I'm not sure how to do the trial balance sheet, or basically the whole project..

Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ BUA 201 - Fall 2015 Final Project (70 pts) Dr. Henri Akono Notice: You are required to submit your solution in hardcopy, handwritten form in class on the due date: Wednesday December 9th, 2015. I will not accept any project submitted after this date. Instructor's comment: ________________________________________________ 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ "On my honor, as a student of The University of Maine, I will uphold the highest standards of academic integrity and personal accountability for the advancement of the dignity and the reputation of our university and myself.\" Student Signature _____________________________________________ 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ General Information Introduction Jones Widget Company (JWC) incorporated at the beginning of 2014. Below is the post closing trial balance as of 12/31/14. Account Title Balance Cash 10,700 Accounts Receivable 12,300 Allowance for Doubtful Account (685) Inventory 12,300 Prepaid Rent 1,500 Equipment 25,000 Accumulated Depreciation-Equipment (2,400) Total assets 58,715 Sales Tax payable 800 FICA Taxes Payable 600 FIT (i.e., Federal Income) Taxes Payable 500 Wages Payable 1,600 Unearned Revenue 6,500 Interest Payable 440 Notes Payable 22,000 Common Stock 23,100 Retained Earning 3,175 Total liabilities + stockholders' equity 58,715 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ Additional Information: JWC establishes a policy that it will sell inventory at $130 per unit. Sales taxes are 5%. JWC will use the FIFO method and record COGS on a perpetual basis. Employee wages are $4,000 per month, the federal income taxes (FIT) withheld are $500 and the FICA taxes are $300 per month payable on the first (1st) and sixteenth (16th) of the month. The Beginning inventory of $12,300 consists of 200 units. The Prepaid Rent balance is for the month of January. The equipment was purchased on July 1, 2014. It has a residual value of $1,000 and an expected life of five years. It is being depreciated using the straight line method. Unearned Revenue is for 50 units ordered by two customers in late December. One order will be filled in January, the remainder in early February. The Notes payable represents a $22,000 bank loan received on November 1 at 12% annual interest. State unemployment taxes amount to $200 and Federal unemployment taxes amount to $250 per month. Common stock includes 4,260 shares at $5 par value. Round all transactions to the nearest dollar. 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ Below are transactions for January 2015 Jan 1: A $100,000 6% six year bond is issued at 105.074. The market rate at issue of the bond is 5%. Jan 1: A truck (record as Truck) is purchased for $10,000 cash. It is estimated the truck will be used for 50,000 miles and will have no salvage value. The truck will be depreciated using the units-ofproduction method. Jan 2: Machinery (record as Furniture) is purchased for $120,000 cash. The machinery will be used for 8 years, has a salvage value of $8,000, and will be depreciated using the double-declining balance method. Jan 3: Paid December 31 payroll (\"wages payable\") on Jan 1. Jan 4: Payroll taxes withheld (FIT payable & FICA payable) during December are remitted to the IRS. Jan 5: A $500 customer account is written off as uncollectible. Jan 6: Sales on account of 180 units of inventory occurred during January. Jan 8: Sales taxes collected in December 2014 are remitted to the local tax collector. Jan 10: An additional 70 units of inventory were purchased on account for $4,410. Jan 11: Sold 50 units of merchandise inventory for cash totaling $6,825, which includes 5% sales taxes. Jan 12: The equipment purchased in 2013 for $25,000 is sold for $24,500. No additional depreciation is recorded for January. Jan 14: Having sold the equipment, JWC paid off the equipment loan received on November 1 in full. The amount paid was $22,550, which included interest through Jan 14. Jan 15: A portion of the advance order from December (30 units) is delivered. There is no sales tax on this order. Jan 16: (a) Paid employee payroll (in cash). Jan 16: (b) Record the employer's payroll tax expense. Jan 17: