Complete the blank cells in the first table in the Excel document on D2L to determine what the company's accounting records look like after you made the journal entries as part of the CFO's special project. Note that when you made the journal entry, the Property and Equipment, Net account accumulated the magic numbers each quarter. For example, in Q1 Year 1 the entry to Property and Equipment, Net account results in a balance of $32,000 plus $1,500 or $33,500. In Q2 Year 1 the amount would be $37,000 plus $1,500 from the prior quarter plus another $900 for the current quarter or $39,400 and so on. Included in your workbook spreadsheet (row 3) are the adjustment amounts for each of the 5 quarters so you can refer to those cells when doing your calculations. Also note the operating expenses will be reduced each period by the amount capitalized in that period. For example, in Q1 Year 1 operating expenses would be reduced by the $1,500 and in Q2 Year 1 operating expenses would be reduced by $900.

Complete the second table in the Excel document on D2L using both before and after the magic entry numbers. You will need to compute the fixed asset turnover ratio (rounded to three decimal places) for the periods ended Q2Q4 of year 1 and Q1 of year Note you cannot answer this for Q1 of Year 1 because you dont have beginning Property and Equipment, Net. For these same 4 quarters also calculate the net profit margin before and after the magic entry. Discuss in 2-4 sentences in a text box what you notice about the two ratios.

Please include formulas!

Magic entry amounts by quarter Q1 Year 1 Q2 Year 1 Q3 Year 1 Q4 Year 1 Q1 Year 2

Amounts in thousands of US dollars 1,500 900 1,200 700 600

Question #1 (fill in the blank cells)

Q1 Year 1 Q2 Year 1 Q3 Year 1 Q4 Year 1 Q1 Year 2

(March 31) (June 30) (Sept 30) (Dec 31) (March 31)

Amounts in thousands of US dollars Before your magic entry After your magic entry Before your magic entry After your magic entry Before your magic entry After your magic entry Before your magic entry After your magic entry Before your magic entry After your magic entry

Property & Equipment, net $ 32,000 $ 37,000 $ 35,000 $ 36,000 $ 37,000

Sales Revenue 8,400 8,600 9,400 9,200 8,700

Operating Expenses 8,000 8,500 8,600 8,900 8,200

Income from Operations (before taxes) 400 100 800 300 500

Question #2 (fill in the blank cells)

Q2 Year 1 Q3 Year 1 Q4 Year 1 Q1 Year 2

Fixed Asset Turnover BEFORE the magic entries using average Property and Equipment, Net, across the applicable quarters

Fixed Asset Turnover AFTER the magic entries using average Property and Equipment, Net, across the applicable quarters

Net profit margin BEFORE the magic the entries (use income from operations before taxes divided by sales)

Net profit margin AFTER the magic the entries (use income from operations before taxes divided by sales)

Question

Complete the blank cells in the first table in the Excel document on D2L to determine what the company's accounting records look like after you made the journal entries as part of the CFO's special project. Note that when you made the journal entry, the Property and Equipment, Net account accumulated the magic numbers each quarter. For example, in Q1 Year 1 the entry to Property and Equipment, Net account results in a balance of $32,000 plus $1,500 or $33,500. In Q2 Year 1 the amount would be $37,000 plus $1,500 from the prior quarter plus another $900 for the current quarter or $39,400 and so on. Included in your workbook spreadsheet (row 3) are the adjustment amounts for each of the 5 quarters so you can refer to those cells when doing your calculations. Also note the operating expenses will be reduced each period by the amount capitalized in that period. For example, in Q1 Year 1 operating expenses would be reduced by the $1,500 and in Q2 Year 1 operating expenses would be reduced by $900.

Complete the second table in the Excel document on D2L using both before and after the magic entry numbers. You will need to compute the fixed asset turnover ratio (rounded to three decimal places) for the periods ended Q2Q4 of year 1 and Q1 of year Note you cannot answer this for Q1 of Year 1 because you dont have beginning Property and Equipment, Net. For these same 4 quarters also calculate the net profit margin before and after the magic entry. Discuss in 2-4 sentences in a text box what you notice about the two ratios.

Please include formulas!


Magic entry amounts by quarter	Q1 Year 1		Q2 Year 1		Q3 Year 1		Q4 Year 1		Q1 Year 2
Amounts in thousands of US dollars	1,500		900		1,200		700		600

Question #1 (fill in the blank cells)
	Q1 Year 1		Q2 Year 1		Q3 Year 1		Q4 Year 1		Q1 Year 2
	(March 31)		(June 30)		(Sept 30)		(Dec 31)		(March 31)
Amounts in thousands of US dollars	Before your magic entry	After your magic entry	Before your magic entry	After your magic entry	Before your magic entry	After your magic entry	Before your magic entry	After your magic entry	Before your magic entry	After your magic entry
Property & Equipment, net	$ 32,000		$ 37,000		$ 35,000		$ 36,000		$ 37,000
Sales Revenue	8,400		8,600		9,400		9,200		8,700
Operating Expenses	8,000		8,500		8,600		8,900		8,200
Income from Operations (before taxes)	400		100		800		300		500



Question #2 (fill in the blank cells)
	Q2 Year 1	Q3 Year 1	Q4 Year 1	Q1 Year 2
Fixed Asset Turnover BEFORE the magic entries using average Property and Equipment, Net, across the applicable quarters
Fixed Asset Turnover AFTER the magic entries using average Property and Equipment, Net, across the applicable quarters
Net profit margin BEFORE the magic the entries (use income from operations before taxes divided by sales)
Net profit margin AFTER the magic the entries (use income from operations before taxes divided by sales)

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