I do not know how much you can help but as soon as possible I cannot get my balance sheet to balance, and therefore wrong income statement, It would be amazing if you could do that

ACCTG 3600

FINAL GROUP PROJECT

VERSION F

INSTRUCTIONS

Form groups of 2-3 to complete this project

Name your company and pick the products and services that you sell

Complete each of the requirements listed below in Part I and Part II

PART I Record Entries and Build the Financial Statements

Company Introduction and Overview

Give me quick overview of your company. What is your companys name? What products and services do you sell?

Journal Entry List

Record entries from the transaction and event list provided below in proper journal entry format. NOTE: You are recording entries for the fiscal year 2019 (Jan 1 Dec 31). This list must be organized. Make sure that I can easily identify the journal entry or adjusting journal entry with the related transaction/event. Show your work if the entry requires you to make a calculation (i.e. depreciation, interest expense, etc.).

Chart of T-Accounts

Create a chart of T-Accounts and post each journal entry to the appropriate accounts.

Financial Statements

Build a multi-step income statement and a balance sheet for the year ending December 31, 2019 (include three years of data for 2019, 2018, and 2017 on both the income statement and balance sheet). Create a statement of cash flows for 2019 and 2018 using the indirect method.

PART II Analyze the Company

Ratio Analysis (ALL THREE YEARS)

Compute the following using the information from the financial statements you have produced for 2019. Show your work. Explain to me what every calculation means (i.e. explain the answer to me in non-book language). Provide graphs which show the three year trends of each ratio.

Earnings Per Share

Price-earnings ratio

Return on Equity

Working Capital

Current Ratio

Quick Ratio

AR Turnover

Inventory Turnover

Gross Profit

Gross Profit Ratio

Operating Income

Operating Margin

Debt-to-equity ratio

Book value per share

Business Analysis

Separate from your ratio analysis, perform an analysis of your business using your results from the required calculations listed above and any other trend information you deem to be relevant. Use these calculations to determine how the company is doing overall. Hint: Consider creating graphs/tables to support your conclusions NOTE: Assume that you are the CEO of the company when preparing your response to this question.

Projected Income Statement for 2020

Build a projected income statement for next year based on forecasted sales that equal $3,500,000 (do not use a different amount than the $3,500,000 provided). Use the results of the analysis you performed in the preceding question and any other information you deem to be relevant to build this income statement. Provide a brief explanation of the method(s) your group used to determine the projected numbers per account.

Actual vs. Predicted Earnings Per Share Evaluation

Analysts predicted earnings per share (EPS) for your company to be $0.12 at the close of 2019. How does this compare to actual EPS for 2019? If actual EPS is higher than the analysts prediction, what factors contributed to the success? If actual EPS is lower than the prediction, how will you explain the shortfall to your investors? Is there anything you could have done to meet the prediction? NOTE: Assume that you are the CEO of the company when preparing your response to this question.

SUBMIT THE FOLLOWING

The physical printed-out package you submit must be in the following order (Please no staples or binder clips due to the risk of losing pages. Please put in a three ring binder):

Company Introduction and Overview Indicate student names, UIDs, and project version

Financial Statements (in the following order):

Income Statement

Balance Sheet

Statement of Cash Flows for 2019 and 2018

Ratio Analysis

Business Analysis

Projected Income Statement for 2020 - Remember to include a discussion of the methods used by your group to create this income statement

Actual vs. Predicted Earnings Per Share Evaluation

Include the following supporting documentation: Journal Entry List, Chart of T-Accounts, Inventory Tracking Schedule, Depreciation Schedules, Patent Amortization Schedule, Bond Amortization Schedule, and any other relevant items such as Vertical or Horizontal Analysis, etc.

You will upload the following pieces into canvas:

Ratio Analysis

Business Analysis

Actual vs. Predicted Earnings Per Share Evaluation

I expect the package that you turn in to be professional in every way.

COMPANY INFORMATION

Your company began operations on January 1, 2016.

From January 1, 2017 December 31, 2018 your companys stock is traded on the NYSE with 4,000,000 common shares outstanding with a par value of $.25.

At the close of December 31, 2019, your companys stock was trading at $5.00 per share. On November 1^st the stock was trading at $3.25. At the end of 2018 and 2017, the value of your stock was $3.80 and $2.90, respectively.

Use the Cost Method for treatment of Treasury Stock.

Use the Allowance Method in accounting for Bad Debts, specifically the Percentage of Accounts Receivable Method.

The inventory system used by your company is perpetual and the inventory costing method is LIFO.

The companys inventory on January 1^st, 2019 consists of 13,000 units.

2019 TRANSACTION AND EVENT LIST VERSION F

HINT: Before booking an entry, remember to evaluate the substance of each transaction/event. Do accounting standards require the event or transaction to be booked into your companys accounting records? NOTE: All interest rates included in the transaction list are stated at an annual rate.

January

On January 1^st, The Board of Directors issued 250,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2018.

Purchased a truck for $250,000 cash on the 1^st of January. The truck will be depreciated over a 5 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $23,000.

[Adjusting Entry Required]

Purchased new office equipment for $94,000 with cash from California Furniture on January 1, 2019. The new furniture will be depreciated over a ten-year period on a straight-line basis. The cabinet has an estimated salvage value of $5,000.