Collections from sales on account totaled $5,000. Jan 18: JWC issued 2,500 shares of $3.60 par value common stock for cash at $8 per share. Jan 19: JWC issued 300 shares of $12 par-value preferred stock for cash at $102 per share. Jan 21: JWC Purchased 4,000 shares of its common stock for the treasury at a cost of $16,000. Jan 25: JWC issued a second bond with a face value of $250,000, a stated rate of 10% (used to calculate interest payments), with a maturity of 4 years. At the time of issuance, the market rate (used to calculate the present values) for bonds of similar characteristics was 12%. Jan 28: Declared and paid a $0.50 per share cash dividend on 2,400 shares of $5 par value. Jan 30: Purchased a small company and recorded goodwill for $150,000. (Indefinite life - no record of amortization expense) 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ Below are transactions requiring adjusting entries for January 2015 AJE 1: Record depreciation expense for the truck (Truck) purchased on Jan 1 using the units-of-activity method. During January, the truck is driven 800 miles. AJE 2: Record the depreciation expense for the machinery (Furniture) purchased on Jan 1. AJE 3: Record January rent expired. AJE 4: Accrue January 28 payroll, which will be paid on February 1 and the related payroll tax expense. AJE 5: Record the accrual of interest expense on the bonds issued on Jan 1. AJE 6: Record the accrual of interest expense on the bonds issued on Jan 25. AJE 7: Record the accrual of bad debt expense assuming that $941 is the estimate of uncollectible receivables from the aging schedule. AJE 8: Record the accrual of income tax expense assuming that the tax rate is 25% of income before taxes. 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ Special Note: The chart of accounts for JWC, Inc. includes the following CASH ACCOUNTS RECEIVABLE ALLOWANCE FOR DOUBTFUL ACCOUTNS INVENTORY PREPAID RENT EQUIPMENT ACCUMMULATED DEPRECIATION_EQUIPMENT TRUCK ACCUMMULATED DEPRECIATION_TRUCK FURNITURE ACCUMMULATED DEPRECIATION_ FURNITURE GOODWILL ACCOUNTS PAYABLE SALES TAX PAYABLE WAGES PAYABLE FICA TAX PAYABLE FIT TAX PAYABLE UNEARNED REVENUE INTEREST PAYABLE INCOME TAX PAYABLE STATE UNEMPLOYMENT TAX PAYABLE FEDERAL UNEMPLOYMENT TAX PAYABLE NOTES PAYABLE BONDS PAYABLE PREMIUM ON BONDS PAYABLE DISCOUNT ON BONDS PAYABLE DIVIDENDS COMMON STOCK APIC-CS PREFERRED STOCK APIC-PS TREASURY STOCK RETAINED EARNINGS SALES REVENUE COGS WAGES EXPENSE RENT EXPENSE PAYROLL TAX EXPENSE DEPRECIATION EXPENSE BAD DEBT EXPENSE GAIN ON DISPOSAL INTEREST EXPENSE Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 2 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ INCOME TAX EXPENSE 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ REQUIRED 1: Prepare the debit section of the adjusted trial balance. (17 PTS) JWC, Inc. Trial balance For the period January 1 - January 31, 2014 ACCOUNT NAME DEBIT AMOUNT Total debit = 485,426 ACCOUNT NAME CREDIT AMOUNT Total credit = 485,426 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ REQUIRED 2: Prepare the income statement using the multiple-step format. (15PTS) JWC, Inc. (Multiple-step) Income Statement For the period January 1 - January 31, 2014 SALES REVENUE Less: GROSS PROFIT LESS: OPERATING EXPENSES Total Operating Expenses OPERATING INCOME ADD: Other Revenues & Gains LESS: Other Expenses & Losses INCOME BEFORE TAXES NET INCOME 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ REQUIRED 3: Prepare the Statement of Retained Earnings. (4PTS) JWC, Inc. Statement of Retained Earnings For the period January 1 - January 31, 2015 RETAINED EARNINGS, BEGINNING OF PERIOD ADD: LESS: RETAINED EARNINGS, END OF PERIOD 2 Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 Name ___________________________________ BUA 201 Fall 2015 Project 3 (70 pts) # ___________ REQUIRED 4: Prepare a classified balance sheet. (34 PTS) JWC, Inc. Classified Balance Sheet as of January 31, 2015 ASSETS (13 pts) CURRENT ASSETS (CL) LIABILITIES (13 pts) CURRENT LIABILITIES (CL) Total CA Total CL PLANT ASSETS (PPE) LONG-TERM LIABILITIES (LT) Total LT Total PPE TOTAL LIABILITIES INTANGIBLE ASSETS (IA) STOCKHOLDERS' EQUITY (SE) Total IA Total SE TOTAL ASSETS (= $416,256) TOTAL LIABILITIES & STOCKHOLDERS' EQUITY Maine Business School_Principles of Financial Accounting | Project #3_Fall 2015 2