ACC T495 Capstone Project Fall 2019 Part 1 Adjusting entries & Statements 12/31/2019 Year-end Adjustment Data for Bruce and Emmett Corp is as follows: 1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Bruce and Emmett use a perpetual inventory system. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $150 per day. A total of 500 earned vacation days will be carried over to 2020. It is probable that the employees will take the vacation days. Accrued wages at December 31, 2019 amount to $50,000. You discover that a product sale was made and recorded in December for $50,000, the product had not yet been shipped. The cost of the product was $24,000 5. The Prepaid Expense account balance includes the $24,000 cost of a two year insurance policy purchased on April 1, 2019. (Prepaid Expense was debited for $24,000 on April 1, 2019) Depreciation & Amortization expense for the year is $150,000 Interest expense accrued on its long-term liabilities is $35,000. A dividend of $40,000 was declared on December 16, to be paid on January 15, 2020 It is estimated that 5% of accounts receivable will be uncollectable. 10. Income tax expense is 30% of income before income tax. INSTRUCTIONS: A. Record the adjusting journal entries B. Compute the adjusted trial balance amounts C. Prepare in good form: a. Multiple Step Income Statement with an other gains and losses section b. Balance Sheet c. Retained Earnings Statement D. Compute the following ratios: Current Ratio, Profit Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share E. Record Closing Entries Adjustments 12/31/2019 Debit Credit Adjusted Balance 12/31/2019 Debit Credit Credit 1 300,000 $ 25,000 50,000 55,000 140,000 12,000 1 24,000 $ 457,500 150,000 50,000 1,144,925 80,000 18,000 12,550 50,000 187,500 35,000 75,000 Bruce and Emmett Corporation Unadjusted Balances 12/31/2019 Debit 101 Cash 425,000 102 Cash Equivalents $ 38,000 103 Accounts Receivable 825,000 104 Allowance for Doubtful Accounts 105 Inventory 1,375,000 106 Prepaid expenses 122,593 107 Other Current Assets 25,531 121 Equipment 487,000 122 Building 875,000 123 Land 310,000 124 Accumulated Depreciation 125 Investments 675,868 131 Goodwill 175,000 132 Other Intangible Assets 250,000 201 Accounts Payable 202 Wages Payable 204 Payroll taxes payable 205 Interest Payable 206 Dividends Payable 207 Unearned Revenue 210 Income Tax payable 212 Compensated Absence Payable 221 Long Term Liabilities 301 Common Stock ($10 par) 302 Paid-in Capital Common Stock 310 Dividends $ 50,000 315 Treasury Stock 250,000 320 Retained Earnings 401 Product Sales Revenue 402 Service Revenue 403 Sales Returns 162,500 404 Sales Discounts 269,500 420 Investment Income 421 Gain/Loss on Disposal 501 Cost of Goods Sold 5,100,000 601 Office Expenses 215,000 602 Bad debts expenses 603 Equipment Repair Expense 150,000 604 Advertising Expense 168,500 605 Depreciation Expense 607 Legal Fees 205,000 608 Office Wages Expense 400,000 609 Accounting Consultants 100,000 610 Property Taxes 107,831 611 Maintenance Expense 42,500 612 Dues and subscriptions Expense 22,960 613 Telephone Expense 20,199 614 Utilities Expenses 78,000 615 Wages Expense 962,000 688,500 735,000 157,500 $ $ $ 369,700 9,280,673 1,542,678 1 50,000 300,000 $ 28,290 1 140,000 24,000 55,000 150,000 75,000 50,000 $ 220,000 290,000 85,000 12,000 616 Travel & Entertainment Expense 617 Research & Development 618 Insurance Expense 619 Income Tax Expense 620 Payroll taxes Expense 625 Compensated Absence Expense 695 Interest Expense 699 Miscellaneous Expense 168,488 $ 47,500 78,846 Totals $ 14,777,816 $ 14,777,816 ACC T495 Capstone Project Fall 2019 Part 1 Adjusting entries & Statements 