[Adjusting Entry Required]

On January 1^st, a 5 year, $132,000 long-term note payable was taken from a local bank.

On January 5^th you receive payment from interest earned and accrued in 2018.

On January 22^nd you purchased 8,500 additional units of inventory at a cost of $77.50 per unit. You paid 45% in cash and purchased the remainder on account.

On January 25^th you pay $339,000 cash toward your accounts payable.

February

Paid cash for $54,300 worth of radio advertising on February 1^st. This gives you radio advertising space until January 31^st, 2020.

[Adjusting Entry Required]

February 13^th you collect $366,000 of account payments from customers.

March

Purchased a parcel of land on March 1, 2019 for $990,000 by paying $485,000 in cash and signing a short-term note payable with the seller for $505,000. You must repay the $505,000 in exactly one year on March 1, 2020. You agree to pay the seller 5 percent interest (annual rate) on a quarterly basis (June 1, September 1, December 1, 2019, and March 1, 2020).

[Adjusting Entry Required]

On March 19^th you purchased $24,000 of office supplies from Super Office Supplies with cash.

On March 20^th you received a payment of $43,000 for 200 hours of service to be performed in the future.

April

April 21^st, your customers bought 15,000 units of your product for $124 per unit (you decide what your company sells). The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

On April 27^nd you purchased 9,250 units at a cost of $79 per unit. You paid 60% in cash and purchased the remainder on account.

On April 29^th you pay $546,000 cash toward your accounts payable.

May

On May 1^st you pay all dividends owed to your owners.

June

Leased additional warehouse space from Leasing Solutions for two years on June 1^st due to expiration of the previous rental contract. $135,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

Wage expenses from January 1 June 30 are $502,000. Pay this in full including your beginning balance in wages payable.

On June 19^th, $138,000 of prepaid insurance was used.

On June 26^th a customer that previously bought your product on account has filed for bankruptcy. He owed you $42,500. You expect to collect $0.

July

Your company issued 1,000, 4.1% bonds (face value of each bond is $1,000) at 102.2693 on July 1^st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.6 Percent. Use the effective-interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.

[Adjusting Entry Required]

August

Purchased a Patent (Intangible Asset) for $87,000 on August 1^st. The patent will be amortized over a 10 year period on a straight-line basis.

[Adjusting Entry Required]

On August 6^th, a piece of land that was originally purchased for $1,250,000 was sold for $2,000,000 cash.

August 15^th, your customers bought 9,000 units of your product at $129 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

Received on August 25^th a $167,000 cash payment from a customer paying on their account.

September

$39,000 cash was paid for an investment in Company X's marketable securities on September 3^rd.

On September 12^th, a piece of equipment was sold for $760,000 cash. The equipment was originally purchased for $530,000. At the time of the sale, it had been depreciated by $90,000.

Purchased and used $10,900 worth of fuel for the delivery truck on September 18^th.

October

Your top sales officer met with a new customer to discuss a potential future contract. She informs you that the customer is considering signing the $280,000 deal, which would become effective February 2020.

On October 1^st, you purchased 11,250 units at the increased price of $80 per unit. The purchase was made on account.

On October 10^th you paid your supplier $135,000 cash for inventory purchased on account.

November

November 1^st, the CEO, in an effort to adjust ratios, ordered the repurchasing of the companys own stock. The quantity of stock repurchased was 160,000 shares.

Purchased a two-year building insurance policy on November 1^st for $361,000 cash.

[Adjusting Entry Required]

On November 17^th a customer pays you $536,000 for work that you will finish in January of 2020.

November 19^th, your customers bought 8,650 units of your product at $135 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 45% in cash and the remainder was on account.

An employment contract is signed with a new regional manager. You have offered him $160,000 per year. He will not begin working for the company until March 2020.

December

Wages earned from July 1^st through December 31^st was $532,000. Wages earned between Dec. 15^th and Dec 31^st amounting to $36,000 was not paid this until Jan 7th.

At the end of the year, $56,000 cash was paid to the local bank for the long-term note payable taken out on January 1, 2019. $46,000 of this was applied to the loan principal. The remaining amount was the accumulated interest due for 2019.

On December 31^st, the marketable (trading) securities you purchased on September 3, 2019 transaction now has a fair market value of $34,000.

On December 31^st, $489,000 depreciation expense for the year was calculated for equipment purchased before January 1, 2019.

On December 31^st, you declare dividends of $.24 per share to be paid at a later date.

On December 31^st, the utility bill was paid for the year. The amount was $64,000 and you paid in cash.

On December 31^st, you pay in cash recurring interest on the long-term note acquired prior to the year 2017. HINT: See prior year financial statements.

On December 31^st, your company earned interest on the average 2019 cash balance which will be paid January 5^th, 2020. The average interest rate for the year was 4.0%. Note: Compute the average cash using only the beginning and ending balance.

By December 31^st, 157 of the prepaid service hours from March 20, 2019 were completed.

A count of office supplies indicated that $23,800 of office supplies had been used by December 31^st.

Since the inception of your company, you have been able to collect 87% of your ending accounts receivable balance from customers that bought your product on account. Based on this information, adjust your allowance for bad debt account. NOTE: Use your 2019 ending accounts receivable balance to make this calculation.