Hi,

Attached are my Business Financials assignment and my project that I turned in. Could you look at my Statement of Cash Flows and offer any advice possible. My professor graded it as incorrect and I am not sure where I went wrong. Thank you.

ASSESSMENT 4 Comprehensive Problem 1 Details Attempt 1 Evaluated Attempt 2 Available Attempt 3 Overview Complete a variety of analyses of financial transactions for a hypothetical company: create T-accounts, post transactions, record adjusting and closing entries, prepare financial statements, and compute and analyze financial ratios. Note: Some of the assessments in this course build upon each other, so you are strongly encouraged to complete them in the order in which they are presented. For the first comprehensive problem, you will also demonstrate your understanding of the various steps of the accounting cycle starting with the recording of transactions through the preparation and analysis of the financial statements. This is the first of two comprehensive problems in this course through which you will demonstrate your mastery of assessment topics. By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria: Competency 1: Apply theories, models, and practices of accounting in the construction and analysis of financial statements. Create T-accounts and post appropriate transactions. Record adjusting and closing entries for each transaction at the end of an annual accounting year using appropriate financial data. Compute financial ratios using appropriate financial data to develop conclusions regarding a company's performance. Competency 3: Integrate accounting theories, models, and practices across the organization. Prepare financial statements (income statement, statement of stockholders' equity, balance sheet, and statement of cash flows) using appropriate financial data. Competency Map Check Your ProgressUse this online tool to track your performance and progress through your course. Questions to Consider To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community. Why are sales revenue and gross margin so important? How do they influence the profitability and value of the organization? How do they affect competitiveness? What is the relationship between receivables and cash? What is their influence on liquidity and solvency? How do they affect competitiveness? Resources Suggested Resources The resources provided here are optional. You may use other resources of your choice to prepare for this assessment; however, you will need to ensure that they are appropriate, credible, and valid. They provide helpful information about the topics in this unit. The MBA-FP6014 - Financial Accounting Library Guide can help direct your research. The Supplemental Resources and Research Resources, both linked from the left navigation menu in your courseroom, provide additional resources to help support you. The following resources are assessment specific templates for completing the assessment. Assessment 4, Comprehensive Problem Template. The following resources provide relevant financial accounting methods and practices. Doran, D. T. (2012). Financial reporting standards: A decision-making perspective for non-accountants. New York, NY: Business Experts Press. Chapter 1, "Overview of financial Accounting," pages 1-25 Chapter 2, "Cash, Receivables, and Revenue Recognition," pages 27-55 Chapter 3, "Inventory and Cost of Goods Sold," pages 58-88 Chapter 4, "Operational Assets," pages 89-124 Chapter 5, "Liabilities: Current Contingent, and Long Term Debt," pages 125-161 Chapter 7, "Financial Instruments: Investment Securities and Derivatives," pages 179-222 Chapter 9, "Stockholders' Equity and Earnings Per Share," pages 261-296 Chapter 10, "Statements of Cash Flows," pages 297-317 Libby, R., Libby, P., & Hodge, F. (2017). Financial accounting (9th ed.). New York, NY: Irwin. - Available from the bookstore Chapter 1, "Financial Statements and Business Decisions," pages 2-25. Chapter 2, "Investing and Financing Decisions and the Balance Sheet," pages 42-75. Chapter 3, "Operating Decisions and the Income Statement," pages 98-131. Chapter 4, "Adjustments, Financial Statements, and the Quality of Earnings," pages 160-191. Assessment Instructions Note: Some of the assessments in this course build upon each other, so you are strongly encouraged to complete them in the order in which they are presented. For this assessment, you may use Word or Excel to complete the