Name: BUS ADM 201 Introduction to Financial Accounting Fall 2018 Disc #: EXTRA CREDIT III Due at 11:59pm on Saturday, December 15 GRADING: Worth up to 15 points. Carefully READ the requirements on page 2 first, Partially completed problems will earn no credit that means all requirements must be FULLY completed. All work must be completed by hand. If you complete all items as requested, you will cam at least 7.5 points. The remaining points are dependent upon the accuracy of your answers. Round amounts to the nearest dollar, if applicable. Jamukha Corporation prepares annual financial statements. The balance s heet at Deeber 31, 2017, is presented below Jamukha Corporation Balance Sheet December 31, 2017 Asscts 3,750 Accounts payable 32,060 Common stock (SI par) Cash Accounts receivabke Allowance for doubtful accounts 2,000 Paid-in capital in excess of par Common stock 190,000 Inventory 4.250 10,000 64,500 Retained earnings 61,500 Prepaid insurance Equipment A/D Equipment 7,440 280,000 10,000) During 2018 the following transactions occurred: . Purchased $132,000 in ventory on account. Jamukha Corp. uses a perpetual inventory system. 2. Sales of$345,000, plus 5.6% sales tax, were made to customers on account. Cost of goods sold was 190,500 3. Received $31,000 cash down payment for orders that will be shipped next year 4. Issued 15 year, $80,000 face value, 4.5% bonds on July 1 at 103. The bonds were sold to yield an effective annual rate of 4227885%, and they pay intrest every January 1 and July 1. 5 Collected $298,000 on account. 6. Paid general expenses of $49250. 7. Paid $175,170 for amount due to supplier 8. Paid the sales tax collected from customers to the State of Wisconsin. 9. On January 1, Jamukha Corp. sold for $25,000 cash equipment which originally cost $98,000. Accumulated depreciation for this equipment as of December 31, 2017, was $64,000. This transaction is exempt from sales tax. 10. Issued 1.400 shares of $100 par, 7% preferred stock for $210,000 cash. I1. Purchased equipment on July 1, 2018, for $230,000 cash 12. Purchased 750 shares of Jamukha Corp. common stock from a disgruntled shareholder for $42 per share 13. Recorded salaries and payroll taxes. Employee's gross salaries were $80,000. FICA tax was withheld at a rate of 7.65%, Federal income taxes (FIT) of$6.000 were withheld, and state income taxes (SIT) of $3,000 were withheld. The federal unemployment tax (FUTA) rate was 1%, and the state unemployment tax (SUTA) rate was 3.25%. No cash has been paid yet, so record all the amounts due in the appropriate payable accounts 14. The paychecks and payroll taxes from atry #13 were paid 15. Straight-line depreciation with a 8 year useful life and no salvage value is used for equipment purchased in previous years. The equipment purchased on July 1 , 2018 (#l) is depreciated using double-declining balance with a useful life of 20 years and a S30,000 salvage value.(Hint: The equipment was purchased midway through the year) 16. Acenue bond interest payable and amortize bond discount/premium. Jamukha Corp uses effective-interest amortization. (Hint: The bond was issued midway through the year.) 17. The prepaid insurance relates to a policy purchased on December 31,2017. This insurance expires at a rate of $310 per month. Record as a general expense 18. Jamukha estimates that 6.5% of accounts receivable are uncollectible. 