Adjust Schedule 3 for Acquisition Values Because the project uses a situation you may encounter in practice, the reported results of New Castle Coffee on 3/31 included in Schedule 3 do not include any adjustments for the acquisition. Remember that the accounting department of New Castle Coffee would keep functioning as if the acquisition never occurred until new values are established. In practice, this is often a number of months following an acquisition to complete the appropriate accounting. s. Using only the Balance Sheet Amounts in Schedule 3, calculate new balances by using the differences identified in Number 4 above and adding/subtracting to Schedule 3 amounts. Only the Cash Account through Retained Earnings are required to be adjusted For example: Land Schedule 3 Reported $50,000 Increase in Acquisition Value + 10,000 Schedule 3 Adjusted $60,000 Schedule 3 Trial Balance of New Castle Coffee as of 03/31/18 Debit 1,500 3,000 21,000 13,765 3,750 50,000 85,000 48,000 16,000 4,687 Accounts WTC Checking WTC money market account Accounts Receivable Allowance for uncollectible accounts Inventory Prepaids rent -current Land Building Equipment Construction in progress Accumulated Depreciation Debt set up costs, net Accounts payable Accrued payroll and benefits Accrued expenses Note payable 12131/16 Advance payable - Java Common stock 1,000 shares, par $1.00 Additional paid in capital Retained earnings(loss) - beginning Sales - coffee Sales - beans Sales - other Allowance for returns - beans Allowance for returns - other Cost of goods sold - coffee Cost of goods sold - beans Cost of goods sold - other Selling expenses Professional fees Depreciation - Buildings (30 years) Depreciation - Equipment (10 years) Bad debt expense Administrative salaries Other SG&A expenses 1,000 400 39,000 10,000 3,600 6,000 4,800 31 1,250 600 12,000 4.000 Total 336,6441 336,6441 Adjust Schedule 3 for Acquisition Values Because the project uses a situation you may encounter in practice, the reported results of New Castle Coffee on 3/31 included in Schedule 3 do not include any adjustments for the acquisition. Remember that the accounting department of New Castle Coffee would keep functioning as if the acquisition never occurred until new values are established. In practice, this is often a number of months following an acquisition to complete the appropriate accounting. s. Using only the Balance Sheet Amounts in Schedule 3, calculate new balances by using the differences identified in Number 4 above and adding/subtracting to Schedule 3 amounts. Only the Cash Account through Retained Earnings are required to be adjusted For example: Land Schedule 3 Reported $50,000 Increase in Acquisition Value + 10,000 Schedule 3 Adjusted $60,000 Schedule 3 Trial Balance of New Castle Coffee as of 03/31/18 Debit 1,500 3,000 21,000 13,765 3,750 50,000 85,000 48,000 16,000 4,687 Accounts WTC Checking WTC money market account Accounts Receivable Allowance for uncollectible accounts Inventory Prepaids rent -current Land Building Equipment Construction in progress Accumulated Depreciation Debt set up costs, net Accounts payable Accrued payroll and benefits Accrued expenses Note payable 12131/16 Advance payable - Java Common stock 1,000 shares, par $1.00 Additional paid in capital Retained earnings(loss) - beginning Sales - coffee Sales - beans Sales - other Allowance for returns - beans Allowance for returns - other Cost of goods sold - coffee Cost of goods sold - beans Cost of goods sold - other Selling expenses Professional fees Depreciation - Buildings (30 years) Depreciation - Equipment (10 years) Bad debt expense Administrative salaries Other SG&A expenses 1,000 400 39,000 10,000 3,600 6,000 4,800 31 1,250 600 12,000 4.000 Total 336,6441 336,6441