12/31/2019 Year-end Adjustment Data for Bruce and Emmett Corp is as follows: 1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Point on December 31. The cost of this inventory was $140,000. Bruce and Emmett use a perpetual inventory system. Employees are allowed to carry over up to 10 days of earned vacation days per year up to 40 days. Employees earn an average of $150 per day. A total of 500 earned vacation days will be carried over to 2020. It is probable that the employees will take the vacation days. Accrued wages at December 31, 2019 amount to $50,000. You discover that a product sale was made and recorded in December for $50,000, the product had not yet been shipped. The cost of the product was $24,000 5. The Prepaid Expense account balance includes the $24,000 cost of a two year insurance policy purchased on April 1, 2019. (Prepaid Expense was debited for $24,000 on April 1, 2019) Depreciation & Amortization expense for the year is $150,000 Interest expense accrued on its long-term liabilities is $35,000. A dividend of $40,000 was declared on December 16, to be paid on January 15, 2020 It is estimated that 5% of accounts receivable will be uncollectable. 10. Income tax expense is 30% of income before income tax. INSTRUCTIONS: A. Record the adjusting journal entries B. Compute the adjusted trial balance amounts C. Prepare in good form: a. Multiple Step Income Statement with an other gains and losses section b. Balance Sheet c. Retained Earnings Statement D. Compute the following ratios: Current Ratio, Profit Margin on Sales, Debt to Assets, Earnings per Share, and Book Value per share E. Record Closing Entries Adjustments 12/31/2019 Debit Credit Adjusted Balance 12/31/2019 Debit Credit Credit 1 300,000 $ 25,000 50,000 55,000 140,000 12,000 1 24,000 $ 457,500 150,000 50,000 1,144,925 80,000 18,000 12,550 50,000 187,500 35,000 75,000 Bruce and Emmett Corporation Unadjusted Balances 12/31/2019 Debit 101 Cash 425,000 102 Cash Equivalents $ 38,000 103 Accounts Receivable 825,000 104 Allowance for Doubtful Accounts 105 Inventory 1,375,000 106 Prepaid expenses 122,593 107 Other Current Assets 25,531 121 Equipment 487,000 122 Building 875,000 123 Land 310,000 124 Accumulated Depreciation 125 Investments 675,868 131 Goodwill 175,000 132 Other Intangible Assets 250,000 201 Accounts Payable 202 Wages Payable 204 Payroll taxes payable 205 Interest Payable 206 Dividends Payable 207 Unearned Revenue 210 Income Tax payable 212 Compensated Absence Payable 221 Long Term Liabilities 301 Common Stock ($10 par) 302 Paid-in Capital Common Stock 310 Dividends $ 50,000 315 Treasury Stock 250,000 320 Retained Earnings 401 Product Sales Revenue 402 Service Revenue 403 Sales Returns 162,500 404 Sales Discounts 269,500 420 Investment Income 421 Gain/Loss on Disposal 501 Cost of Goods Sold 5,100,000 601 Office Expenses 215,000 602 Bad debts expenses 603 Equipment Repair Expense 150,000 604 Advertising Expense 168,500 605 Depreciation Expense 607 Legal Fees 205,000 608 Office Wages Expense 400,000 609 Accounting Consultants 100,000 610 Property Taxes 107,831 611 Maintenance Expense 42,500 612 Dues and subscriptions Expense 22,960 613 Telephone Expense 20,199 614 Utilities Expenses 78,000 615 Wages Expense 962,000 688,500 735,000 157,500 $ $ $ 369,700 9,280,673 1,542,678 1 50,000 300,000 $ 28,290 1 140,000 24,000 55,000 150,000 75,000 50,000 $ 220,000 290,000 85,000 12,000 616 Travel & Entertainment Expense 617 Research & Development 618 Insurance Expense 619 Income Tax Expense 620 Payroll taxes Expense 625 Compensated Absence Expense 695 Interest Expense 699 Miscellaneous Expense 168,488 $ 47,500 78,846 Totals $ 14,777,816 $ 14,777,816