HOMEWORK #4 Due Tehruary 14, 5:00 pm 10 points Download the "Ilomework 4 Student Workbook" on D2L to answer ALL questions PART A: Sporty Corporation adjusts its accounts only at year-end. The following information is available as a source for preparing adjusting entries at December 31, 2019. 1. During July 2019, Sperly sold 100 ane-year subscriptions for their monthly publication at 596 ench, with the subscriptions starting November 1. The total amount received was credited to a liability account titled Uncamed Subscription Revenue. 2. On June 1, 2019, Sparty paid $12,(Xio for acne year insurance policy and Spurly recognized the entire Dout as a debit to ou asset account titled Prepaid Insurance 3. Sparty failed to recognize $3,000 in rent for December owed to Sparty by another company thal nens a part of Sparty's building 4. The Supplies Inventory account had a S15,000 balance at the beginning of the year (January 1, 2019), During the year, $14,000 of supplies were acquired, with the Supplies Expense account debited at the time of purchase. The supplies count at the end of the year (December 31, 2019) showed $16,DIXY of supplies still un hancl. Rquired: A. For each of the above minbered items, prepare the necessary adjusting journal entry. If no adjusting entry is required, explain why. Put the adjusting joumal catrics in the worksbeet tab titled "Part A. Oncstion A" 13. Below are 4 adjusting journal entries (AES) hal another fin, Walverine, failed to make al year end. For each entry NOT MADE indicate the effect that each mild AJI would have on the Wolverine's financial statements for the year ended 12/31/2019. Use O for overstated. U for understated, and NE for no effect. Organize your answer in tabular for using the column headings shown below and provided in the worksheet titled "Part A, Question B." PART B: At the beginning of 2019, the Obio Corporation added a acw product line to its production and sales, Ohio's Halance Sheet and income Statement are provided in the "Homework 4 Student Workbook in the workshot titled "Part I Financials." Example : At year end, Wolverine failed to make the below AJE to record that fact that cooployees carnod $4.000 in wages which will be paid on the next paysall date in January 2019. Compensation lixpense (4, -NI-RE-SE) 4,000 Salarics Payablc (-L) 4,000 Required: Calculate the following ratios for both 2019 and 2018. Do not retype the amounts used in the ratios instead refer to the appropriate cells from the provided balance sheet and income Statement). Round your answers to 3 decimal places. In 2-3 sentences cach, discuss your interprelation of the change in each ratio across the two years, considering the audition of a new product line. Put your answers in the workshoof titled "Part B Answer. Use a textbox for your discussion of the ratios a. Total Assel Tumover (Net Sales Average Total Assets) b. Gross Profit Margin (Gross ProfiNet Sales) c. Net Profit Margin (Net Income Net Sales) d. Retum on Assot (ROA) (Net Incomo/Average Total Assets) Total assets were $700,000 on December 31, 2017 If that adjustment was not made expenses and liabilities would be understated by 84,00. If expenses are understated, then Net Income and Stockholders' Equity will be overstated Income Statement Balance Sheet Adjusting Revenue - Expense - Not Income Assets = Liabilitics + Stockholders' Equity cutry Example 0 NEU O NE AJENI: At year end, Wolverine ailed to make the below AJK to record depreciation of $2.XII. Depreciation Expense 2,000 Accumulatod Depreciation 2.000 AJE #2: At year cod, Wolveriac failed to make the below AJE to record that Wolverine performed $3.000 in services in December that had been prepaid by the customer in November Note that when the services were paid for in November, Wolverine increased (debited) cash and incensed (credited) Uneared Service Revenue, a lability count Uneamed Revenue 3,000 Service Revenue 3,000) AJE #3: At year end, Wolverine failed to make the below AJE to record that Wolverine had some debt that had accred interest of $400. Interest Expense 400 Interest Payable AJE #14: At year end, Wolverine failed to make the below AJF. to recognize that a tenant owed Wolverine $1,000 rear for the month of December. The rent is due to Wolverine in January of 2019. 