Assessment 1: Weighting: 10% Due Date: March 27, 2020 @ 11:55 PM Related Course Objectives: Assignment Description and Instructions Suppose you are a part of a group of students from a prominent university and were sent out as a team to work with a leading merchandizing company as a part of a work experience program. The team having been introduced to the general manger was told that the Accountant who normally prepares the financial statements has suddenly resigned and there is no one available to prepare the company's financial statements which are now due. As aspiring university students, you and your group members have expressed an interest in taking on the task. As a group, you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company's financial statements. The problem to be resolved: The following trial balance was extracted from the books of Scholes Farm Ltd December 31, the end of the company's financial year. The company is owned by Paul Scholes and is in the business of buying and farming supplies Trial Balance as at December 31, 2017 Trial Balance as at December 31, 2017 Trial Balance DR CR 1,000,000 450,000 15,000 186,000 120,000 450.000 1,000,000 360,000 600,000 320,000 A/C Name Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Insurance Furniture and Fixtures Accumulated depreciation - Furniture and Fixtures Computer Equipment Accumulated depreciation Computer Equipment Accounts payable Wages payable Unearned Sales revenue Notes Payable, Long Term John Columbus, Capital John Columbus, Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Wages Expense Insurance Expense Depreciation Expense - Furniture and Fixtures Depreciation Expense -Computer Equipment Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total 150,000 900,000 2,200,000 95,000 1,761,000 120,000 95,000 650,000 450,000 180.000 40.000 180,000 90,000 5,706,000 5,706,000 The following additional information is available at December 31, 2017: (a) (b) (c) Insurance of $450,000 was paid on May 1, 2017 for the 10-months to February 2018. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. The computer equipment was acquired on March 1, 2017 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000. Wages earned by employees NOT yet paid amounted to 15,000 at December 31,2017. A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand. At December 31, $140,000 the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000. (d) (e) (f) (9) REQUIRED: 1) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required) 2) Prepare Scholes Ltd multiple-step income statement for the year ended December 31, 2018. 3) Prepare Scholes Ltd statement of owner's equity for the year ended December 31, 2018. 4) Prepare ScholesLtd classified balance sheet at December 31, 2017 5) Prepare the closing entries 6) Prepare the post-closing trial balance Assessment 1: Weighting: 10% Due Date: March 27, 2020 @ 11:55 PM Related Course Objectives: Assignment Description and Instructions Suppose you are a part of a group of students from a prominent university and were sent out as a team to work with a leading merchandizing company as a part of a work experience program. The team having been introduced to the general manger was told that the Accountant who normally prepares the financial statements has suddenly resigned and there is no one available to prepare the company's financial statements which are now due. As aspiring university students, you and your group members have expressed an interest in taking on the task. As a group, you are required to collaborate and analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company's financial statements. The problem to be resolved: The following trial balance was extracted from the books of Scholes Farm Ltd December 31, the end of the company's financial year. The company is owned by Paul Scholes and is in the business of buying and farming supplies Trial Balance as at December 31, 2017 Trial Balance as at December 31, 2017 Trial Balance DR CR 1,000,000 450,000 15,000 186,000 120,000 450.000 1,000,000 360,000 600,000 320,000 A/C Name Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Insurance Furniture and Fixtures Accumulated depreciation - Furniture and Fixtures Computer Equipment Accumulated depreciation Computer Equipment Accounts payable Wages payable Unearned Sales revenue Notes Payable, Long Term John Columbus, Capital John Columbus, Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Wages Expense Insurance Expense Depreciation Expense - Furniture and Fixtures Depreciation Expense -Computer Equipment Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total 150,000 900,000 2,200,000 95,000 1,761,000 120,000 95,000 650,000 450,000 180.000 40.000 180,000 90,000 5,706,000 5,706,000 The following additional information is available at December 31, 2017: (a) (b) (c) Insurance of $450,000 was paid on May 1, 2017 for the 10-months to February 2018. The furniture and fixtures have an estimated useful life of 10 years and is being depreciated on the straight-line method down to a residual value of $100,000. The computer equipment was acquired on March 1, 2017 and is being depreciated over 10 years on the double-declining method of depreciation, down to a residue of $60,000. Wages earned by employees NOT yet paid amounted to 15,000 at December 31,2017. A physical count of inventory at December 31, reveals $180,000 worth of inventory on hand. At December 31, $140,000 the previously unearned sales revenue had been earned. The aging of the Accounts Receivable schedule at December 31 indicated that the estimated uncollectible on account receivable should be $45,000. (d) (e) (f) (9) REQUIRED: 1) Prepare the necessary adjusting journal entries on December 31. [Narrations are not required) 2) Prepare Scholes Ltd multiple-step income statement for the year ended December 31, 2018. 3) Prepare Scholes Ltd statement of owner's equity for the year ended December 31, 2018. 4) Prepare ScholesLtd classified balance sheet at December 31, 2017 5) Prepare the closing entries 6) Prepare the post-closing trial balance