assessments throughout this course, but you will find Excel to be most helpful for creating spreadsheets. Tutorials for using Excel are provided in the Supplemental Resources in the left navigation menu. If you use Excel, submit the assessment in one Excel document, using separate tabs for each spreadsheet. To complete this problem, you may choose to use the Assessment 4, Comprehensive Problem Template, which is linked in the Suggested Resources under the Capella Resources heading. Comprehensive Problem Patricia Allison began an engineering consulting business on January 1, 2011, organized as a corporation (PA Engineering, Inc.) under the laws of Delaware. The annual reporting period ends December 31, 2011. The trial balance on January 1, 2012, is provided in the following table: PA Engineering Trial Balance, January 1, 2012 Account Titles Cash Debit Credit $10,000 Accounts Receivable Office Supplies $20,000 Land Computers $80,000 Accumulated Depreciation (on computers) Miscellaneous Other Assets $5,000 Accounts Payable Salaries and Wages Payable Interest Payable Income Taxes Payable Long-Term Notes Payable Contributed Capital (100,000 $115,000 shares) Retained Earnings Service Revenue Depreciation Expense Supplies Expense Wages Expense Interest Expense Income Tax Expense Remaining Expenses (not detailed to simplify) Totals $115,000 Transactions during 2012 are as follows: a. Borrowed $20,000 cash on a five-year, 10 percent note payable, dated July 1, 2012. b. Purchased land for a future building site; paid cash, $10,000. $115,000 c. Earned $200,000 in revenues for 2012, including $60,000 on credit and the rest in cash. d. Sold 4,000 additional shares of capital stock for cash at $1.15 market value per share on January 3, 2012. e. Incurred $120,000 in remaining expenses for 2012, including $20,000 on credit and the rest paid in cash. f. Collected accounts receivable, $40,000. g. Purchased other assets for $8,000 cash. h. Paid accounts payable, $18,000. i. Purchased office supplies on account for future use, $25,000. j. Signed a three-year, $33,000 service contract to start February 1, 2013. k. Declared and paid cash dividends, $10,000. Data for adjusting entries: l. Supplies counted on December 31, 2012, $18,000. m. Depreciation for the year on the equipment, $21,000. n. Interest accrued on notes payable (to be computed). o. Wages earned by employees since the December 24 payroll but not yet paid, $15,000. p. Income tax expense, $10,000, payable in 2013. Complete the following for this problem: 1. Set up T-accounts for the accounts on the trial balance and enter beginning balances. 2. Prepare journal entries for transactions (a) through (k) and post them to the T-accounts. 3. Journal and post the adjusting entries (l) through (p). 4. Prepare an income statement (including earnings per share), statement of stockholders' equity, balance sheet, and statement of cash flows. 5. Journal closing entries. 6. Compute the following ratios for 2012 and explain what the results suggest about the company. Current ratio. (Industry average is 2.2 to 1.0.) Total asset turnover. (Industry average is 3 times a year.) Net profit margin. (Industry average is 5.00%.) Comprehensive Problem 1 Scoring Guide View Scoring Guide Use the scoring guide to enhance your learning. How to use the scoring guide [U04a1] Comprehensive Problem 1 Complete a variety of analyses of financial transactions for a hypothetical company: create T-accounts, post transactions, record adjusting and closing entries, prepare financial statements, and compute and analyze financial ratios. Submit Assessment This button will take you to the next available assessment attempt tab, where you will be able to submit your assessment. U04a1 Comprehensive Problem 1 >> View/Complete U04a1 Comprehensive Problem 1: Revision 1 >> View/Complete U04a1 Comprehensive Problem 1: Revision 2 >> View/Complete Worksheet 3 of 9. Template for requirements 2 and 3, T-accounts: Post transactions (a) through (k) and adjusting entries (l) through (p) to the T-accounts. Learner: Amanda Robledo PA Engineering, Inc. B. Bal (a) (c ) (d) (f) (b) Cash 10,000.00 20,000.00 140,000.00 4,600.00 40,000.00 214,600.00 68,600.00 10,000.00 100,000.00 8,000.00 18,000.00 10,000.00 146,000.00 (b) (e) (g) (h) (k) ( c) Accounts Receivable 60,000.00 60,000.00 20,000.00 B. Bal Computers 80,000.00 (h) Accounts Payable 18,000.00 Land 10,000.00 Interest Payable 1,000.00 (n) 18,000.00 Income Tax