How to do the entry for Dec 24, entry 26, 38 and 39.

3. Financial statements and analysis [Due Tuesday, Feb. 16, at 5:00 p.m.] 23 13,000 Part A: Basic Financial Statements Ozark Dock and Lift Company (ODLC Fall 2020) Exhibit A: December 2016 Transactions Transactions are posted once each two weeks in summary format. Notes: All sales amounts shown do not include sales tax. All sales are taxable. Be sure to add sales tax at a 5% rate to all sales and rental (not including deposits) transactions. Round all computations to the nearest dollar. Round up for 50 cents or more. Transactions were as follows: Labor wages accrued for two weeks. Paychecks will be issued on Dec. 12. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and 7.65% is paid by the employer. Prepare a formal multiple-step income statement, a statement of retained earnings, and a balance sheet as of December 31, 2016. The statements must be prepared using Excel or Word. Note from the ledger, there have been no changes in retained earnings during the entire year. There is not a single format for income statement. It is up to you to prepare the information in the most meaningful way that you can. You should take care in calculating gross profit. It is the sales of product less the cost of those products. It should not include accounts that are only for labor charges. Remember that you are given information relevant to Requirement 3 in December 24 entry #25 and adjusting entry #19. 24 13,200 25 Paid property insurance for Dec. 1 2016 to Dec 1, 2017 Recorded in expense account. Bad debt expense booked, equal to 1% of credit sales including sales tax. Paid wages due to all employees 236 Transaction Paid accrued on Nov. 30) wages due to employees 14,822 Amount $ 18,000 Part B: Management Analysis Dec. 12, 1 2 3 4 Provide useful information to management including: Paid accrued (Nov. 30) FICA and Medicare Paid accrued (Nov. 30 payroll tax withholdings Paid accrued (Nov. 30) sales taxes due Paid accounts payable Date Dec. 2, 1 2 3 4 Dec. 10, 5 6 7 8 Paid FICA and Medicare Paid income tax withholdings Paid sales taxes due 1,377 3.600 11,500 38,000 2,756 1,800 2,765 1. Gross profit percentages for each major product line sold. 2. Inventory tumover for the product lines that are supported by significant inventories. Calculate a ratio and a number of day's calculation. On Jan. 1, 2016, the piers and lifts inventory were $180,000, and the sports equipment inventory was $25,000.) 3. Accounts receivable tumover (for only credit sales) as a ratio and a number of days. (Only custom docks and seawalls are sold on credit). (On Jan. 1, 2016, net accounts receivable was $34,000.) 4. Return on assets. (On Jan 1, 2016, total assets were $861,400.) 5. The current ratio. (On Jan. 1, 2016, current assets were $395,000 and current liabilities were $270,200.) 26,000 19,000 2.300 The above entries were recorded by "Bob" from the temporary service. You are not allowed access to the journal entries, but all entries were posted to the ledger (Worksheet 2). Every ledger entry ties to the above dates and item numbers. Bob had to calculate the bad debt expense (good idea to confirm it). You must make entries and enter them into the ledger for the following items. "Your amt." means that you are paying the liability that was recorded in a prior entry. I would suggest you trace out these amounts. 9 10 11 12 13 14 15 16 17 18 19 32,000 16,000 8,500 340 6,500 2.300 4,500 3,200 42,000 1,400 500 Calculate Pier and lift sales for cash, before tax amount Cost of piers and lifts sold Labor charge to install lifts, received in cash from customers, before tax amount Purchases of piers and lifts on account Custom dock sales charged to customers, before tax amount Purchases of lumber on account for custom docks Dock parts issued from inventory Seawall installations charged to customers, before tax amount Seawall rocks purchased on account Sports equipment sales for cash, before tax amount Purchases of sports equipment on account Cash collected from customers on accounts receivable Advertising expenses incurred and paid Purchase of office supplies, paid in cash, charged to expense account Freight in incurred and paid Customer accounts receivable written off President and secretary salaries accrued for two weeks. Paychecks will be issued on Dec. 12. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and 7.65% is paid by the employer. (Taxes to the nearest dollar in all cases) Dec. 24, 5 6 7 8 9 10 85,000 64,000 1,500 17,000 45,000 20 21 22 1,400 2,500 5,000 11 15,000 Record payment of accounts payable. Accounts paid total $25,000 (before cash discount). Only 8,000 of the goods purchased qualified for an early payment discount. Terms are 2/10, n/30 Pier and lift sales for cash, before tax amount Cost of piers and lifts sold Labor charged to install lifts, received in cash, before tax amount Purchases of piers and lifts on account Custom dock sales charged to customer accounts receivable accounts, before tax amount Purchases of dock lumber for sold jobs and delivered to customer work site, on account Dock parts issued from inventory to sold jobs Purchase of dock parts for inventory on account Seawall installations charged to customers, before tax amounts Seawall rocks purchased on account Sports equipment sales for cash, before tax amount Purchases of sports equipment on account - purchased from Italian supplier and billed as 6,000 Euros. On that date the exchange rate was one Euro = $1.25 Cash collected from customers on accounts receivable. $2,000 was the collection of an amount written off a vear ago 12 13 14 15 16 17 3,000 1,500 17,000 7,000 13,000 Calculate 11 18 23,000 7 8 9 32 Calculate 19 20 21 2.300 1,000 1,000 1,800 13,000 6 2,000 22 Cash dividend of $1 per share of stock was declared and paid. Hint: is there a worksheet that will include the information you need to calculate the shares outstanding? Create a temporary account Dividends declared." It is a contra- equity account. Pick an appropriate account number. Hint: The number of shares outstanding is found by dividing the common stock account by $1. Christmas gift certificates for sports equipment were sold for the first time for the Christmas of 2016. The certificates can be redeemed at any time. There is no sales tax on certificates Instead, the tax is added to the bill when the certificate is redeemed. All certificates were sold for cash. Hint: Ozark does not feel that it can pass the $20 charge on to its customer. A customer placed a $2,000 deposit on a custom lift that will be ordered from the manufacturer for delivery in early 2017. The exact cost and selling price of the lift is not yet known. Transfer $30,000 to Money Market Account The bank notified Ozark that $900 interest had been added to their money market account. The bank notified Ozark that the credit card fees for sales made on credit cards was $75. That amount was deducted from the checking account. 30,000 900 8 33 8,500 9 75 24 15,000 34 Calculate 35 36 1,500 12,000 Required: Using the general journal template (Worksheet 1), enter the above transactions for Dec. 24 and 26. Post the transactions to the general ledger (Worksheet 2). Record the account balances from the general ledger on the unadjusted trial balance (Worksheet 3). Submit Worksheet 1 and Worksheet 3 only. Submit one Excel file only, including each worksheet as a separate sheet/tab. 2,000 25 2,050 Gift certificates were redeemed for sports equipment purchases of $5,000 (plus tax). Accounts receivable written off as uncollectible Sports equipment (snow skis) rentals for cash (before tax), plus deposits of $2,000 (not taxed). Hint: The rental fee should be recorded in the sports equipment rental account, there is also an account for customer deposits. A bill from the computer consulting firm for one year of maintenance and support was found. The bill covers service from October 1, 2016 to September 30, 2017. Record the entire bill in account 321 37 Advertising expenses incurred and paid Fuel bill received and paid in cash Freight incurred (for sports equipment purchased) and paid Utility bills received and paid in cash President and secretary salaries accrued for two weeks. Paychecks will be issued on Dec. 26. Amount shown is gross, apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and another 7.65% is paid by the employer Labor wages accrued for two weeks. Paychecks will be issued on Dec. 26. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65% is withheld from employee pay and another 7.65% is paid by the employer. Pay monthly payment on mortgage, interest portion is $1,190, $860 is a reduction of mortgage payable account 611) Annual interest and principal amounts (needed for later Requirement 3) are: Year Payments Interest Principal 2016 $24,600 $15,500 $9,100 2017 24.600 13,600 11.000 Bad debt expense booked, equal to 1% of credit sales including sales tax (since Dec. 10 entry). (rounded up to nearest dollar) Old truck sold, original cost was $25,000, and accumulated depreciation on Dec 31, 2015 was $10,000. Annual depreciation $5,000, Sale price is $9,000. The auction that sold the truck charged a 5% commission. A check for $8.550 was received and deposited. Hint: compute and record full year of depreciation on truck before you record the sale. No sales tax is collected on this sale. The buyer pays it directly to the state when registering the vehicle. The sale is recorded net of the fee charged by the auction service. Purchased new truck, paid $10,000 cash and financed $40,000 balance on a 3-year installment contract. IA hydraulic crane was added to the barge. It is to be capitalized but it does not prolong the depreciable life of the barge and does not change the salvage value. 