19. Jamukha Corp. is an S-corporation and is not subject to income tax REQUIRED: Print out the solution pages for the general joumal, ledger, and worksheet that follow and enter the following transactions.I suggest that you use a pencil a Enter the transactions numbered 1-14 in the general journal provided on the following pages b. Post the journal entries to the kedger accounts for items 1-14. Look at the cash account for an example of how to use the running balance ledger. I have completed the first two lines of it for you. It is a good idea to keep track of whether your balance column is a debit or a credit, particul arly for contra accounts c. Prepare an unadjusted trial balance at December 31, 2018 and enter on the worksheet. d. Works heet requirement: Using your unadjusted trial balance (c) above and the data for adjusting atrics (#15-19), prepare a 12-column worksheet similar to worksheet for Sierra Corporation in Chapter 4 and the prior extra credit assignments. You will not receive any credit if the worksheet is incomplete. To save time, you are not required to formally joumalize or post your adjusting entries (you can just enter them on the worksheet). You are not required to record clos ing entries. Prepare a formal statement of cash flows using the T-account approach. Templates for the statement and the T-account worksheet are attached. (You are not required to formally present the other statements- just complete them on the worksheet e. Journal: Requirement (a) General Journal Debit Credit l. a.3 a.4 a.5 a.6 .8 a.9 a, 10 a, 13 a.14 General Ledger: Requirement (b) CASH Beginnin BALANCE 33,750 DR 50 DR OR 1,000 ACCOUNTS RECEIVABLE DR BALANCE 32,060 DR CR Beginnin 32,060 ALLOWANCE FOR DOUBTFUL ACCOUNTS Beginning DR CR BALANCE NVENTORY Beginning DR CR BALANCE CR BALANC PREPAID INSURANCE Beginnin DR 7,440 7,440 DR DR 280,000 CR BALANC 280,000 DR EQUIPMENT ACCUM DEPRECIATION-EQUIPMENT Beginnin DR CR BALANCE 0,000 10,000 General Ledger: Requirement (b) continued ACCOUNTS PAYABLE Be DR CR BALANCE 44.250 44,250 CR SALARIES PAYABLE DR CR BALANCE SALES TAX PAYABLE DR CR BALANCE FUTA PAYABLE DR CR BALANCE SUTA PAYABLE DR CR BALANCE UNEARNED REVEN DR BALANCE BONDS PAYABLE DR CR BALANCE REMIUM ON BONDS PAYABLE General Ledger: Requirement (b) continued COMMON STOCK (SI PAR) DR CR BALANCE 0,000 10,000 CR PREFERRED SOCK (S100 PAR DR CR BALANCE PAID-IN CAPITAL IN EXCESS OF PAR- COMMON STOCK Beginnin DR CR BALANCE 90,000 190,000 CR PAID-IN CAPITAL IN EXCESS OF PAR- PREFERRED STOCK DR CR BALANCE TREASURY STOCK DR CR BALANCE RETAINED EARNINGS DR CR BALAN LES REVENUE ALANCE OST OF GOODS SOLD BALANC GENERAL EXPENSES DR CR BALANCH SALARIES EXPENSE DR CR BALANCE PAYROLL TAX EXPENSE DR CR BALANCH LOSS ON DISPOSAL DR CR BALANCE Unadjusted Adjus te d DR CR DR CR DR CR DR CR DR CR DR CR Jamukha Corporation Statement of Cash Flows: Requirement (e) For the Year Ended December 31, 2018 Increases Decreases Net Cash From Operating Activities Net Cash From Investing Activities CASH FROM FINANCINGACTIVITIES Net Cash From Financing Activities NET INCREASE IN CASH Cash at beginning of year Cash at end of year Jamukha Corporation Statement of Cash Flows: Requirement (e For the Year Ended December 31, 2018 Increases Decreases Net Cash From Operating Activities CASH FROM INVESTNGATIVITIES Net Cash From Inve sting Activities CASH FROM FINANCING ACTIVITIES: Net Cash From Financing Activities NET INCREASE IN CASH Cash at beginning of year Cash at end of year Stateme nt of Cash Flows T-Account Works heet Re quirement (e) the fomalstatement to show activity within the cash account. On this stat ement, debits to cash comespond to increases and credits correspond to AD- ment Common stock ($1 110,000 10,000 Accounts receivable Acco unts pavable Pref. stock (S100 32,060 44,250 0 Allow. for doubtful accts 2,000 Interest yable PICEP-CS 0 190,000 Une arned re venue PICEP-PS Inventory 64,500 0 0 Pre paid ins urance Bonds pavable Retained earni 7,440 0 61,500 Pre miumon B/P Treasurv stock 0 nt 280,000 0 