Payable Salaries and Wages Payable 10,000.00 (p) (k) (e) Contributed Capital 115,000.00 B. Bal 4,600.00 (d) 119,600.00 Dividends Declared 10,000.00 Remaining Expenses 120,000.00 Accumulated Depreicaiton Service Revenue (n) Interest Expense 1,000.00 Retained Earnings End of worksheet ng entries (l) through (p) to the T-accounts. Accounts Receivable 40,000.00 (f) B. Bal (i) 40,000.00 Computers B. Bal (g) Prepaid Office Supplies 20,000.00 27,000.00 (l) 25,000.00 45,000.00 27,000.00 18,000.00 Miscellaneous Other Assets 5,000.00 8,000.00 13,000.00 Accounts Payable 20,000.00 (e) 25,000.00 (i) 45,000.00 27,000.00 alaries and Wages Payable 15,000.00 (o) Accumulated Depreicaiton 21,000.00 (m) Service Revenue Notes Payable 20,000.00 (a) (l) Supplies Expense 27,000.00 (o) Wages Expense 15,000.00 (m) Depreciation Expense 21,000.00 (p) Income Tax Expense 10,000.00 200,000.00 ( c) Interest Expense Retained Earnings Worksheet 1 of 9. Template for requirement 1: Set up T-accounts for the accounts on the trial balance and enter beginning balances. Learner: Amanda Robledo PA Engineering, Inc. B. Bal Cash 10,000.00 Accounts Receivable 10,000.00 10,000.00 B. Bal Computers 80,000.00 Land Accounts Payable Interest Payable - Income Tax Payable Salaries and Wages Payable Contributed Capital 115,000.00 B. Bal Accumulated Depreciation 115,000.00 Dividends Declared Remaining Expenses Service Revenue Interest Expense Retained Earnings End of worksheet er beginning balances. Accounts Receivable B. Bal - Prepaid Office Supplies 20,000.00 20,000.00 20,000.00 Computers B. Bal Miscellaneous Other Assets 5,000.00 5,000.00 Notes Payable Supplies Expense alaries and Wages Payable Wages Expense Accumulated Depreciation Depreciation Expense Service Revenue Interest Expense Retained Earnings Income Tax Expense - Worksheet 2 of 9. Template for requirements 2 and 3, journal entries: Prepare journal entries for transactions (a) through (k) in columns A through D. Journal the adjusting entries (l) through (p) in columns G through I. Learner: Amanda Robledo PA Engineering, Inc. a. b. c. d. e. f. g. h. Transactions during 2012 Debit is always first and credit is indented Cash Note Payable Borrowed cash Land Cash Purchased land Cash Accounts Receviable Service Revenue Earned revenues for 2012 Cash Contributed Capital (4,000 shares @1.15 - market value) Remaining Expenses Cash Accounts Payable Incurred remaining expenses Cash Accounts Receivable Collected on Accounts Receivable DR CR 20,000.00 20,000.00 10,000.00 10,000.00 140,000.00 60,000.00 200,000.00 4,600.00 4,600.00 120,000.00 100,000.00 20,000.00 40,000.00 40,000.00 Other Assets Cash Purchased other assets 8,000.00 Accounts Payable Cash Paid accounts payable 18,000.00 8,000.00 18,000.00 i. Prepaid Office Supplies Accounts Payable Purchased office supplies j. No entry contract only k. Dividends Declared Cash Declared and paid cash dividends Debits must equal Credits End of worksheet 25,000.00 25,000.00 - - 10,000.00 10,000.00 455,600.00 455,600.00 Adjusting entries l. m. n. o. p. DR CR Supplies expense Prepaid Office Supplies (20000+25000-18000) 27,000.00 Depreciation expense Accumulated depreciation 21,000.00 Interest expense Accrued Interest payable ($20,000 x .1 x (6/12)) 27,000.00 21,000.00 1,000.00 1,000.00 Wages expense Salaries and Wages payable 15,000.00 Income tax expense Income tax payable 10,000.00 Debits must equal Credits 74,000.00 15,000.00 10,000.00 74,000.00 Worksheet 4 of 9. Template for requirement 4: Prepare an income statement (including earnings per share). Learner: Amanda Robledo PA Engineering, Inc. Income Statement For the Year Ended December 31, 2012 Service Revenue Less: Expenses Depreciation expense Supplies expense Wages expense Interest expense Remaining expense Total expense Net Income before taxes Less: Income Taxes Net Income $ $ $ $ $ End of worksheet $ 200,000.00 $ $ 184,000.00 16,000.00 10,000.00 6,000.00 21,000.00 27,000.00 15,000.00 1,000.00 120,000.00 Worksheet 5 of 9. Template for requirement 4: Prepare a statement of stockholders' equity. Learner: Amanda Robledo PA Engineering, Inc. Statement of Stockholder's Equity For the Year Ended December 31, 2012 Contributed Capital: December 31, 2011, 100,000 shares Add: January 3, 2012 issue of 4,000 shares Total Contributed Capital at December 31, 2012 Retained Earnings: Balance December 31, 2011 Add: Net Income Less Dividends Balance December 31, 2012 Total Stockholder's Equity $ $ End of worksheet 