2,400 26 Calculate 38 10,000 27 8,550 EZ Lift Company notified Ozark that it had eamed a $10,000 rebate on 2016 purchases. The rebate was eamed by meeting a volume target. $2,000 of the rebates apply to lifts in the year-end inventory. The rebate will be paid to Ozark in early Jan. 2017. 400 Christmas cards were sent to customers. Inside the card, there were 2 coupons for a Fish Fry at Ron's Cozy Comer. They must be used in January 2017. The cost of the mailing was $1,500, When the coupons are redeemed, Ozark will be charged $12 for each fish fiy. In the past, 30% of the coupons are redeemed. 39 Calculate 40 3,000 28 50,000 Ozark rented a new storage building starting Jan 1, 2017. The agreement is month to month but requires a 3-month notice for ending the rental. Ozark paid $3,000 $1,000 is rent for January 2017 and $2,000 is a security deposit Paid wages due to all employees 29 13000 Dec. 26, Your amt 30 3 2,000 500 Your amt. Your amt. Your amt. Calculate Permits were obtained from the state for installations in 2016. The permit fees charged by the state and paid in cash were $2000, the fees charged by Ozark are $500. The $2,500 was charged to customer receivable account. Hint: The $2,000 is a direct debit to accounts receivable. Only the fee is revenue Neither amount is subject to sales tax. Tools are purchased and paid for in cash Paid FICA and Medicare Paid income tax withholdings Paid sales taxes due The $12,350 check for the sale of the truck was dated January 2, 2017. The sales agent agreed to take the postdated check. The office manager did not notice the date when making the deposit. The bank has now returned the check and charged a $20 fee for a bad check. 31 3,000 10 11 12 3. Financial statements and analysis [Due Tuesday, Feb. 16, at 5:00 p.m.] 23 13,000 Part A: Basic Financial Statements Ozark Dock and Lift Company (ODLC Fall 2020) Exhibit A: December 2016 Transactions Transactions are posted once each two weeks in summary format. Notes: All sales amounts shown do not include sales tax. All sales are taxable. Be sure to add sales tax at a 5% rate to all sales and rental (not including deposits) transactions. Round all computations to the nearest dollar. Round up for 50 cents or more. Transactions were as follows: Labor wages accrued for two weeks. Paychecks will be issued on Dec. 12. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and 7.65% is paid by the employer. Prepare a formal multiple-step income statement, a statement of retained earnings, and a balance sheet as of December 31, 2016. The statements must be prepared using Excel or Word. Note from the ledger, there have been no changes in retained earnings during the entire year. There is not a single format for income statement. It is up to you to prepare the information in the most meaningful way that you can. You should take care in calculating gross profit. It is the sales of product less the cost of those products. It should not include accounts that are only for labor charges. Remember that you are given information relevant to Requirement 3 in December 24 entry #25 and adjusting entry #19. 24 13,200 25 Paid property insurance for Dec. 1 2016 to Dec 1, 2017 Recorded in expense account. Bad debt expense booked, equal to 1% of credit sales including sales tax. Paid wages due to all employees 236 Transaction Paid accrued on Nov. 30) wages due to employees 14,822 Amount $ 18,000 Part B: Management Analysis Dec. 12, 1 2 3 4 Provide useful information to management including: Paid accrued (Nov. 30) FICA and Medicare Paid accrued (Nov. 30 payroll tax withholdings Paid accrued (Nov. 30) sales taxes due Paid accounts payable Date Dec. 2, 1 2 3 4 Dec. 10, 5 6 7 8 Paid FICA and Medicare Paid income tax withholdings Paid sales taxes due 1,377 3.600 11,500 38,000 2,756 1,800 2,765 1. Gross profit percentages for each major product line sold. 2. Inventory tumover for the product lines that are supported by significant inventories. Calculate a ratio and a number of day's calculation. On Jan. 1, 2016, the piers and lifts inventory were $180,000, and the sports equipment inventory was $25,000.) 