Financial-Accounting-Tools-for-Business-Decision-Making
Assignment 1 steps
Resources: Financial Accounting: Tools for Business Decision Making
Scenario: An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years.
|
SIMON COMPANY Income Statement |
|
|
Revenues |
|
|
Net sales |
$850,000 |
|
Other revenues |
22,000 |
|
872,000 |
|
|
Cost of goods sold |
555,000 |
|
Gross profit |
317,000 |
|
Operating expenses |
|
|
Selling expenses |
109,000 |
|
Administrative expenses |
103,000 |
|
212,000 |
|
|
Net earnings |
$105,000 |
As an experienced, knowledgeable accountant, you review the statement and determine the following facts:
1.Net sales consist of: sales $911,000, less freight-out on merchandise sold $33,000, and sales returns and allowances $28,000.
2.Other revenues consist of sales discounts $18,000 and rent revenue $4,000.
3.Selling expenses consist of salespersons’ salaries $80,000, depreciation on equipment $10,000, advertising $13,000, and sales commissions $6,000. The commissions represent commissions paid. At December 21, $3,000 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense.
4.Administrative expenses consist of office salaries $47,000, dividends $18,000, utilities $12,000, interest expense $2,000, and rent expense $24,000, which includes prepayments totaling $6,000 for the first quarter of 2018.
Prepare a detailed multi-step income statement. Provide notes to the income statement providing an explanation for the manner in which the multi-step income statement was structured and changes made to the condensed income statement. Complete the income statement and notes in 500 words. Assume a 25% tax rate.
Show your work on the Excel® spreadsheet, using Excel formulas and submit.
Assignment 2 Complete Problem P4-7A in Financial Accounting (p. 204-205) in the
Excel spreadsheet. Use Excel formulas to calculate results.
Use the Excel spreadsheet to record your answers and submit with
your responses.
P4-7A On November 1, 2017, the following were the account balances of Soho Equipment Repair.
During November, the following summary transactions were completed.
|
Nov. |
8 |
Paid $1,220 for salaries due employees, of which $600 is for November and $620 is for October salaries payable. |
|
10 |
Received $1,800 cash from customers in payment of account. |
|
|
12 |
Received $3,700 cash for services performed in November. |
|
|
15 |
Purchased store equipment on account $3,600. |
|
|
17 |
Purchased supplies on account $1,300. |
|
|
20 |
Paid creditors $2,500 of accounts payable due. |
|
|
22 |
Paid November rent $480. |
|
|
25 |
Paid salaries $1,000. |
|
|
27 |
Performed services on account worth $900 and billed customers. |
|
|
29 |
Received $750 from customers for services to be performed in the future. |
Adjustment data:
- Supplies on hand are valued at $1,100.
- Accrued salaries payable are $480.
- Depreciation for the month is $250.
- Services were performed to satisfy $500 of unearned service revenue.
Instructions
(a) Enter the November 1 balances in the ledger accounts. (Use Tâ€accounts.)
(b) Journalize the November transactions.
(c) Post to the ledger accounts. Use Service Revenue, Depreciation Expense, Supplies Expense, Salaries and Wages Expense, and Rent Expense.
(d) Prepare a trial balance at November 30.
(e) Journalize and post adjusting entries.
(f) Prepare an adjusted trial balance.
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