Name: BUS ADM 201 Introduction to Financial Accounting Fall 2018 Disc #: EXTRA CREDIT III Due at 11:59pm on Saturday, December 15 GRADING: Worth up to 15 points. Carefully READ the requirements on page 2 first, Partially completed problems will earn no credit that means all requirements must be FULLY completed. All work must be completed by hand. If you complete all items as requested, you will cam at least 7.5 points. The remaining points are dependent upon the accuracy of your answers. Round amounts to the nearest dollar, if applicable. Jamukha Corporation prepares annual financial statements. The balance s heet at Deeber 31, 2017, is presented below Jamukha Corporation Balance Sheet December 31, 2017 Asscts 3,750 Accounts payable 32,060 Common stock (SI par) Cash Accounts receivabke Allowance for doubtful accounts 2,000 Paid-in capital in excess of par Common stock 190,000 Inventory 4.250 10,000 64,500 Retained earnings 61,500 Prepaid insurance Equipment A/D Equipment 7,440 280,000 10,000) During 2018 the following transactions occurred: . Purchased $132,000 in ventory on account. Jamukha Corp. uses a perpetual inventory system. 2. Sales of$345,000, plus 5.6% sales tax, were made to customers on account. Cost of goods sold was 190,500 3. Received $31,000 cash down payment for orders that will be shipped next year 4. Issued 15 year, $80,000 face value, 4.5% bonds on July 1 at 103. The bonds were sold to yield an effective annual rate of 4227885%, and they pay intrest every January 1 and July 1. 5 Collected $298,000 on account. 6. Paid general expenses of $49250. 7. Paid $175,170 for amount due to supplier 8. Paid the sales tax collected from customers to the State of Wisconsin. 9. On January 1, Jamukha Corp. sold for $25,000 cash equipment which originally cost $98,000. Accumulated depreciation for this equipment as of December 31, 2017, was $64,000. This transaction is exempt from sales tax. 10. Issued 1.400 shares of $100 par, 7% preferred stock for $210,000 cash. I1. Purchased equipment on July 1, 2018, for $230,000 cash 12. Purchased 750 shares of Jamukha Corp. common stock from a disgruntled shareholder for $42 per share 13. Recorded salaries and payroll taxes. Employee's gross salaries were $80,000. FICA tax was withheld at a rate of 7.65%, Federal income taxes (FIT) of$6.000 were withheld, and state income taxes (SIT) of $3,000 were withheld. The federal unemployment tax (FUTA) rate was 1%, and the state unemployment tax (SUTA) rate was 3.25%. No cash has been paid yet, so record all the amounts due in the appropriate payable accounts 14. The paychecks and payroll taxes from atry #13 were paid 15. Straight-line depreciation with a 8 year useful life and no salvage value is used for equipment purchased in previous years. The equipment purchased on July 1 , 2018 (#l) is depreciated using double-declining balance with a useful life of 20 years and a S30,000 salvage value.(Hint: The equipment was purchased midway through the year) 16. Acenue bond interest payable and amortize bond discount/premium. Jamukha Corp uses effective-interest amortization. (Hint: The bond was issued midway through the year.) 17. The prepaid insurance relates to a policy purchased on December 31,2017. This insurance expires at a rate of $310 per month. Record as a general expense 18. Jamukha estimates that 6.5% of accounts receivable are uncollectible. 