Portfolio - business transactions

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Voenuvz2020

Business Finance

Description

You have decided to open a clothing store, which opens for business on January 1st. During the month of January, your company engages in many business transactions.

Download the excel spreadsheet Day and Knight computer Store for your company below. The spreadsheet includes the following tabs:

  • Transactions – Details the transactions that occurred in the month of January
  • Journal – General journal for the company
  • Ledger – General ledger for relevant accounts
  • Trial Balance – Template for unadjusted and adjusted trial balances
  • IS – Income Statement template
  • SE – Statement of Stockholders’ Equity template
  • BS – Balance Sheet template
  • CF – Statement of Cash Flows template

Required:

Part A

  • Prepare journal entries for all the transactions occurring in January
  • Post entries to the general ledger
  • Prepare the unadjusted trial balance as of January 31st
  • Prepare adjusting entries at January 31st
  • Post adjusting entries to the general ledger
  • Prepare the adjusted trial balance as January 31st
  • Prepare and post-closing entries and prepare trial balance at February 1st
  • Prepare the four primary financial statements on January 31st

Part B

Write a one-page memo analyzing the company's financial position for a potential investor, formatted APA.

Unformatted Attachment Preview

Lastname, firstname Portfolio Project Day & Knight Computer Connection was incorporated on January 1st. The business maintains a retail personal computer replacement a full range of services, including computer diagnostic services, virus removal, hardware replacement, software installation and upgrade The following transactions occurred during the first twelve months of operations: January 1st February 8th March 1st March 31st April 1st April 10th May 15th May 30th June 1st June 30th July 25th July 31st August 2nd August 6th September 15th September 29th October 13th October 29th November 1st November 15th December 15th Common stock is issued in exchange for cash in the amount of ………….………….……………………… The company purchases and pays for 400 units of computer replacement parts at a price of $35 per unit ……… The company pays cash for a one-year insurance policy in the amount of ……………….……………………… Rent on a retail space for 12 months is paid in the amount of …..……….……………………………………… Diagnostic tools and testing equipment with a useful life of 2 years is purchased for cash in the amount of …… PC tuning supplies purchased on account in the amount of …………..………………………………………… The company purchases and pays for another 200 units of computer replacement parts at a price of $38 per unit PC repair services are performed on account in the amount of ………………………………………………… The company pays for advertisements to be run for the next 12 months in the amount of ……………………… The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 8%. Interest is due on June 30th each year. The market rate is 6% on the date of issuance …………………………… Software installation & upgrade services are performed on account in the amount of …...……………………… 100 units of computer replacement parts are sold for $75 per unit with terms 2/10, n/30. The sale is recorded u the gross method in the amount of (see note c for cost flow assumptions) ……………………………………… Hardware replacement services are provided on account in the amount of ……………………………………… The company receives full payment from the customer for the July 31st sale …………………………………… Virus removal services are performed on account in the amount of ……………………..……………………… Customer payments are received for services previously provided in the amount of …………………………… 126 units of computer replacement parts are sold for $75 per unit with terms 2/10, n/30. The sale is recorded u the gross method in the amount of ……………………………………………………………………………… The company receives payment for half of the October 13th sale ……………………………………………… Equipment originally purchased on April 1st for $3,000 is sold for $1,500 cash A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation The bookkeeper is paid $4,500 for the previous month's services Additional information: a. PC tuning supplies on hand at the end of the month are as follows: ……………………………………. b. The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts is estimated as 2.5% of outstanding receivables at the end of the year c. The Company uses a perpetual inventory system and accounts for costs using the Last-In-First-Out cost flow assumption. On December 31st, a count of ending inventory reveals that there are 374 units of computer replacement parts on hand. d. All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statem e. The effective interest method is used to amortize bond premiums and discounts f. Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest e g. The bookkeeper is paid a salary of $4,500 on the 15th of every month. h. The company declared dividends of $400 for the year i. Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation and interest expense, are considered general & administrative. REQUIRED: 1. 2. 3. 4. 5. 6. 7. 8. Prepare journal entries for each transaction listed above (with descriptions). Post journal entries to the general ledger accounts. Prepare an unadjusted trial balance. Prepare all necessary adjusting journal entries (with descriptions) and post to the general ledger. Prepare an adjusted trial balance on December 31st. Prepare closing entries, post to the general ledger, and carryforward balances to January 1st of the next year. Prepare the following financial statements on December 31st (ignore income taxes): a. Income Statement (multi-step, see Example 5.2 in textbook) b. Statement of Stockholders' Equity c. Balance Sheet (classified) d. Statement of Cash Flows (indirect method) Rename the excel file Lastname_PortfolioProject_Option1.xls and submit your completed project online. ail personal computer replacement parts store, and also provides , software installation and upgrades, and optimization services. 325,000 14,000 10,375 10,125 24,360 2,450 7,600 10,835 1,440 100,000 10,975 7,500 7,820 7,350 2,695 1,250 9,450 4,725 4,500 1,470 Journal Date Accounts Debit Credit Journal Date Accounts Debit Credit - - ASSETS Cash Accounts Receivable Allowance for Doubtful Accounts Prepaid Insurance Supplies Prepaid Rent Inventory Prepaid Advertising Equipment Accumulated Depreciation LIABILITIES Accounts Payable Dividends Payable Interest Payable Salaries Payable Bonds Payable Bond Premium STOCKHOLDERS' EQUITY Common Stock Retained Earnings TEMPORARY ACCOUNTS Service Revenue Advertising Expense Insurance Expense Rent Expense Cash Discounts Supplies Expense Cost of Goods Sold Depreciation Expense Bad Debt Expense Salaries Expense Interest Expense Loss on Sale of Equipment Dividends YOUR COMPANY Trial Balance As of December 31, 2017 Accounts Cash Accounts Receivable Allowance for Doubtful Accounts Supplies Prepaid Insurance Prepaid Rent Prepaid Advertising Inventory Equipment Accumulated Depreciation Accounts Payable Interest Payable Bonds Payable Bond Premium Salaries Payable Dividends Payable Common Stock Retained Earnings Sales Revenue Cash Discounts Cost of Goods Sold Bad Debt Expense Interest Expense Salaries Expense Advertising Expense Insurance Expense Rent Expense Supplies Expense Depreciation Expense Loss on Sale of Equipment Dividends TOTAL Unadjusted Debit Credit Adjusting Debit Credit Adjusted Debit Credit January 1st, 2018 Debit Credit YOUR COMPANY Income Statement For the year ended December 31, 2017 Sales revenue (net) Cost of goods sold Gross profit Operating expenses: Selling expenses General & administrative expenses Depreciation expense Total operating expenses Operating Income Other items: Interest expense Loss on sale of equipment Net Income YOUR COMPANY Statement of Stockholders' Equity For the year ended December 31st, 2017 Common Stock Beginning Balance Issuance of Stock Add: Net Income Less: Dividends Ending Balance Retained Earnings Total YOUR COMPANY Balance Sheet As of December 31st, 2017 ASSETS Current assets: Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Supplies Prepaid insurance Prepaid rent Prepaid advertising Total current assets Long-term assets: Equipment Less: Accumulated depreciation Total long-term assets TOTAL ASSETS LIABILITIES Current Liabilities: Accounts payable Interest payable Salaries payable Dividends payable Total Current Liabilities Long-Term Liabilities Bonds payable Plus: Unamortized bond premium Total Liabilities STOCKHOLDERS' EQUITY Common Stock Retained Earnings Total Stockholders' Equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY YOUR COMPANY Statement of Cash Flows For the year ended December 31st, 2017 Cash Flows from Operating Activities Net Income Adjustments for noncash effects: Depreciation expense Bad debt expense Amortization of bond premium Loss on sale of equipment Changes in current assets and current liabilities: Increase in accounts receivable Increase in inventory Increase in supplies Increase in prepaid insurance Increase in prepaid rent Increase in prepaid advertising Increase in accounts payable Increase in interest payable Increase in salaries payable Net cash flows for operating activities Cash Flows from Investing Activities Purchase of equipment Proceeds from sale of equipment Net cash flows for investing activities Cash Flows from Financing Activities Issuance of common stock Proceeds from bond issuance Payment of dividends Net cash flows from financing activities Net increase in cash Beginning cash balance, Jan. 1 Ending cash balance, December 31st
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Explanation & Answer

