Pleas solve Part B and if you can explain your process. Thank You!

HOMEWORK #4 Due October 9, 5:00 pm 10 points Download the Homework 4 Student Workbook" on D2L to answer ALL questions PART A: Sparty Corporation adjusts its accounts only at year-end. The following information is available as a source for preparing adjusting entries at December 31, 2019. 1. During July 2019, Sparty sold 100 one-year subscriptions for their monthly publication at $72 each, with the subscriptions starting October 1. When Sparty received the $7,200 in subscription payments it credited the liability account titled Unearned Subscription Revenue. 2. On November 1, 2019, Sparty paid $6,000 for a 6-month insurance policy. When Sparty paid the $6,000 it recognized the entire amount as a debit to an asset account titled Prepaid Insurance. 3. Sparty failed to recognize $1,500 in rent for December owed to Sparty by one of Sparty's tenant that rents a part of Sparty's building. 4. The Supplies Inventory account had a $15,000 balance at the beginning of the year (January 1, 2019). During the year, $13,000 of supplies were acquired, with the Supplies Expense account debited at the time of purchase. The supplies count at the end of the year (December 31, 2019) showed $11,000 of supplies still on hand. Required: A. For each of the above numbered items, prepare the necessary adjusting journal entry. If no adjusting entry is required, explain why. Put the adjusting journal entries in the worksheet tab titled Part A, Question A. B. Below are 4 adjusting journal entries (AJES) that another firm, Wolverine, failed to make at year end. For each entry NOT MADE indicate the effect that each omitted AJE would have on the Wolverine's financial statements for the year ended 12/31/2019. Use O for overstated, U for understated, and NE for no effect. Organize your answer in tabular form, using the column headings shown below and provided in the worksheet titled "Part A, Question B." Example 0: At year end, Wolverine failed to make the below AJE to record that fact that employees earned $4,000 in wages which will be paid on the next payroll date in January 2019. Compensation Expense (+E, -NI, -R/E, -SE) 4,000 Salaries Payable (+L) 4,000 If that adjustment was not made expenses and liabilities would be understated by $4,000. If expenses are understated, then Net Income and Stockholders' Equity will be overstated. Income Statement Balance Sheet Adjusting Revenue - Expense = Net Income Assets = Liabilities + Stockholders' Equ entry Example 0 U o NE U 0 NE AJE #1: At year end, Wolverine failed to make the below AJE to recognize that a tenant owed Wolverine $1,000 rent for the month of December. The rent is due to Wolverine in January of 2019. Rent Receivable 1,000 Rent Revenue 1,000 AJE #2: At year end, Wolverine failed to make the below AJE to record that Wolverine had some debt that had accrued interest of $400. Interest Expense 400 Interest Payable 400 AJE #3: At year end, Wolverine failed to make the below AJE to record that Wolverine performed $3,000 in services in December that had been prepaid by the customer in November. Note that when the services were paid for in November, Wolverine increased (debited) cash and increased (credited) Unearned Service Revenue, a liability account. Uneamed Service Revenue 3,000 Service Revenue 3,000 AJE #4: At year end, Wolverine failed to make the below AJE to record depreciation of $2,000. Depreciation Expense 2,000 Accumulated Depreciation 2,000 JOURNAL ENTRIES IN THE BOOKS OF SPARTY CORPORATION Date Particulars L/F Debit Credit 31/12/2019 Unearned Subscription A/C 1800 1800 To Subscription revenue A/C (Being Subcription revenue related to current year booked for this year only, 7200/12*3) 2000 2000 31/12/2019 Insurance Expense A/C To Prepaid insurance A/C (Being Insurance expense related to this year booked for this year only, 6000/6*2) 31/12/2019 Accured Rent Alc 1500 1500 To Rent Alc (Being Accured rent recorded as asset in books) 31/12/2019 Supplies inventory A/C 11000 11000 To Supplies Expenses Alc (Being Closing Inventory entry recorded.) PART A QUESTION 2: INCOME STATEMENT BALANCE SHEET Revenue - Expenses = Net Income Assets - Liabilities = Shareholder's equity AJE - 1 U NEU U NEO AJE - 2 NEU O NEU O U NE U NE OU AJE -3 NE UU AJE - 4 NEU O PART B: At the beginning of 2019, the Buckeye Corporation added a new product line to its production and sales. Buckeye's Balance Sheet and Income Statement are provided in the "Homework 4 Student Workbook" in the worksheet titled "Part B Financials." Required: Calculate the following ratios for both 2019 and 2018. Do not retype the amounts used in the ratios (instead refer to the appropriate cells from the provided balance sheet and income statement). Round your answers to 3 decimal places. In 2-3 sentences each, discuss your interpretation of the change in each ratio across the two years, considering the addition of a new product line. Put your answers in the worksheet titled Part B Answer." Use a separate textbox for your discussion of the change in each ratio. a. Total Asset Tumover (Net Sales/Average Total Assets) b. Gross Profit Margin (Gross Profit/Net Sales) C. Net Profit Margin (Net Income/Net Sales) d. Return on Assets (ROA) (Net Income/Average Total Assets) Total assets were $750,000 on December 31, 2017. Assets = Income Statement Adjusting Revenue - Expense =Net Income entry Example 0 NE U 0 1 2 NE 3 4 Balance Sheet Stockholders' Liabilities + Equity U 0 2019 2018 Assets Current Assets: Cash Accounts Receivable Inventory Supplies Prepaid Rent Total Current Assets Property, Plant and Equipment: Equipment Less: Accumulated Depreciation Property, Plant and Equipment, net Total Assets $500,000 28,355 436,200 85,321 20,322 1,070,198 $400,000 72,355 284,513 60,240 15,638 832,746 400,500 45,210 355,290 $1,425,488 332,680 35,291 297,389 $1,130,135 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable Unearned Revenue Income Taxes Payable Total Current Liabilities Long-term Debt Total Liabilities Stockholders' Equity Contributed Capital Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 50,546 48,956 3,521 103,023 369,875 472,898 43,521 35,899 4,561 83,981 352,681 436,662 406,570 546,020 952,590 $1,425,488 320,000 373,473 693,473 $1,130,135 Net Sales Cost of Sales Gross Profit 2019 $1,000,825 528,690 472,135 2018 $886,972 452,388 434,584 Salaries and Wages Expense Rent Expense Depreciation Expense Other Operating Expenses 90,320 40,500 38,652 35,217 89,520 32,040 29,569 28,980 Operating costs and Expenses Operating Income 204,689 267,446 180,109 254,475 Interest Income Interest Expense Income before Taxes Income Tax Expense Net Income 852 531 267,767 22,314 $245,453 523 623 254,375 12,513 $241,862 Ratio Analysis 2019 2018 Total Asset Turnover Gross Profit Margin Net Profit Margin ROA