1/13/14 Serial Problem - 10

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1. value: 10.00 points

Serial Problem - 10 instructions | help

On October 1, 2011, Santana Rey launched a computer services company, Business Solutions, that is organized as a corporation and provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company's first set of financial statements on December 31, 2011.

Oct. 1 S. Rey invested $50,000 cash, a $23,000 computer system, and $8,500 of office equipment in the company in exchange for common stock.

3 The company purchased $1,420 of computer supplies on credit from Harris Office Products. 6 The company billed Easy Leasing $5,500 for services performed in installing a new Web server. 8 The company paid $1,420 cash for the computer supplies purchased from Harris Office

Products on October 3. 10 The company hired Lyn Addie as a part-time assistant for $145 per day, as needed (paid weekly). 12 The company billed Easy Leasing another $1,400 for services performed. 15 The company received $5,500 cash from Easy Leasing as partial payment toward its account. 17 The company paid $710 cash to repair computer equipment damaged when moving it. 20 The company paid $1,683 cash for advertisements published in the local newspaper. 22 The company received $1,400 cash from Easy Leasing toward its account. 28 The company billed IFM Company $5,228 for services performed. 31 The company paid $1,015 cash for Lyn Addie's wages for seven days of work this month. 31 The company paid $2,900 cash for dividends.

Required: Enter the amount of each transaction on individual items of the accounting equation. Show new balances after each transaction. (Leave no cells blank - be certain to enter "0" wherever required. Amounts to be deducted, withdrawals and expenses should be indicated with a minus sign. Omit the "$" sign in your response.)

Assets Liabilities Equity

Date Cash + Accounts Receivable +

Computer Supplies + Computer System + Office Equipment =

Accounts Payable + Common Stock − Dividends + Revenues − Expenses

Oct. 1 $ $ $ $ $ $

$ $ $ $

3

Bal.

6

Bal.

8

Bal.

10

Bal.

12

Bal.

15

Bal.

17

Mariana CorreaACG 2071 Lab Class: ACG 2071 Lab - SPRING 2013-2

1/13/14 Serial Problem - 10

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Bal.

20

Bal.

22

Bal.

28

Bal.

31

Bal.

31

Bal. $ $ $ $ $ $

$ $ $ $

check my w ork eBook Links (2) references

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It is the end of a reporting period. Because there are more people than usual retiring this year, your manager has asked your accounting department to create 2 things:

· A process documentation detailing the different methods of preparing income statements, specific sections of the income statement, and how to handle the special types of income statement items

· Basic financial statements for your company

Individual Portion:

1. Visit the SEC's Web site (http://idea.sec.gov/idea/searchidea/companysearch_idea.html).

· Select a company filing of your choice that contains a multiple-step income statement.

· Communicate your selection with your group (each of you should submit a different company).

· Submit the link to this filing as proof of your research.

2. Prepare a process documentation that

· is prepared in a professional manner because it will be the desktop guide used by others in the event of your absence to prepare the financial statements for Music Warehouse.

· is in the form of a memorandum or as a numbered listing of items, depending on your individual preference.

· includes the following elements:

· a definition and description of the specific sections of the income statement

· a description of the different methods of preparing income statements

· an explanation of the conceptual guidelines for reporting income

· how to handle the special types of income statement items

Please add your file.

Group Portion:

Using the information below, do the following:

· Prepare a multiple-step income statement for Music Warehouse.

· Prepare a statement of changes in stockholder's equity for Music Warehouse.

You may work together, or you may assign each group member a different financial statement or part of the assignment to work on.

Music Warehouse

Adjusted Trial Balance

December 31, 2008

 

 

Debit

Credit

Cash

$24,675

 

Accounts Receivable

5,625

 

Inventory

65,980

 

Land

93,000

 

Building

289,000

 

Accumulated Depreciation

 

75,000

Notes Payable

 

85,000

Accounts Payable

 

53,600

Interest Payable

 

4,750

Common Stock

 

10,000

Additional Paid-in Capital

 

120,000

Dividends

10,000

 

Retained Earnings

 

59,980

Sales

 

937,500

Sales Discounts

22,675

 

Cost of Goods Sold

723,000

 

Salaries

81,000

 

Utilities

8,900

 

Repairs & Maintenance

5,225

 

Telephone

2,850

 

Interest Expense

4,400

 

Depreciation Expense

9,500

 

 

 

 

 

$1,345,830

$1,345,830

The following is additional information needed for financial-statement preparation:

· Loss as a result of hurricane damage on the building: $17,000 (assume that the building is not located in an area that sustains frequent hurricane damage.)

· Loss because of the discontinuation of the cassette tape music segment: $26,875

· Beginning of the year balance of common stock: $8,000 (assume that changes are related to issuance of common stock.)

· Beginning of the year balance of additional paid-in capital: $102,000

· Effective income tax rate: 35%

Please add your file.

The following grading criteria will apply to this assignment:

Grading Criteria

Individual Portion

Submit a link to a company filing of your choice that contains a multiple-step income statement as proof of your research.

10%

Prepare process documentation that

· is prepared in a professional manner because it will be the desktop guide used by others in the event of your absence to prepare the financial statements for Music Warehouse.

· is in the form of a memorandum or as a numbered listing of items, depending on your individual preference.

· includes the following:

· a definition and description of the specific sections of the income statement

· a description of the different methods of preparing income statements

· an explanation of the conceptual guidelines for reporting income

· how to handle the special types of income statement items

30%

Group Portion

Prepare a multiple-step income statement for Music Warehouse.

30%

Prepare a statement of changes in stockholder's equity for Music Warehouse.

30%

TOTAL 

100%

This assignment will be assessed using the rubric provided  here .

For assistance with your assignment, please use your text, Web resources, and all course materials.

Unit Materials

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