* More Info li KAC is a manufacturer of kitchen appliances. KAC markets its products via retail stores that are operated as franchises. As a KAC franchisee, King Appliance Center-Rapids City will receive many benefits, including having the exclusive right to sell KAC brand appliances in Rapids City. KAC appliances have an excellent reputation and the KAC name and logo are readily recognized by consumers. KAC also manages national television advertising campaigns that benefit the franchisees. In exchange for these benefits, King Appliance Center-Rapids City will pay an annual franchise fee to KAC based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. In addition to purchasing the franchise, King Appliance Center-Rapids City will also purchase land with an existing building to use for its retail store, store fixtures, and office equipment. The business will purchase appliances from KAC and resell them in its store, primarily to local building contractors for installation in new homes. More Info - following hter-R ter (KA to view art of ac eginning to view DITUT nise ash King Appliance Center-Rapids City Chart of Accounts Cash Common Stock Petty Cash Retained Earnings Accounts Receivable Dividends Allowance for Bad Debts Sales Revenue Merchandise Inventory Interest Revenue Office Supplies Cost of Goods Sold Prepaid Insurance Franchise Fee Expense Interest Receivable Salaries Expense Notes Receivable Utilities Expense Land Insurance Expense Building Supplies Expense Accumulated Depreciation-Building Bad Debt Expense Store Fixtures Bank Expense Accumulated Depreciation Store Fixtures Credit Card Expense market v ash and $710,0 list or en (SII More Info ter (KA o view rt of ac eginning to view Merchandise Inventory Office Supplies Prepaid Insurance Interest Receivable Sora Notes Receivable mise ash Interest Revenue Cost of Goods Sold Franchise Fee Expense Salaries Expense Utilities Expense Insurance Expense Supplies Expense Bad Debt Expense Bank Expense Credit Card Expense Depreciation Expense Building Depreciation Expense-Store Fixtures Depreciation Expense-Office Equipment Amortization Expense-Franchise Interest Expense Cash Short and Over Land Building Accumulated Depreciation-Building Store Fixtures Accumulated Depreciation-Store Fixtures Office Equipment Accumulated Depreciation - Office Equipment Franchise Accounts Payable Interest Payable Notes Payable cash and , $710,0 pllow ( view th of acco inning view th a. Received $560,000 cash and issued common stock. Opened a new checking account at Rapids City National Bank and deposited the cash received from the stockholders. b. Paid $47,000 cash for a KAC franchise. Paid $370,000 cash and issued a $450,000, 10-year, 6% notes payable for land with an existing building. The assets had the following market values: Land, $110,000; Building, $710,000. Paid $112,500 for store fixtures. e. Paid $60,000 for office equipment f. Paid $1,100 for office supplies. Paid $3,800 for a two-year insurance policy. h. Purchased appliances from KAC (merchandise inventory) on account for $420,000. I. Established a petty cash fund for $180. Sold appliances on account to LMN Contractors for $200,000, terms n/30 (cost, $80,000) k. Sold appliances to Ferris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 12% note. Recorded credit card sales of $85,000 (cost, $37,000), net of processor fee of 2%. m. Received payment in full from LMN Contractors. n. Purchased appliances from KAC on account for $700,000. Made payment on account to KAC, $310,000. Sold appliances for cash to CB Home Builders for $390,000 (cost, $191,000). n and is 710,000 arket j. Sold appliances on account to LMN Contractors for $200,000, terms n/30 (cost, $80,000) Sold appliances to Ferris Contracting for $140,000 (cost, $61,000), receiving a 6-month, 12% note. 1. Recorded credit card sales of $85,000 (cost, $37.000), net of processor fee of 2%. m. Received payment in full from LMN Contractors. n. Purchased appliances from KAC on account for $700,000. o. Made payment on account to KAC, $310,000. Sold appliances for cash to CB Home Builders for $390,000 (cost, $191,000). Received payment in full on the maturity date from Ferris Contracting for the note. Sold appliances to Zeard Contracting for $230,000 (cost, $116,000), receiving a 9-month, 12% note. S. Made payment on account to KAC, $520,000. t. Sold appliances on account to various businesses for $1,030,000, terms n/30 (cost, $412,000). Collected $690,000 cash on account v. Paid cash for expenses: Salaries, $160,000; Utilities. $9.000 Replenished the petty cash fund when the fund had $84 in cash and petty cash tickets for $84 for office supplies. X. Paid dividends, $20,000. y. Paid the franchise fee to KAC of 5% of total sales of $2,075,000. N AUH Lene Rablos Cil completed the fol -(KA A Requirement of ac inning wiew Tora 1. Record the transactions in the general journal. Omit explanations. 2. Post to the general ledger. 3. It is a common business practice to reconcile the bank accounts on a monthly basis. However, in this problem, the reconciliation of the company's checking account will be done at the end of the year, based on an annual summary. Reconcile the bank account by comparing the following annual summary statement from Rapids City National Bank to the Cash account in the general ledger. Record journal entries as needed and post to the general ledger. Use transaction z as the posting reference. Beginning Balance, January 1, 2018 Deposits and other credits: mari h and 710,0 560,000 83,300 200,000 390,000 690,000 1,100 Interest Revenue 1.924,400 tor er Checks and other debits: EFT to Bank Checks 100 Chec Print Done ter (KA Requirement to view art of a weginning to view Ura 1,100 1,924,400 Interest Revenue Checks and other debits: EFT to Bank Checks Checks: 100 chise ash 47,000 370,000 60,000 112,500 180 cash and g, $710,0 3,800 1,100 310,000 520,000 169.000 2,000 (1,595,680) Bank service charge 328,720 Ending balance, December 31, 2018 "Bank Checks is a company that prints business checks (considered ny list or er TUUSILY CURRICULUI O Requirement *Bank Checks is a company that prints business checks (considered a bank expense) for King Appliance Center---Rapids City In preparation for preparing the adjusting entries, complete depreciation schedules for the first five years for the depreciable plant assets, assuming the assets were purchased on January 2, 2018: a. Building, straight-line, 30 years, $50,000 residual value. b. Store Fixtures, straight-line, 15 years, no residual value. c. Office Equipment, double-declining-balance, 5 years, $6,000 residual value. 5. Record adjusting entries for the year ended December 31, 2018: a. One year of the prepaid insurance has expired. b. Management estimates that 6% of Accounts Receivable will be uncollectible. c. An inventory of office supplies indicates $934 of supplies have been used. d. Calculate the interest earned on the outstanding Zeard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. CH Print Done w mark and 10,0 d. Calculate the interest earned on the outstanding Zeard Contracting note receivable. Assume the note was received on October 31. Round to the nearest dollar. e. Record depreciation expense for the year. f. Record amortization expense for the year on the franchise, which has a 10-year life. g. Calculate the interest owed on the note payable. Assume the note was issued on January 1. 6. Post adjusting entries and prepare an adjusted trial balance. 7. Prepare a multi-step income statement and statement of retained earnings for the year ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume Interest Receivable is a current asset and Interest Payable is a current liability 8. Evaluate the company's success for the first year of operations by calculating the following ratios. Round to two decimal places. Comment on the results. a. Liquidity: i. Current ratio ii. Acid-test ratio iii. Cash ratio b. Efficiency: i. Accounts receivable turnover ii. Day's sales in receivables ii. Asset turnover iv. Rate of return on total assets corer Ched