay cash of $2,160 for a one-year liability insurance policy. 7. Since this is a new business, you think that it is important to advertise. The business will buy $450 of newspaper advertising each month. All payments for advertising costs will be made in the following month. (For example, January advertising expense will be paid for in February). 8. A dividend of $3,000 will be declared and paid before year end. Record SUMMARY budgeted transactions for the entire year based on the above assumptions in the TAccounts below. Round all amounts to the nearest whole dollar. The T-Accounts will not be turned in, but should be completed to assist you in completing the budgeted financial statements. 2 ASSETS = LIABILITIES + STOCKHOLDER’S EQUITY Record the expected adjusting entries in the T-Accounts for the following: Cash Accounts Payable Common Stock 5000 5000 Sales Wages Expense Accounts Receivable Retained Earnings Wages Payable Insurance Expense Advertising Expense Office Supplies Notes Payable 4800 Dividends Supplies Expense Prepaid Insurance Depreciation Expense Equipment 4800 Accumulated Depreciation 3 A1) It is expected that the equipment and software will be used for four years, after which time they will be worthless. The business uses the straight-line method of depreciation. A2) It is expected that office supplies will be used up at the rate of $2.00 per hour worked, with the remaining amount still on hand at year-end. A3) Record the insurance that has been used up during the year. Instructions for Excel Worksheet: Part A: In the Excel spreadsheet, complete the Budgeted Income Statement (you may not need to fill in all lines provided) and questions 1. – 5. Part B: Review chapter 9 and your notes from class. In the Excel spreadsheet, complete the Cash Budget (you may not need to fill in all lines provided). Part C: Review Chapter 9 and your notes from class. In the Excel spreadsheet, complete the Budgeted Balance Sheet in good form. Complete questions 1. and 2. in this section. Part D: Review Chapter 7 and 10 and your notes form class. Assume that you have now decided to charge clients $45 per hour instead of $50 per hour. Demand for your services will increase 10% over the hours you used in your original budget. All the other assumptions above remain the same. Answer questions 1. – 7. in the Excel spreadsheet. Part E: Review Chapters 7 and 8 and your notes from class. Ignore the information used in Part D above and go back to the original assumptions on page 1. Now assume that Virtual Office Company could replace your assistant with their own office service. They will charge you $700 per month plus 10% of your revenue. Answer questions 1. – 5. in the Excel spreadsheet. Part F: Review Chapter 10 and your notes from class. Ignore the information provided in Part D and E above and go back to the original assumptions on page 1. Your original budgeted income statement is your “master” budget. Assume now that actual hours worked were 500 and the actual price charged per hour was $53. Answer questions 1. and 2. in the Excel spreadsheet. Part G: Review Chapter 12 and your notes from class. In the Excel spreadsheet, answer questions 1. – 3. 1. You are considering the purchase of a Web server that costs $16,000. Your parents have offered to provide another interest-free loan. You plan to use this server for five years and then sell it for the expected residual value of $4,000. This server will allow your clients to post their Web pages and is expected to generate annual incremental operating income equal to 25% of the operating income from Part A. (Round to the nearest dollar.) (The expected incremental operating income includes the depreciation expense on the new server only.) In the Excel spreadsheet, calculate the annual net cash inflow expected from the server. Show your work. 2. Assuming that every year for the next five years that you will use the server, you will earn the same net cash inflows that you calculated above. Using the tables from your textbook and an 14% required rate of return, calculate the present value of the future cash inflows. Next, calculate the net present value of the proposed investment. Label your calculations clearly. 3. Based on your calculation of net present value, should you buy the server? 4
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Explanation & Answer

Attached.

1

Excel Project

Student name
Institutional affiliation:

2
Excel Project
The attached excel file addresses the question “an excel project” as follows:


Part A to Part G


Acctg 202

Project 3

This template is to be completed following the instructions detailed in the "Project 3 - Instructions" file. Do not change the
lines or spacing in this spreadsheet. All input areas are outlined in blue. Do not enter data in any other cells.

Statement of Responsibility
We, the students listed below, have all worked together on all parts of the project hereby submitted. All work has been
performed exclusively by us and only us. We have not compared answers or discussed this project with anyone other
than our instructor or GA's. We are aware of the penalty for academic dishonesty stated in the course syllabus.
Last three digits of
Student ID
345
293
638

List names below:
Walter Smith
Cate James
Caroline Johns
Total the numbers above
Enter the last 3 digits of your total for (A). If > 500, stop here and enter this amount below for hours to be worked.
If total is < 500, add 500 to the number and enter in ( C). Enter this amount for the number of hours to be worked.
Part A - You MUST use formulas for subtotals and totals

(A)
(B)
(C)

345
293
638

Arachne, Inc.
Budgeted Income Statem...


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