1. The company purchased $7,500,000 of raw material inventory on account. "On account" means that their suppliers have not yet been paid. That is, Mountain View Manufacturing Company has an additional "Account Payable" for the inventory purchase.
2. During the year, the company incurred $6,000,000 of factory wages. When wages relate to the production of a company's inventory, the wage costs are added to the inventory account. For now, assume that the wages have not been paid.
3. The company sold in inventory that cost $14,000,000 for a total of $22,000,000. Of that, $17,000,000 was received in cash and $5,000,000 was on account (that is, added to accounts receivable).
4. The company paid $8,200,000 to suppliers for inventory it had previously purchased on account. That is, it paid $8,200,000 of accounts payable.
5. The company collected $4,100,000 of accounts receivable.
6. The company incurred sales and marketing expenses of $1,505,431, general and administrative expenses of $2,044,569, and retail operating expenses of $1,750,000. They paid $2,000,000 in cash and $3,300,000 was added to other accrued expenses.
7. The company paid $6,423,789 to employees for wages that had been previously accrued.
8. Mountain View Manufacturing Company received $125,000 in cash from new franchisees. The company must provide services to the franchisees over the next five years. As such, the fees are considered deferred income.
9. The company paid $498,832 for new property and equipment.
10. During the year, the company declared $2,407,167 of dividends on its common shares. They paid $2,403,458 doting the fiscal year. The difference, $3,709, will be paid in the following fiscal year.
11. Many other transactions were recorded during the year. They are summarized in the spreadsheet.
Required-
a. Prepare journal entries for No. 1 ~ 10, as needed, for each of the above fiscal 2013 "transactions". You should include explanations. All figures are in thousands of dollars.
b. Post the journal entries for the transactions to the spreadsheet. (You have to make your own spreadsheet.)
c. Prepare an unadjusted trial balance from the spreadsheet. (Hint: the unadjusted balance for retained earnings in $3,343,850.)
d. Prepare journal entries for the following adjustments, No. 12 ~ 15. You should include explanations.
12. Mountain View Manufacturing Company employees took a physical count of inventory on February 29, 2016. The cost of inventory in the company's possession on that date was $3,281,447.
13. Depreciation and amortization expense on property and equipment was $698,580 for the fiscal year.
14. At year end, the company determined that $646,156 of wages were earned but remained unpaid. Of that total, $639,200 relates to general and administrative expenses and $6,956 relates to retail operating expenses.
15. In February 2016, a consulting firm hired by Mountain View Manufacturing Company issued a report stating that the "Mountain View Manufacturing" brand name is worth $500,000.
e. Post the journal entries for the adjustments to the spreadsheet and complete the pre-closing trail balance column.
f. Prepare an income statement for the year ended February 29, 2016.
g. Prepare the closing entries and close all the temporary accounts on the income statement to Retained earnings. You should include explanations. Complete the post- closing (ending) balance column. Verify that the amounts for the balance sheet accounts in the post-closing balance column match the amounts in the actual February 29, 2016 financial statement column.
h. Prepare the February 29, 2016, balance sheet.
Attachment:- Assignment.rar