1,000 Rent Receivable Rent Revenue 1.000 HWK #4 Student Workbook for download AutoSaveFF Home Insert 50- Page Layout Draw Formulas Data Review View Comments A = P Times New Roman BIV fx 12 A Wrap Text Merge & Center Ceneral $ % Share insert E4YO. 2 Sort & Find & Ideas Format X u Filter Select SE Poste F31 Sensitivity x Anger E EEEEEEEEEEEEEEEEEE SESEBESSAAREEE Part A, Question B Part B Financials Part B Answer + # -- + 67% HWK #4 Student Workbook for download View Share Comments AutoSave OFF U Home Insert Draw Page Layout Formulas Calibri (Body) "11 VAM Peste 3 BIUS A F25 X fx Data Review = = = E * 25 wran Text Merge & Center General $ % D sert v Eu Ayu O 3 S Ideas Formatting as Table Sensitivity Styles Format Sort Filter X Find & Select V 2019 2015 Assets Current Assets $475.326 $184,569 Arts Herrar 435.200 85321 294513 60,240 Total Current Property, Plant and Ecuipment: 400500 45210 322 690 35,241 Lass: Acumulated Deprecat Property, but and Equipment, net Teral Assets $1,400,16 $1,114,714 Liabilities and Stockholders' Equity Current his 50516 18.956 43,521 35,219 Income Tax Payable Total OurrentUables 103,023 36987 362681 Strekhake Equity Contrbuned Capital Ratanadan Torta Stockholders' Equity Total Lili und Stockholders' Equity 320.000 98042 SANDNUMMERN KENNEBERGE----- 405,570 521.245 027015 $1,400.614 $1,114, 704 $1000925 $99.972 Sale Coct Sales Gross Profit 472,135 234584 40 500 32.140 29,569 38 652 Salaries and Wapes Excerce Rent Expenze Dupon Ees the pertingen Operating cost and Expenses Operating Income 2011.89 267445 254475 267.767 294 375 Interest Expense Income before Taxes Income Tax Expert Netice $245, 453 9 241,862 Part A, Question Part B Financials Part B Answer + - - + 70% HWK #4 Student Workbook for download Review View Comments AutoSave OFF U Home Insert Draw Page Layout Formulas Calibri (Body) 11A Peste 3 BIU. W YA F13 x fx Data = Wrap Text Merge & Center Su Share Inhy. O. 4 Sort Find & Ideas XV Filter Select Ceneral $ % E , Conditional Format Formatting es Table Cell Styles Sensitivity Format J K L M N O P Q 39 40 Part A Question Part B Financials Part B Answer + # - - + 100% HOMEWORK #4 Due Tehruary 14, 5:00 pm 10 points Download the "Ilomework 4 Student Workbook" on D2L to answer ALL questions PART A: Sporty Corporation adjusts its accounts only at year-end. The following information is available as a source for preparing adjusting entries at December 31, 2019. 1. During July 2019, Sperly sold 100 ane-year subscriptions for their monthly publication at 596 ench, with the subscriptions starting November 1. The total amount received was credited to a liability account titled Uncamed Subscription Revenue. 2. On June 1, 2019, Sparty paid $12,(Xio for acne year insurance policy and Spurly recognized the entire Dout as a debit to ou asset account titled Prepaid Insurance 3. Sparty failed to recognize $3,000 in rent for December owed to Sparty by another company thal nens a part of Sparty's building 4. The Supplies Inventory account had a S15,000 balance at the beginning of the year (January 1, 2019), During the year, $14,000 of supplies were acquired, with the Supplies Expense account debited at the time of purchase. The supplies count at the end of the year (December 31, 2019) showed $16,DIXY of supplies still un hancl. Rquired: A. For each of the above minbered items, prepare the necessary adjusting journal entry. If no adjusting entry is required, explain why. Put the adjusting joumal catrics in the worksbeet tab titled "Part A. Oncstion A" 13. Below are 4 adjusting journal entries (AES) hal another fin, Walverine, failed to make al year end. For each entry NOT MADE indicate the effect that each mild AJI would have on the Wolverine's financial statements for the year ended 12/31/2019. Use O for overstated. U for understated, and NE for no effect. Organize your answer in tabular for using the column headings shown below and provided in the worksheet titled "Part A, Question B." PART B: At the beginning of 2019, the Obio Corporation added a acw product line to its production and sales, Ohio's Halance Sheet and income Statement are provided in the "Homework 4 Student Workbook in the workshot titled "Part I Financials." Example : At year end, Wolverine failed to make the below AJE