19. Jamukha Corp. is an S-corporation and is not subject to income tax REQUIRED: Print out the solution pages for the general joumal, ledger, and worksheet that follow and enter the following transactions.I suggest that you use a pencil a Enter the transactions numbered 1-14 in the general journal provided on the following pages b. Post the journal entries to the kedger accounts for items 1-14. Look at the cash account for an example of how to use the running balance ledger. I have completed the first two lines of it for you. It is a good idea to keep track of whether your balance column is a debit or a credit, particul arly for contra accounts c. Prepare an unadjusted trial balance at December 31, 2018 and enter on the worksheet. d. Works heet requirement: Using your unadjusted trial balance (c) above and the data for adjusting atrics (#15-19), prepare a 12-column worksheet similar to worksheet for Sierra Corporation in Chapter 4 and the prior extra credit assignments. You will not receive any credit if the worksheet is incomplete. To save time, you are not required to formally joumalize or post your adjusting entries (you can just enter them on the worksheet). You are not required to record clos ing entries. Prepare a formal statement of cash flows using the T-account approach. Templates for the statement and the T-account worksheet are attached. (You are not required to formally present the other statements- just complete them on the worksheet e. Journal: Requirement (a) General Journal Debit Credit l. a.3 a.4 a.5 a.6 .8 a.9 a, 10 a, 13 a.14 General Ledger: Requirement (b) CASH Beginnin BALANCE 33,750 DR 50 DR OR 1,000 ACCOUNTS RECEIVABLE DR BALANCE 32,060 DR CR Beginnin 32,060 ALLOWANCE FOR DOUBTFUL ACCOUNTS Beginning DR CR BALANCE NVENTORY Beginning DR CR BALANCE CR BALANC PREPAID INSURANCE Beginnin DR 7,440 7,440 DR DR 280,000 CR BALANC 280,000 DR EQUIPMENT ACCUM DEPRECIATION-EQUIPMENT Beginnin DR CR BALANCE 0,000 10,000 General Ledger: Requirement (b) continued ACCOUNTS PAYABLE Be DR CR BALANCE 44.250 44,250 CR SALARIES PAYABLE DR CR BALANCE SALES TAX PAYABLE DR CR BALANCE FUTA PAYABLE DR CR BALANCE SUTA PAYABLE DR CR BALANCE UNEARNED REVEN DR BALANCE BONDS PAYABLE DR CR BALANCE REMIUM ON BONDS PAYABLE General Ledger: Requirement (b) continued COMMON STOCK (SI PAR) DR CR BALANCE 0,000 10,000 CR PREFERRED SOCK (S100 PAR DR CR BALANCE PAID-IN CAPITAL IN EXCESS OF PAR- COMMON STOCK Beginnin DR CR BALANCE 90,000 190,000 CR PAID-IN CAPITAL IN EXCESS OF PAR- PREFERRED STOCK DR CR BALANCE TREASURY STOCK DR CR BALANCE RETAINED EARNINGS DR CR BALAN LES REVENUE ALANCE OST OF GOODS SOLD BALANC GENERAL EXPENSES DR CR BALANCH SALARIES EXPENSE DR CR BALANCE PAYROLL TAX EXPENSE DR CR BALANCH LOSS ON DISPOSAL DR CR BALANCE Unadjusted Adjus te d DR CR DR CR DR CR DR CR DR CR DR CR Jamukha Corporation Statement of Cash Flows: Requirement (e) For the Year Ended December 31, 2018 Increases Decreases Net Cash From Operating Activities Net Cash From Investing Activities CASH FROM FINANCINGACTIVITIES Net Cash From Financing Activities NET INCREASE IN CASH Cash at beginning of year Cash at end of year Jamukha Corporation Statement of Cash Flows: Requirement (e For the Year Ended December 31, 2018 Increases Decreases Net Cash From Operating Activities CASH FROM INVESTNGATIVITIES Net Cash From Inve sting Activities CASH FROM FINANCING ACTIVITIES: Net Cash From Financing Activities NET INCREASE IN CASH Cash at beginning of year Cash at end of year Stateme nt of Cash Flows T-Account Works heet Re quirement (e) the fomalstatement to show activity within the cash account. On this stat ement, debits to cash comespond to increases and credits correspond to AD- ment Common stock ($1 110,000 10,000 Accounts receivable Acco unts pavable Pref. stock (S100 32,060 44,250 0 Allow. for doubtful accts 2,000 Interest yable PICEP-CS 0 190,000 Une arned re venue PICEP-PS Inventory 64,500 0 0 Pre paid ins urance Bonds pavable Retained earni 7,440 0 61,500 Pre miumon B/P Treasurv stock 0 nt 280,000 0