Typical Adjusting Entries

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febwna1970

Business Finance

MBA FP 6014 Financial Accounting

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  • 2nd attempt to find a good tutor to answer this assignment

    The resources provided here are optional. You may use other resources of your choice to prepare for this assessment; however, you will need to ensure that they are appropriate, credible, and valid. They provide helpful information about the topics in this unit. The MBA-FP6014 – Financial Accounting Library Guide can help direct your research. The Supplemental Resources and Research Resources, both linked from the left navigation menu in your courseroom, provide additional resources to help support you.The following resources are assessment specific templates for completing the assessment.The following resources provide relevant financial accounting methods and practices.
    • Doran, D. T. (2012). Financial reporting standards: A decision-making perspective for non-accountants. New York, NY: Business Experts Press.
      • Chapter 3, "Inventory and Cost of Goods Sold," pages 58-88
      • Chapter 4, "Operational Assets," pages 89-124
    • Libby, R., Libby, P., & Hodge, F. (2017). Financial accounting (9th ed.). New York, NY: Irwin. - Available from the bookstore
      • Chapter 7, "Reporting and Interpreting Cost of Goods Sold and Inventory," pages 326–357.
      • Chapter 8, "Reporting and Interpreting Property, Plant, and Equipment; Natural Resources; and Intangibles," pages 380–419.
  • Assessment Instructions

    Note: Some of the assessments in this course build upon each other, so you are strongly encouraged to complete them in the order in which they are presented.For this assessment, complete Problems 1 and 2. You may use Word or Excel to complete the assessments throughout this course, but you will find Excel to be most helpful for creating spreadsheets. Tutorials for using Excel are provided in the Supplemental Resources in the left navigation menu. If you use Excel, submit the assessment in one Excel document, using separate tabs for each spreadsheet.To complete the first problem, you may choose to use the Assessment 6, Problem 1 Template linked in the Suggested Resources under the Capella Resources heading.

    Problem 1: The Effects of Different Cost Flow Assumptions for Inventory

    At the end of January 2011, the records of Sheldon and Blair showed the following for a particular item that sold at $20 per unit:
    Problem 1, Table 1: Records of Sheldon and Blair
    TransactionsUnitsTotal Amount
    Inventory, January 1, 2011500 @ $6.00$3,000
    Purchase, January 12600 @ $7.00$4,200
    Purchase, January 26200 @ $7.10$1,420
    Sale(400 units sold for $20 each)
    Sale(300 units sold for $20 each)
    Based on the information provided in the table above, complete the following. An optional template, Assessment 6, Problem 1 Template, is provided in the Suggested Resources under the Capella Resources heading.
    1. Assuming the use of a periodic inventory system, prepare a summarized income statement through gross profit for the month of January under each method of inventory listed below. Show the inventory computations for each method in detail.
      • a. Average cost. (Round the average cost per unit to the nearest cent.)
      • b. First in, first out (FIFO).
      • c. Last in, first out (LIFO).
      • d. Specific identification. (Assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase.)
    2. Of FIFO and LIFO, which method would result in the higher pretax income? Which would result in the higher EPS?
    3. Of FIFO and LIFO, which method would result in the lower income tax expense? Explain, assuming a 35 percent average tax rate.
    4. Of FIFO and LIFO, which method would produce the more favorable cash flow? Explain.

    Problem 2: The Effects of Differing Depreciation Methods

    Total Workout, Inc. purchased three ï¬ï¿½tness machines from Ace Used Equipment at the beginning of the year. All three were used machines that had to be overhauled and installed before they were put into use. The costs of the machines and their renovation and installation are shown in Table 1 below:
    Problem 2, Table 1: Equipment Costs
    AccountMachine AMachine BMachine C
    Amount paid for asset$21,000$30,750$8,000
    Installation cost$500$1,000$200
    Renovation costs prior to use$2,000$1,000$1,500
    By the end of the first year, each machine had been operating 4,800 hours. Depreciation estimates are shown in Table 2 below:
    Problem 2, Table 2: Equipment Depreciation
    MachineLifeResidual ValueDepreciation Method
    A5 years$1,000Straight-line
    B60,000 hours$2,000Units-of-production
    C4 years$1,500Double-declining balance
    Using the data provided above, complete the following:
    1. Compute the cost of each machine.
    2. Give the entry to record depreciation expense at the end of the first year, using all three depreciation methods listed in Table 2.
    Inventory Analysis and Depreciation Methods Scoring Guide
    VIEW SCORING GUIDEUse the scoring guide to enhance your learning.How to use the scoring guide

Unformatted Attachment Preview

Template for adjusting entries in a journal: Column A is the letter (a through h) for the transaction, column B is for the type of adjustment, column B is for debits (DR), and column D is for credits (CR). Learner: Huntington Company Adjusting Entries 31-Dec-11 DR a. Unearned Rent Revenue Rent Revenue (4 months of 6 months of $9,000) b. Interest Expense Interest Payable ($30,000 × .12 × 3/12) c. Depreciation Expense Accumulated Depreciation - Truck (amount of $5,000 is given) d. Unearned Service Revenue Service Revenue ($4,800/12 × 2 months) e. Insurance Expense Prepaid Insurance ($12,000/12 × 2 months) f. Accrued Service Revenue Service Revenues (amount of $6,000 is given) g. Wages Expense Accrued Wages Payable (amount of $17,500 is given) h. Property Tax Expense Accrued Taxes Payable (amount of $16,000 is given) End of worksheet CR Template for indicating the effect of each adjusting entry (a through h from Problem 1) on the balance sheet and income statement. Compute the assets, liabilities, stockholders' equity, revenues, expenses, and net income for all transactions. Huntington Company, year ended December 31, 2012. Learner: BALANCE SHEET TRANSACTION Assets a NE b NE Stockholders' Equity Liabilities Revenues Net Income Expenses NE NE c d INCOME STATEMENT 900 NE NE e -800 800 -2,000 NE 800 NE -2,000 NE 800 2,000 -2,000 f g NE h NE CR NE 16,000 CR -2,000 Change in Assets & Liabilities Change In: DR Assets Liabilities Equity Must Equal End of worksheet DR 15,200 CR 28,600 28,600 - NE CR -17,500 -16,000 DR -1,200 800 17,200 Revenue − Expense = DR 2,900 -34,700 -2,100
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Explanation & Answer

HeyPlease find the attached excel sheet.. The template that you have provided are not for these questions ... I have completed my work in excel. Do let me know If you have any query

Inventory Units = 1300-700
Average Cost per unit = 8620/1300
Value of ending Inventory
Cost of Goods Sold =
Total cost- Ending Inventory

Sales
Cost of Goods Sold
Gross Margin

Inventory Units = 1300-700
Value of ending Inventory
Cost of Goods Sold =
Total cost- Ending Inventory

Sales
Cost of Goods Sold
Gross Margin

Inventory Units = 1300-700
Value of ending Inventory
Cost of Goods Sold =
Total cost- Ending Inventory

Sales
C...


Anonymous
Excellent resource! Really helped me get the gist of things.

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