to record that fact that cooployees carnod $4.000 in wages which will be paid on the next paysall date in January 2019. Compensation lixpense (4, -NI-RE-SE) 4,000 Salarics Payablc (-L) 4,000 Required: Calculate the following ratios for both 2019 and 2018. Do not retype the amounts used in the ratios instead refer to the appropriate cells from the provided balance sheet and income Statement). Round your answers to 3 decimal places. In 2-3 sentences cach, discuss your interprelation of the change in each ratio across the two years, considering the audition of a new product line. Put your answers in the workshoof titled "Part B Answer. Use a textbox for your discussion of the ratios a. Total Assel Tumover (Net Sales Average Total Assets) b. Gross Profit Margin (Gross ProfiNet Sales) c. Net Profit Margin (Net Income Net Sales) d. Retum on Assot (ROA) (Net Incomo/Average Total Assets) Total assets were $700,000 on December 31, 2017 If that adjustment was not made expenses and liabilities would be understated by 84,00. If expenses are understated, then Net Income and Stockholders' Equity will be overstated Income Statement Balance Sheet Adjusting Revenue - Expense - Not Income Assets = Liabilitics + Stockholders' Equity cutry Example 0 NEU O NE AJENI: At year end, Wolverine ailed to make the below AJK to record depreciation of $2.XII. Depreciation Expense 2,000 Accumulatod Depreciation 2.000 AJE #2: At year cod, Wolveriac failed to make the below AJE to record that Wolverine performed $3.000 in services in December that had been prepaid by the customer in November Note that when the services were paid for in November, Wolverine increased (debited) cash and incensed (credited) Uneared Service Revenue, a lability count Uneamed Revenue 3,000 Service Revenue 3,000) AJE #3: At year end, Wolverine failed to make the below AJE to record that Wolverine had some debt that had accred interest of $400. Interest Expense 400 Interest Payable AJE #14: At year end, Wolverine failed to make the below AJF. to recognize that a tenant owed Wolverine $1,000 rear for the month of December. The rent is due to Wolverine in January of 2019. 1,000 Rent Receivable Rent Revenue 1.000 HWK #4 Student Workbook for download AutoSaveFF Home Insert 50- Page Layout Draw Formulas Data Review View Comments A = P Times New Roman BIV fx 12 A Wrap Text Merge & Center Ceneral $ % Share insert E4YO. 2 Sort & Find & Ideas Format X u Filter Select SE Poste F31 Sensitivity x Anger E EEEEEEEEEEEEEEEEEE SESEBESSAAREEE Part A, Question B Part B Financials Part B Answer + # -- + 67% HWK #4 Student Workbook for download View Share Comments AutoSave OFF U Home Insert Draw Page Layout Formulas Calibri (Body) "11 VAM Peste 3 BIUS A F25 X fx Data Review = = = E * 25 wran Text Merge & Center General $ % D sert v Eu Ayu O 3 S Ideas Formatting as Table Sensitivity Styles Format Sort Filter X Find & Select V 2019 2015 Assets Current Assets $475.326 $184,569 Arts Herrar 435.200 85321 294513 60,240 Total Current Property, Plant and Ecuipment: 400500 45210 322 690 35,241 Lass: Acumulated Deprecat Property, but and Equipment, net Teral Assets $1,400,16 $1,114,714 Liabilities and Stockholders' Equity Current his 50516 18.956 43,521 35,219 Income Tax Payable Total OurrentUables 103,023 36987 362681 Strekhake Equity Contrbuned Capital Ratanadan Torta Stockholders' Equity Total Lili und Stockholders' Equity 320.000 98042 SANDNUMMERN KENNEBERGE----- 405,570 521.245 027015 $1,400.614 $1,114, 704 $1000925 $99.972 Sale Coct Sales Gross Profit 472,135 234584 40 500 32.140 29,569 38 652 Salaries and Wapes Excerce Rent Expenze Dupon Ees the pertingen Operating cost and Expenses Operating Income 2011.89 267445 254475 267.767 294 375 Interest Expense Income before Taxes Income Tax Expert Netice $245, 453 9 241,862 Part A, Question Part B Financials Part B Answer + - - + 70% HWK #4 Student Workbook for download Review View Comments AutoSave OFF U Home Insert Draw Page Layout Formulas Calibri (Body) 11A Peste 3 BIU. W YA F13 x fx Data = Wrap Text Merge & Center Su Share Inhy. O. 4 Sort Find & Ideas XV Filter Select Ceneral $ % E , Conditional Format Formatting es Table Cell Styles Sensitivity Format J K L M N O P Q 39 40 Part A Question Part B Financials Part B Answer + # - - + 100%