Acc280 Financial Accounting: Continuing Cookie Chronicle 4 (CCC4) - as proprietorship

Continuing Cookie Chronicle 4 (CCC4)

Note that this is a rather difficult problem. You are asked to prepare financial statements and prepare and post closing entries, but you were not given the specific transactions for December. Instead, you are given the Adjusted Trial Balance for Dec. 31. I recommend that you take the balances on the ATB and write them in the correct ledger accounts. Just make a note to yourself in each ledger that this is the "Dec. 31 balance." Of course, if we were REALLY doing a set of books, we would have posted the entries for Dec. and this wouldn't be necessary.

Natalie had a very busy December.At the end of the month,after journalizing and post­ing the December transactions and adjusting entries. Natalie prepared the following adjusted trial balance.

COOKIE CREATIONS
Adjusted Trial Balance
December 31, 2009
Debit Credit
Cash $1,180
Accounts Receivable 875
Baking Supplies 350
Prepaid Insurance 1,210
Baking Equipment 1,200
Accumulated Depreciation - Baking Equipment $ 40
Accounts Payable 75
Salaries Payable 56
Interest Payable 15
Unearned Revenue 300
Notes Payable 2,000
N. Koebel, Capital 800
N. Koebel, Drawing 500
Teaching Revenue 4,515
Salaries Expense 1,006
Telephone Expense 125
Advertising Supplies Expense 165
Baking Supplies Expense 1,025
Depreciation Expense 40
Insurance Expense 110
Interest Expense 15
                            $7,801 $7,801

Instructions:

Using the information in the adjusted trial balance, do the following.

(a) Prepare an income statement and a statement of owner’s equity for the 2 months ended December 31, 2009, and a classified balance sheet as at December 31, 2009. The note payable has a stated interest rate of 6%, and the principal and interest are due on November 16, 2011.

(b) Natalie has decided that her year-end will be December 31, 2009. Prepare and post closing entries as of December 31, 2009.

(c) Prepare a post-closing trial balance.

BUY:  Continuing Cookie Chronicle 4 (CCC4)

Chapter 5 - Continuing Cookie Chronicle 5 (CCC5) - as proprietorship

Continuing Cookie Chronicle 5 (CCC5)

Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is the sale of fine European mixers. The owner of Kzinski Supply Co. has approached Natalie to become the exclusive distributor of these fine mixers in her state. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified. In the end, Natalie decides to use the perpetual inventory system to track her inventory.

The following transactions happen during the month of January.
Date Transaction
Jan 4 Bought five deluxe mixers on account from Kzinski Supply Co. for $2,875, FOB shipping point, terms n/30.
6 Paid $100 freight on the January 4 purchase.
7 Returned one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of mixer plus $20 for the cost of freight that was paid on January 6 for one mixer
8 Collected $375 of the accounts receivable from December 2009.
12 Three deluxe mixers are sold on account for $3,450, FOB destination, terns n/30. (Cost of goods sold is $595 per mixer.)
14 Paid the $75 of delivery charges for the three mixers that were sold on January 12.
14 Bought four deluxe mixers on account from Kzinski Supply Co. for $2,300, FOB ship ping point, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She invests an additional $1,000 cash in Cookie Creations.
18 Paid $80 freight on the January 14 purchase
20 Sold two deluxe mixers for $2,300 cash. (Cost of goods sold is $595 per mixer.)
28 Natalie issued a check to her assistant for all the help the assistant has given her during the month. Her assistant worked 20 hours in January and is also paid the $56 owed at December 31, 2009. (Natalie’s assistant earns $8 an hour.)
28 Collected the amounts due from customers for the January 12 transaction.
30 Paid a $145 cellphone bill ($75 for the December 2009 account payable and $70 for the month of January). (Recall that the cellphone is used only for business purposes.)
31 Paid Kzinski all amounts due.
31 Natalie withdrew $750 cash for personal use.

As of January 31, the following adjusting entry data is available.

1. A count of baking supplies reveals that none were used in January.

2. Another month’s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months and no salvage value.)

3. An additional month’s worth of interest on her grandmother’s loan needs to be accrued. (The interest rate is 6%.)

4. During the month, $110 of insurance has expired.

5. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result, there is no change to the unearned revenue account. Natalie hopes to complete the remaining lessons in February.

6. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining.

Instructions

Using the information from previous chapters and the new information above, do the following.

(a) Prepare and post the January 2010 transactions.

(b) Prepare a trial balance.