115,000.00 4,600.00 119,600.00 115,000.00 6,000.00 (10,000.00) (4,000.00) 115,600.00 Worksheet 6 of 9. Template for requirement 4: Prepare a balance sheet. Learner: Amanda Robledo PA Engineering, Inc. Balance Sheet At December 31, 2012 Assets Current Assets Cash Accounts Receivable Prepaid Office Supplies $ 68,600.00 20,000.00 18,000.00 Total Current Assets 106,600.00 Long-Term Assets Land Computers Less: Accumulated Depreciation (enter as -) Miscellaneous Other Assets 10,000.00 80,000.00 (21,000.00) 13,000.00 Total Long-Term Assets 82,000.00 Total Assets $ End of worksheet 188,600.00 Liabilities Current Liabilities Accounts Payable Salaries and Wages Payable Interest Payable Income Tax Payable Total Current Liabilities $ 27,000.00 15,000.00 1,000.00 10,000.00 53,000.00 Long-Term Notes Payable 20,000.00 Contributed Capital Retained Earnings Total Liabilities and Owners' Equity 119,600.00 (4,000.00) 115,600.00 $ 188,600.00 Worksheet 7 of 9. Template for requirement 4: Prepare a statement of cash flows. Learner: Amanda Robledo PA Engineering, Inc. Statement of Cash Flows For the Year Ending December 2012 Cash flows from operating activities Cash collected from customers Cash paid to suppliers Cash paid for remaining expenses Net cash flows from operating activities Cash flows from investing activities Cash paid for land Cash paid for other assets Net cash flows from investing activities Cash flows from financing activities Cash received from issuing stock to owners Cash received from note payable Cash paid for dividends Net cash flows from financing activities Net increase in cash during the month Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 Ending Cash balance should agree to Balance Sheet balance of $68,600. If agrees to Balance Sheet, next cell will be zero. End of worksheet 140,000 (25,000) (100,000) 15,000 (10,000) (134,600) (144,600) 119,600 20,000 (10,000) 129,600 0 68,600 68,600 $ - Worksheet 8 of 9. Template for requirement 5: Journal closing entries. Learner: Amanda Robledo PA Engineering, Inc. Closing Entries DR CR Service Revenue Income Summary 200,000.00 Income Summary Depreciation Expense Supplies Expense Wages Expense Interest Expense Income Tax Expense Remaining Expense 194,000.00 200,000.00 21,000.00 27,000.00 15,000.00 1,000.00 10,000.00 120,000.00 Income Summary Retained Earnings (4,000.00) Retained Earnings Dividends Declared 10,000.00 (4,000.00) 10,000.00 Debits must equal credits 400,000.00 End of worksheet 400,000.00 Worksheet 9 of 9. Template for requirement 6: Compute the current ratio, asset turnover, and net profit margin for 2012 and explain what the results sugg about PA Engineering, Inc. Learner: Amanda Robledo Ratios Current Ratio = Current Assets Current Liabilities Current Assets Current Liabilities Current ratio results compared to industry average (2.2 to 1.0): The current ratio is the ratio that allows lenders to assess a company's ability to pay its short term obligations (Accounting Tools, n.d.). A ratio of 2 is at the top end of the scale of the industry average. This shows that PA Engineering should have no trouble paying their debts. Asset Turnover = Sales Assets Sales Assets Asset turnover results compared to industry average (3 times per year): Asset Turnover ratio is the value of an organization's sales generated relative to their assets (Accounting Tools, n.d.). High ratios are good because they show that the company is making more revenue per dollar of their assets (Accounting Tools, n.d.). PA Engineering does not have a good asset turnover ratio because the industry standard is 3:1 and they are just over 1:1. Net Profit Margin = Net Income Sales Net Income Sales Net profit margin results compared to industry average (%5.00): Net profit margin, or profitability, shows an organization's ability to generate earnings relative to sales, assets, and equity (Accounting Tools, n.d.). In simple terms, it shows how well the organization's profitability is being managed. PA Engineering's profitability is 3%, whereas the industry standars is 5%. PA Engineering is not managaging their sales, assets, or equity well and needs to rethink their current plan. End of worksheet ofit margin for 2012 and explain what the results suggest 106,600.00 = 53,000.00 2.01 200,000.00 = 188,600.00 1.06 6,000.00 = 200,000.00 3% References Accounting Tools. (n.d.). Retrieved January 22, 2017, from Accounting Tools: http://www.accountingtools.com w.accountingtools.com