Accounting Project Spring
This is a formal project, and the following standards are to be applied:
If help is needed you may consult with instructor. You are encouraged to send the instructor drafts of your work to make sure that you are on the right track.
A. All items must be typed, except for the T accounts which may be neatly handwritten (although using excel spreadsheet would be useful).
B. Work must be collated in the following manner:
1. Cover Sheet
2. Problem 1 work (Financial Statements with proper headings) and brief written analysis.
3. General Journal Entries (problem 2)
4. Chart of Accounts-listing of all accounts with identification numbers (problem 2)
5. Ledger/T-Accounts (problem 2)
6. Financial Statements (problem 2)
7. Written Analysis (problem 2)
C. No projects will be accepted after the deadline. No exceptions. Early submission will be accepted and is encouraged.
D. This project is worth 20 % of your overall semester grade.
Problem One: Below is the financial data for One Corporation for 2013, 2014 and 2015
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2015
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2014
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2013
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Equipment $83,005
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Cash $14,500
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Owner's Equity $244,752
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Cash $17,286
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Marketable Securities $9,000
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Accounts Payable $51,400
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Accounts Receivable $49,317
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Accounts Receivable $31,000
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Cash $12,996
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Owner's Equity $265,230
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Allowance for Bad Debt $2750
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Accounts Receivable $34,620
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Plant $121,300
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Plant $121,300
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Allowance for Bad Debt $5,000
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Land $80,030
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Land $80,030
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Inventory $48,201
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Accounts Payable $57,424
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Equipment $83,005
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Plant $121,300
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Marketable Securities $5,000
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Accounts Payable $49,000
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Land $80,030
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Inventory $53,716
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Long-Term Liabilities $75,000
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Marketable Securities $4,000
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Long-Term Liabilities $80,000
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Inventory $46,000
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Equipment $83,005
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Allowance for Bad Debt $7,000
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Owner's Equity $258,085
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Long-Term Liabilities $83,000
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Net Sales $611,873
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Interest Expense $6400
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Cost of Goods Sold $335,555
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Income Taxes $20,026
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Operating Expense $97,000
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Income Taxes $19,200
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Operating Expenses $122,183
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Net Sales $468,065
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Interest Expense $6400
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Interest Expense $6400
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Cost of Goods Sold $287,015
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Operating Expense $104,121
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Cost of Goods Sold $428,354
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Income Taxes $16,775
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Net Sales $511,773
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Required:
*Prepare a multi-step Income Statement for each year
*Prepare a balance sheet for each year using the information given*
*Calculate Working Capital, Return on Investment and Return on Equity Ratios for each year
*Calculate Current Ratio and Acid-Test Ratio for each year
* Conduct a Trend Analysis and write a brief analysis on the financial position of the firm.
Problem Two:
2. The following transactions occurred during the first 30 days of operation of a new services company:
January 1 Owners invested Cash of $25,000
January 3 The Company borrowed $20,000 from a bank
January 4 Equipment was purchased for $12,000 on account
January 5 Office Supplies were purchased for $2600 with Cash
January 7 $2500 Cash was spent on advertising to let the public know about the new company
January 8 Revenue of $7500 was earned on account
January 10 Revenue of $1250 was earned and received as Cash
January 11 Revenue of $1000 was earned on account
January 13 Paid $750 with a check toward Accounts Payable
January 15 Revenue of $6000 was earned on account
January 15 Employee wages of $2750 were paid with Cash
January 16 Revenue of $4300 was earned and received as Cash
January 17 $2500 was spent on advertising with a check
January 18 Received $1500 Check (a check is considered cash) to be applied against on account from customer
January 19 Revenue of $1600 was earned on account
January 20 Paid $750 cash toward Accounts Payable
January 21 Equipment was purchased for $8500 Cash
January 22 Revenue of $10,000 was earned and received as Cash
January 23 Paid $1000 Check toward bank loan
January 24 Paid Utilities bill of $1000 with Check
January 25 Revenue of $3000 was earned on account
January 26 $2500 Cash was spent on advertising
January 27 Paid $800 toward Accounts Payable
January 28 Revenue of $9100 was earned and received as Cash
January 29 Employee Wages of $2750 were paid with Cash
January 30 Paid $1000 Cash toward bank loan
**** If cash (or a check is received) on account, this means that accounts receivable is credited (decreased)
**** If revenue is earned on account, accounts receivable is debited (increased)
**** If cash is paid on account, accounts payable is debited (decreased), while cash is credited (also decreased)
• Prepare journal entries for each of the transactions in either Word or Excel
• Prepare a Chart of Accounts (for example 100 Cash, 101 Accounts Receivable, 102 Equipment, 201 Accounts Payable)
• Set up T accounts in an Excel spreadsheet for each category and record transactions (debits and credits)
• Calculate net income for the month dated January 31, 2014 by preparing a detailed income statement (listing out each individual expense)
• Prepare a balance sheet dated January 31, 2014
• Prepare a short written analysis of your company's financial performance during its first month of operations. Include quantitative data in your summary. A paragraph or two is expected.