(c) Prepare and post the adjusting journal entries required.

(d) Prepare an adjusted trial balance.

(e) Prepare a multiple-step income statement for the month ended January 31, 2010. 

BUY:  Continuing Cookie Chronicle 5 (CCC5)

Acc280 Financial Accounting: Comprehensive Problem: Appendix G - Julie Molony, Julie’s Maids Cleaning Service Inc

Comprehensive Problem

Appendix G

Julie Molony opened Julie’s Maids Cleaning Service Inc. on July 1, 2008. During July, the company completed the following transactions. July 1 Issued $14,000 of common stock for $14,000 cash.

1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.

3 Purchased cleaning supplies for $800 on account.

5 Paid $1,800 on a one-year insurance policy, effective July 1.

12 Billed customers $3,800 for cleaning services.

18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.

20 Paid $1,600 for employee salaries.

21 Collected $1,400 from customers billed on July 12.

25 Billed customers $1,500 for cleaning services.

31 Paid gas and oil for the month on the truck, $400.

31 Paid a $600 cash dividend.

The chart of accounts for Julie’s Maids Cleaning Service contains the following accounts:No. 101 Cash, No. 112 Accounts Receivable, No. 128 Cleaning Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries Payable,No. 311 Common Stock,No. 320 Retained Earnings,No. 332 Dividends, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gas & Oil Expense, No. 634 Cleaning Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries Expense.

Instructions

(a) Journalize and post the July transactions. Use page J1 for the journal.

(b) Prepare a trial balance at July 31 on a worksheet.

(c) Enter the following adjustments on the worksheet, and complete the worksheet.

(1) Earned but unbilled fees at July 31 were $1,300.

(2) Depreciation on equipment for the month was $200.

(3) One-twelfth of the insurance expired.

(4) An inventory count shows $100 of cleaning supplies on hand at July 31.

(5) Accrued but unpaid employee salaries were $500.

(d) Prepare the income statement and a retained earnings statement for July, and a classified balance sheet at July 31, 2008.

(e) Journalize and post the adjusting entries. Use page J2 for the journal.

(f ) Journalize and post the closing entries, and complete the closing process. Use page J3 for the journal.

(g) Prepare a post-closing trial balance at July 31.

BUY:  Appendix G - Julie's Maid Cleaning Services

Continuing Cookie Chronicle 5 (CCC5) - 2010 New Version

Continuing Cookie Chronicle (New Version - 2010)
(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 4.)

CCC5 Because Natalie has had such a successful first few months, she is considering other opportunities to develop her business. One opportunity is to become the exclusive distributor of a line of fine European mixers. The current cost of a mixer is approximately $575, and Natalie would sell each one for $1,150. Natalie comes to you for advice on how to account for these mixers. Each appliance has a serial number and can be easily identified.

Natalie asks you the following questions.
1. “Would you consider these mixers to be inventory? Or, should they be classified as supplies or equipment?”
2. “I’ve learned a little about keeping track of inventory using both the perpetual and the periodic systems of accounting for inventory. Which system do you think is better? Which one would you recommend for the type of inventory that I want to sell?”
3. “How often do I need to count inventory if I maintain it using the perpetual system? Do I need to count inventory at all?”

In the end, Natalie decides to use the perpetual method of accounting for inventory, and the following transactions happen during the month of January.
Jan. 4 She buys five deluxe mixers on account from Kzinski Supply Co. for $2,875, terms n/30.
6 She pays $100 freight on the January 4 purchase.
7 Natalie returns one of the mixers to Kzinski because it was damaged during shipping. Kzinski issues Cookie Creations credit for the cost of the mixer plus $20 for the cost of freight that was paid on January 6 for one mixer.
8 She collects the amount due from the neighborhood community center that was accrued at the end of December 2009.
12 She sells three deluxe mixers on account for $3,450, FOB destination, terms n/30. The mixers cost $595 each (including freight).
13 Natalie pays her cell phone bill previously accrued in the December adjusting journal entries.
14 She pays $75 of delivery charges for the three mixers that were sold on January 12.
14 She buys four deluxe mixers on account from Kzinski Supply Co. for $2,300, terms n/30.
17 Natalie is concerned that there is not enough cash available to pay for all of the mixers purchased. She issues additional common stock for $1,000.
18 She pays $80 freight on the January 14 purchase.
20 She sells two deluxe mixers for $2,300 cash.
28 Natalie issues a check to her assistant. Her assistant worked 20 hours in January and is also paid for amounts owing at December 31, 2009. Recall that Natalie’s assistant earns $8 an hour.
28 Natalie collects amounts due from customers in the January 12 transaction.
31 She pays Kzinski all amounts due.
31 Cash dividends of $750 are paid.

