ACC 214- Chapter 1 Assignment Instructions 1. Record the transactions listed below in the accompanying Excel worksheet. Note that the worksheet has separate accounts under Retained Earnings. When the company earns revenue, you should show the revenue as an increase to the Sales Revenue account. When the company incurs an expense, show the expense as a negative number in the specific expense account because expenses cause Retained Earnings to decrease. Example: if the company sells inventory for cash, cash will go up and revenue (under retained earnings) goes up. At the same time, the inventory will go down (under assets) and the expense (CGS) causes retained earnings to go down. Accounting events: a. Acquired $750,000 cash by issuing common stock. b. Purchased $350,000 of manufacturing equipment. The equipment has a $30,000 salvage value and a 4-year estimated useful life. c. Recorded depreciation on the manufacturing equipment. (Use straight-line depreciation and assume that the asset was purchased on January 1 of the year.) d. The company started and completed work on 5,000 units of product. Direct materials purchased and immediately used amounted to $40 per unit, paid in cash. e. Direct labor costs incurred to produce the units amounted to $25 per unit, paid in cash. f. The cost of manufacturing supplies purchased for cash and immediately used amounted to $4 per unit. . The company paid $50,000 to rent the manufacturing facility. h. The company sold 2500 of the 5000 units it produced (half of the units) at a cash price of $240 per unit. Record the sales revenue i. Record the cost of goods sold to MATCH the costs of producing the units against the revenue recorded in (h) above. j. Paid the sales staff $6 per unit of sales commission. k. Purchased office equipment costing $24,000 for cash -- the equipment is for the administrative offices. Estimated salvage value is $3,000. Estimated useful life is 3 years. 1. Record depreciation on the office equipment. (straight-line, full year depreciation) m. Administrative expenses for office rent and office salaries total $82,560. 2. Use Excel to calculate the totals of all of the accounts (row 25 in spreadsheet). 3. Prepare the Income Statement and Balance Sheet on the prepared forms. Using references back to cells on the worksheet, put the totals of each account (except for Retained Earnings) in the appropriate spot on the Income Statement or Balance Sheet. (For instance, instead of copying the dollar amount of the total for cash, use =B25, the cell reference.) For Retained Earnings, you will have to calculate the ending balance using Excel-- remember that revenues and expenses are closed into retained earnings. For subtotals and Yellow cells require formulas/cell references