Colin Cameron Appliance-Myrtle Beach has just purchased a franchise from Colin Cameron Appliance (CCA). (Click the icon to view the additional information.) Following is the chart of accounts for Colin Cameron Appliance-Myrtle Beach As a new business, all beginning balances are $0. (Click the icon to view the chart of accounts) Colin Cameron Appliance Myrtle Beach completed the following transactions during 2024, its first year of operations: (Click the icon to view the transactions.) Read the requirements (a) CCOOTER Requirement 1. Record the transactions in the general joumal Omit explanations. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Received $580,000 cash from owner. S. Balm Opened a new checking account at Myrtle Beach National Bank and deposited the cash received from the owner Debit Credit Date Accounts A meron Ap k the icon g is the ch y business ck the icon ement 1. R ived $580, WH More info 1 CCA is a manufacturer of kitchen appliances. CCA markets its products via retail stores that are operated as franchises. As a CCA franchisee, Colin Cameron Appliance Myrtle Beach will receive many benefits, including having the exclusive right to sell CCA brand appliances in Myrtle Beach. CCA appliances have an excellent reputation and the CCA name and logo are readily recognized by consumers. CCA also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, Colin Cameron Appliance-Myrtle Beach will pay an annual franchise fee to CCA based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. In addition to purchasing the franchise, Colin Cameron Appliance Myrtle Beach will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from CCA and resell them in its store, primarily to local building contractors for installation in new homes. y jou from her ach ha al info Colin q accou ons in t er, S. E Accol More info Cash Petty Cash Accounts Receivable Allowance for Bad Debts Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Notes Receivable Land Building Colin Cameron Appliance-Myrtle Beach Chart of Accounts Balm, Capital Balm, Withdrawals Sales Revenue Interest Revenue Cost of Goods Sold Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense - X 4 43 tran al info olin d accou ons in r, S. B Acco Prepaid insurance Interest Receivable Notes Receivable Land Building Accumulated Depreciation Building Store Fixtures Accumulated Depreciation-Store Fixtures Office Equipment Accumulated Depreciation Office Equipment Franchise Accounts Payable Interest Payable Notes Payable Jaanes Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Credit Card Expense Depreciation Expense Building Depreciation Expense-Store Fixtures Depreciation Expense-Office Equipment Amortization Expense Franchise Interest Expense Cash Short and Over MOIF just matic mer nts.) he ge alm. ( unts More info a. Received $580,000 cash from owner, S. Balm, in exchange for capital. Opened a new checking account at Myrtle Beach National Bank and deposited the cash received from the owner. Paid $56,000 cash for a CCA franchise. b. c. Paid $215,000 cash and issued a $350,000, 10-year, 12% notes payable for land with an existing building. The assets had the following market values: Land, $60,000, Building, $505,000. d. Paid $97,500 for store fixtures. e. Paid $60,000 for office equipment. f. Paid $400 for office supplies. g. Paid $3,000 for a two-year insurance policy h. Purchased appliances from CCA (merchandise inventory) on account for $420,000 i. Established a petty cash fund for $160. j. Sold appliances on account to ABC Contractors for $220,000, terms n/30 (cost, $88,000) k. Sold appliances to Munro Contracting for $190,000 (cost $81,000), receiving a 6-month, 15% note. 1. Recorded credit card sales of $45,000 (cost, $21,000), net of processor fee of 1% m. Received payment in full from ABC Contractors. I x wing tra as just ormatio Camerd unts.) the ge Balm ( counts More info m. Received payment in full from ABC Contractors, n. Purchased appliances from CCA on account for $610,000 o. Made payment on account to CCA, $340,000 p. Sold appliances for cash to CB Home Builders for $340,000 (cost, $171,000). q. Received payment in full on the maturity date from Munro Contracting for the note. Sold appliances to Deard Contracting for $260,000 (cost, $128,000), receiving a 9-month, 15% note. S. Made payment on account to CCA, $470,000. t. Sold appliances on account to various businesses for $970,000, terms n/30 (cost, $388,000) Collected $740,000 cash on account. U. V. Paid cash for expenses: Salaries, $170.000; Utilities, $13,000 w. Replenished the petty cash fund when the fund had $73 in cash and petty cash tickets for $80 for office supplies. Balm withdrew $10,000. Paid the franchise fee to CCA of 3% of total sales of $2.025,000 r. X. y. W st purch ion.) eron App general j Opene Requirements 1. Record the transactions in the general journal. Omit explanations. 2. Post to the general ledger 3. It is a common business practice to reconcile the bank accounts on a monthly basis. However, in this problem, the reconciliation of the company's checking account will be done at the end of the year, based on an annual summary. Reconcile the bank account by comparing the following annual summary statement from Myrtle Beach National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference. Beginning Balance, January 1, 2024 Deposits and other credits: Interest Revenue S 580,000 44,550 220.000 340,000 740,000 1,200 $ 0 2 1.925,750 1 e following tran ust purch ation.) eron App :-) general j n Opene S Requirements Checks and other debits: EFT to Bank Checks Checks: Bank service charge $ 110 56.000 215,000 60,000 97,500 160 3.000 400 340 000 470,000 183,000 1,700 (1,426,870) 5 498 880 4 he followin has just purch formation.) Cameron App ounts.) the general j Balm Opene counts Requirements $ a. Building, straight-line, 30 years, $25,000 residual value b. Store Fixtures, straight-line, 15 years, no residual value. 498,880 Ending balance, December 31, 2024 "Bank Checks is a company that prints business checks (considered a bank expense) for Colin Cameron Appliance-Myrtle Beach 4. In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2024: c. Office Equipment, double-declining-balance, five years, $6,000 residual value. 5. Record adjusting entries for the year ended December 31, 2024 a. One year of the prepaid insurance has expired. b. Management estimates that 10% of Accounts Receivable will be uncollectible. c. An inventory of office supplies indicates $260 of supplies have been used. d. Calculate the interest earned on the outstanding Deard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on Januan 1 -X M e following tr just purch mation.) meron App nts.) he general j alm. Opene unts receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year g. Calculate the interest owed on the note payable. Assume the note was issued on 6. Post adjusting entries and prepare an adjusted trial balance. January 1. 7. Prepare a multi-step income statement and statement of owner's equity for the year ended December 31, 2024. Prepare a classified balance sheet as of December 31, 2024 Assume Interest Receivable is a current asset and Interest Payable is a current liability. 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. a. Liquidity life. b.Efficiency: i Current ratio ii. Acid-test ratio ili Cash ratio i Accounts receivable turnover ii. Day's sales in receivables ili Asset turnover iv Rate of return on total assets 27