3. Accounts receivable tumover (for only credit sales) as a ratio and a number of days. (Only custom docks and seawalls are sold on credit). (On Jan. 1, 2016, net accounts receivable was $34,000.) 4. Return on assets. (On Jan 1, 2016, total assets were $861,400.) 5. The current ratio. (On Jan. 1, 2016, current assets were $395,000 and current liabilities were $270,200.) 26,000 19,000 2.300 The above entries were recorded by "Bob" from the temporary service. You are not allowed access to the journal entries, but all entries were posted to the ledger (Worksheet 2). Every ledger entry ties to the above dates and item numbers. Bob had to calculate the bad debt expense (good idea to confirm it). You must make entries and enter them into the ledger for the following items. "Your amt." means that you are paying the liability that was recorded in a prior entry. I would suggest you trace out these amounts. 9 10 11 12 13 14 15 16 17 18 19 32,000 16,000 8,500 340 6,500 2.300 4,500 3,200 42,000 1,400 500 Calculate Pier and lift sales for cash, before tax amount Cost of piers and lifts sold Labor charge to install lifts, received in cash from customers, before tax amount Purchases of piers and lifts on account Custom dock sales charged to customers, before tax amount Purchases of lumber on account for custom docks Dock parts issued from inventory Seawall installations charged to customers, before tax amount Seawall rocks purchased on account Sports equipment sales for cash, before tax amount Purchases of sports equipment on account Cash collected from customers on accounts receivable Advertising expenses incurred and paid Purchase of office supplies, paid in cash, charged to expense account Freight in incurred and paid Customer accounts receivable written off President and secretary salaries accrued for two weeks. Paychecks will be issued on Dec. 12. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and 7.65% is paid by the employer. (Taxes to the nearest dollar in all cases) Dec. 24, 5 6 7 8 9 10 85,000 64,000 1,500 17,000 45,000 20 21 22 1,400 2,500 5,000 11 15,000 Record payment of accounts payable. Accounts paid total $25,000 (before cash discount). Only 8,000 of the goods purchased qualified for an early payment discount. Terms are 2/10, n/30 Pier and lift sales for cash, before tax amount Cost of piers and lifts sold Labor charged to install lifts, received in cash, before tax amount Purchases of piers and lifts on account Custom dock sales charged to customer accounts receivable accounts, before tax amount Purchases of dock lumber for sold jobs and delivered to customer work site, on account Dock parts issued from inventory to sold jobs Purchase of dock parts for inventory on account Seawall installations charged to customers, before tax amounts Seawall rocks purchased on account Sports equipment sales for cash, before tax amount Purchases of sports equipment on account - purchased from Italian supplier and billed as 6,000 Euros. On that date the exchange rate was one Euro = $1.25 Cash collected from customers on accounts receivable. $2,000 was the collection of an amount written off a vear ago 12 13 14 15 16 17 3,000 1,500 17,000 7,000 13,000 Calculate 11 18 23,000 7 8 9 32 Calculate 19 20 21 2.300 1,000 1,000 1,800 13,000 6 2,000 22 Cash dividend of $1 per share of stock was declared and paid. Hint: is there a worksheet that will include the information you need to calculate the shares outstanding? Create a temporary account Dividends declared." It is a contra- equity account. Pick an appropriate account number. Hint: The number of shares outstanding is found by dividing the common stock account by $1. Christmas gift certificates for sports equipment were sold for the first time for the Christmas of 2016. The certificates can be redeemed at any time. There is no sales tax on certificates Instead, the tax is added to the bill when the certificate is redeemed. All certificates were sold for cash. Hint: Ozark does not feel that it can pass the $20 charge on to its customer. A customer placed a $2,000 deposit on a custom lift that will be ordered from the manufacturer for delivery in early 2017. The exact cost and selling price of the lift is not yet known. Transfer $30,000 to Money Market Account The bank notified Ozark that $900 interest had been added to their money market account. The bank notified Ozark that the credit card fees for sales made on credit cards was $75. That amount was deducted from the checking account. 