Financial Accounting (ACC201)

7-2 Project: Company Accounting Workbook and Summary ReportSummary: Write a summary of what the financial statements indicate about the company’s financial health and performance. Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user. Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data. Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning. Analysis: Explain the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets position. Results: Discuss the results regarding profitability of the first month of operations. Consider how well the company is positioned to meet current liabilities. Be sure to include the percentage of revenues that result in profit/net income and the current ratio when discussing profitability and liquidity based on the recorded month’s results. Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profit/net income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)? Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of their financial data as they anticipate further growth. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion. Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet. Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined. Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising. Consider how accounting will change with the addition of merchandise inventory.

7-2 Project: Company Accounting Workbook and Summary Report Summary: Write a summary of what the financial statements indicate about the company’s financial health and performance. June 1: Owner contributed $50,000 in cash to the business. Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user. Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data. Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning. Analysis: Explain the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets position. Results: Discuss the results regarding profitability of the first month of operations. Consider how well the company is positioned to meet current liabilities. Be sure to include the percentage of revenues that result in profit/net income and the current ratio when discussing profitability and liquidity based on the recorded month’s results. Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profit/net income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)? Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of their financial data as they anticipate further growth. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion. Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet. Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined. Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising. Consider how accounting will change with the addition of merchandise inventory.

Dividends Per Share Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 3% stock, $20 par and 410,000 shares of $25 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $31,000; second year, $72,000; third year, $100,000; fourth year, $120,000. Determine the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00".   1st Year 2nd Year 3rd Year 4th Year Preferred stock (dividends per share) $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 Common stock (dividends per share) fill in the blank 5 fill in the blank 6 fill in the blank 7 fill in the blank 8 Feedback Area Feedback Is the preferred stock cumulative or non-cumulative stock? Determine what amount of current dividends that preferred stock should receive per year. Is the question asking for a per-share amount or total amount per class of stock?

A truck acquired at a cost of $385,000 has an estimated residual value of $19,800, has an estimated useful life of 44,000 miles, and was driven 4,400 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year $fill in the blank 3

Proceeds from Notes Payable On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $64,800. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 7%. $fill in the blank 1 b. Determine the proceeds of the note, assuming the note is discounted at 7%. $fill in the blank 2

Bennett Enterprises issues a $756,000, 45-day, 9%, note to Spectrum Industries for merchandise inventory. Assume a 360-day year. If required, round your answers to the nearest dollar.If an amount box does not require an entry, leave it blank. Question Content Area a. Journalize Bennett Enterprises’ entries to record: the issuance of the note. the payment of the note at maturity. 1. 2. b. Journalize Spectrum Industries’ entries to record: the receipt of the note. the receipt of the payment of the note at maturity. 1. 2.