As of January 31, the following adjusting entry data are available.
1. A count of brochures and posters reveals that none were used in January.
2. A count of baking supplies reveals that none were used in January.
3. Another month’s worth of depreciation needs to be recorded on the baking equipment bought in November. (Recall that the baking equipment has a useful life of 5 years or 60 months.)
4. One month’s worth of amortization (write-off) needs to be recorded on the website.
(Recall that the website has a useful life of 2 years or 24 months.)
5. An additional month’s worth of interest on her grandmother’s loan needs to be accrued.  (The interest rate is 9%.)
6. One month’s worth of insurance has expired.
7. Natalie receives her cell phone bill, $75. The bill is for services provided in January and is due February 15. (Recall that the cell phone is used only for business purposes.)
8. An analysis of the unearned revenue account reveals that Natalie has not had time to teach any of these lessons this month because she has been so busy selling mixers. As a result there is no change to the unearned revenue account. Natalie hopes to book the outstanding lessons in February.
9. An inventory count of mixers at the end of January reveals that Natalie has three mixers remaining.

Instructions

Using the information that you have gathered and the general ledger accounts that you have prepared through Chapter 4, plus the new information above, do the following.
(a) Answer Natalie’s questions.
(b) Prepare and post the January 2010 transactions.
(c) Prepare a trial balance.
(d) Prepare and post the adjusting journal entries required.
(e) Prepare an adjusted trial balance.
(f) Prepare a multiple-step income statement and retained earnings statement for the month ended January 31, 2010.
(g) Prepare a classified balance sheet as of January 31, 2010.

BUY:  Continuing Cookie Chronicle 5 (CCC5)

Managerial Accounting Exercise 1-6 (Identifying product costs in a manufacturing company) Tiffany Crissler

Exercise 1-6 Identifying product costs in a manufacturing company

Tiffany Crissler was talking to another accounting student, Bill Tyrone. Upon discovering that the accounting department offered an upper-level course in cost measurement, Tiffany remarked to Bill, "How difficult can it be? My parents own a toy store. All you have to do to figure out how much something costs is look at the invoice. Surely you don't need an entire course to teach you how to read an invoice."

Required

a. Identify the three main components of product cost for a manufacturing entity.

b. Explain why measuring product cost for a manufacturing entity is more complex than measuring product cost for a retail toy store.

c. Assume that Tiffany's parents rent a store for $7,500 per month. Different types of toys use different amounts of store space. For example, displaying a bicycle requires more store space than displaying a deck of cards. Also, some toys remain on the shelf longer than others. Fad toys sell quickly, but traditional toys sell more slowly. Under these circumstances, how would you determine the amount of rental cost required to display each type of toy? Identify two other costs incurred by a toy store that may be difficult to allocate to individual toys.

Tutorial:  E1-6 Tiffany Crissler

Acc346 Managerial Accounting (Week 6 Quiz) - The following information relates to Vice Versa Ventures

Acc346 Managerial Accounting (Week 6 Quiz)

(TCO 5) The following information relates to Vice Versa Ventures for calendar year 20XX, the company's first year of operations:

Units produced                20,000

Units sold                17,000

Selling price per unit                      35

Direct material per unit                        5

Direct labor per unit                        5

Variable manufacturing overhead per unit                        2

Variable selling cost per unit                        3

Annual fixed manufacturing overhead              160,000

Annual fixed selling and administrative expense                80,000

(a) Prepare an income statement using full costing.

(b) Prepare an income statement using variable costing.

Tutorial:  Vice Versa Ventures

Acc346 Managerial Accounting (Week 6 Quiz) - Thurman Munster, the owner of Adams Family RVs

Acc346 Managerial Accounting (Week 6 Quiz)

(TCO 9) Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot.  The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster's required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue                              450,000

Less:  Material cost                60,000

Labor                                    100,000

Depreciation                         110,000

Other                                       10,000

280,000

Income before taxes              170,000

Taxes at 40%                          68,000

Net income                $           102,000

Requirements:

(a) Determine the net present value of the investment in the service center. Should Munster invest in the service center?

(b) Calculate the internal rate of return of the investment to the nearest ½ percent.

(c) Calculate the payback period of the investment.

(d) Calculate the accounting rate of return.

Tutorial:  Adams Family RVs