30,000 900 8 33 8,500 9 75 24 15,000 34 Calculate 35 36 1,500 12,000 Required: Using the general journal template (Worksheet 1), enter the above transactions for Dec. 24 and 26. Post the transactions to the general ledger (Worksheet 2). Record the account balances from the general ledger on the unadjusted trial balance (Worksheet 3). Submit Worksheet 1 and Worksheet 3 only. Submit one Excel file only, including each worksheet as a separate sheet/tab. 2,000 25 2,050 Gift certificates were redeemed for sports equipment purchases of $5,000 (plus tax). Accounts receivable written off as uncollectible Sports equipment (snow skis) rentals for cash (before tax), plus deposits of $2,000 (not taxed). Hint: The rental fee should be recorded in the sports equipment rental account, there is also an account for customer deposits. A bill from the computer consulting firm for one year of maintenance and support was found. The bill covers service from October 1, 2016 to September 30, 2017. Record the entire bill in account 321 37 Advertising expenses incurred and paid Fuel bill received and paid in cash Freight incurred (for sports equipment purchased) and paid Utility bills received and paid in cash President and secretary salaries accrued for two weeks. Paychecks will be issued on Dec. 26. Amount shown is gross, apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65 % is withheld from employee pay and another 7.65% is paid by the employer Labor wages accrued for two weeks. Paychecks will be issued on Dec. 26. Amount shown is gross; apply 7.65% FICA and Medicare and 10% income tax withholding. Additionally, a payroll tax is paid by the employer equal to the FICA and Medicare withholdings. In other words, 7.65% is withheld from employee pay and another 7.65% is paid by the employer. Pay monthly payment on mortgage, interest portion is $1,190, $860 is a reduction of mortgage payable account 611) Annual interest and principal amounts (needed for later Requirement 3) are: Year Payments Interest Principal 2016 $24,600 $15,500 $9,100 2017 24.600 13,600 11.000 Bad debt expense booked, equal to 1% of credit sales including sales tax (since Dec. 10 entry). (rounded up to nearest dollar) Old truck sold, original cost was $25,000, and accumulated depreciation on Dec 31, 2015 was $10,000. Annual depreciation $5,000, Sale price is $9,000. The auction that sold the truck charged a 5% commission. A check for $8.550 was received and deposited. Hint: compute and record full year of depreciation on truck before you record the sale. No sales tax is collected on this sale. The buyer pays it directly to the state when registering the vehicle. The sale is recorded net of the fee charged by the auction service. Purchased new truck, paid $10,000 cash and financed $40,000 balance on a 3-year installment contract. IA hydraulic crane was added to the barge. It is to be capitalized but it does not prolong the depreciable life of the barge and does not change the salvage value. 2,400 26 Calculate 38 10,000 27 8,550 EZ Lift Company notified Ozark that it had eamed a $10,000 rebate on 2016 purchases. The rebate was eamed by meeting a volume target. $2,000 of the rebates apply to lifts in the year-end inventory. The rebate will be paid to Ozark in early Jan. 2017. 400 Christmas cards were sent to customers. Inside the card, there were 2 coupons for a Fish Fry at Ron's Cozy Comer. They must be used in January 2017. The cost of the mailing was $1,500, When the coupons are redeemed, Ozark will be charged $12 for each fish fiy. In the past, 30% of the coupons are redeemed. 39 Calculate 40 3,000 28 50,000 Ozark rented a new storage building starting Jan 1, 2017. The agreement is month to month but requires a 3-month notice for ending the rental. Ozark paid $3,000 $1,000 is rent for January 2017 and $2,000 is a security deposit Paid wages due to all employees 29 13000 Dec. 26, Your amt 30 3 2,000 500 Your amt. Your amt. Your amt. Calculate Permits were obtained from the state for installations in 2016. The permit fees charged by the state and paid in cash were $2000, the fees charged by Ozark are $500. The $2,500 was charged to customer receivable account. Hint: The $2,000 is a direct debit to accounts receivable. Only the fee is revenue Neither amount is subject to sales tax. Tools are purchased and paid for in cash Paid FICA and Medicare Paid income tax withholdings Paid sales taxes due The $12,350 check for the sale of the truck was dated January 2, 2017. The sales agent agreed to take the postdated check. The office manager did not notice the date when making the deposit. The bank has now returned the check and charged a $20 fee for a bad check. 31 3,000 10 11 12