Attached.

Lastname, firstname
Portfolio Project

Day & Knight Computer Connection was incorporated on January 1st. The business maintains a retail personal computer replacement
a full range of services, including computer diagnostic services, virus removal, hardware replacement, software installation and upgrade
The following transactions occurred during the first twelve months of operations:
January 1st
February 8th
March 1st
March 31st
April 1st
April 10th
May 15th
May 30th
June 1st
June 30th
July 25th
July 31st
August 2nd
August 6th
September 15th
September 29th
October 13th
October 29th
November 1st
November 15th
December 15th

Common stock is issued in exchange for cash in the amount of ………….………….………………………
The company purchases and pays for 400 units of computer replacement parts at a price of $35 per unit ………
The company pays cash for a one-year insurance policy in the amount of ……………….………………………
Rent on a retail space for 12 months is paid in the amount of …..……….………………………………………
Diagnostic tools and testing equipment with a useful life of 2 years is purchased for cash in the amount of ……
PC tuning supplies purchased on account in the amount of …………..…………………………………………
The company purchases and pays for another 200 units of computer replacement parts at a price of $38 per unit
PC repair services are performed on account in the amount of …………………………………………………
The company pays for advertisements to be run for the next 12 months in the amount of ………………………
The company issues a 5-year bond with a face value of $100,000 and a stated annual rate of 8%.
Interest is due on June 30th each year. The market rate is 6% on the date of issuance ……………………………
Software installation & upgrade services are performed on account in the amount of …...………………………
100 units of computer replacement parts are sold for $75 per unit with terms 2/10, n/30. The sale is recorded u
the gross method in the amount of (see note c for cost flow assumptions) ………………………………………
Hardware replacement services are provided on account in the amount of ………………………………………
The company receives full pa...


Anonymous
Great content here. Definitely a returning customer.

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