Please find the files attached (four files), Please show all of your work step by step.

This problem has a value of 10% of the final grade. You are an accountant and have two clients you'll be dealing with during this assignment. JumpinJehosaPhats is a haberdashery (Google it!), and is owned by J.J. Phats. JJ is expanding the company and is in need of advice. He has come to you to discuss the future of the company. Part 1 - Incorporating (25% of grade) Discuss in detail the requirements of incorporating the business, the advantages and disadvantages, and provide JJ with recommendations. Part 2 - Account Prep (25% of grade) Using the data provided, create the owner's equity accounts and the shareholder's equity section of the balance sheet after the incorporation of JumpinJehosaPhats. Part 3 - Expansion Considerations (25% of grade) JJ is in need of raising money to expand the company and has identified the methods that he is considering. Using the information provided, calculate any burden to the corporation and provide recommendations to JJ concerning his options. Part 4 - Cash Flow (25% of grade) Your second client, Bailey's Chocolates, is asking you to produce a Cash flow from Operating Activities. Using the Indirect Method and the information provided, calculate the cash flow from Operating Activities. Be sure to cite your resources and include supporting calculations and evidence to support your positions. Page 1 JumpinJehosaPhats is a small business owned by JJ Phats as the sole proprietor. JJphats is incorporating the business. On January 1, 2012 JumpinJehosaPhats Inc. has been authorized to issue 1,000,000 common shares with a Par Value of $1. In the process of incorporating, the sole proprietor owner's equity accounts must be closed and the equity must now reflect a corporate stockholders' equity account. The books for the Sole Proprietorship indicate the following: JJ Phats deposited $35,000 to start JumpinJehosaPhats JJ Phats contributed $50,000 of equipment to start JumpinJehosaPhats Retained Earnings December 31, 2011 = $150,000 Prepare the Stockholder's Equity Portion of the Balance Sheet on January 1, 2012. JumpinJehosaPhats was incorporated on January 1, 2012 and a year later it needs $10,000,000 to expand operations. JJ Phats is the sole shareholder of the corporation. The corporation is considering three methods to raise the capital: issuing common shares at FMV issuing preferred stock with par = $1000 issuing 10 year bonds with par = $1000 You have been hired to determine the best way for the company to obtain the funds needed which might be a single method or combination of methods. Using the following information, discuss the pros and cons of each method and provide necessary calculations to support the position you recommend. The company is authorized to issue 1,000,000 shares with a par value of $1.00 On January 1, 2013 an appraisal of the company indicates that it has a current value of $25,000,000. On January 1, 2013 current interest rates are 3.5% APR and rising. On December 1, 2012 the competition (LeapinLizards Inc) issued 10,000 ten year cumulative preferred shares with par = $1000 at 3.4% Comprehensive Problem 4: Part 4 Bailey's Chocolates has provided statements of retained earnings, income statements, and balance sheets for the months of January and February 2012. The company wants you to calculate the cash flow from operating activities for the period ending February 2012 using the indirect method. Using the Indirect Method produce a Cash Flow from Operating Activities. Cash Flows from Operating Activities (Indirect Method) Net Cash Flow from Operating Activities Bailey's Chocolates Bailey's Chocolates Income Statement Month Ending January 31, 2012 Income Statement Month Ending February 29, 2012 Revenue Cost of Good Sold Gross Margin Expenses Salary Expense Supplies Expense Office Equipment Expense Rent Expense Insurance Expense Interest Expense-Note Interest Expense-Mortgage Depreciation Expense-Building Depreciation Expense-Equipment Total Expenses Net Income $20,000 (5,000) Revenue Cost of Good Sold Gross Margin Expenses Salary Expense Supplies Expense Office Equipment Expense Rent Expense Insurance Expense Interest Expense-Note Interest Expense-Mortgage Depreciation Expense-Building Depreciation Expense-Equipment Total Expenses Net Income $15,000 900 20 200 1,000 100 100 1,000 1,500 250 $5,070 $9,930 $23,000 (7,000) Retained earnings, January 1, 2012 Net Gain, January 31, 2012 $16,000 1,000 30 225 1,000 100 100 1,000 1,500 250 Less Withdrawals Increase in Retained Earnings Retained earnings, January 31, 2012 Bailey's Chocolates Current Assets Cash $85,260 Accounts receivable 10,600 Inventory 3,220 Supplies 150 Prepaid Office Equipment 150 Prepaid Rent 1,500 Security Deposit 1,500 Prepaid Insurance 400 $102,780 T otal Current Assets Property, Plant & Equipment 498,500 T otal PP & E 8,750 $507,250 T otal Assets $610,030 Current Liabilities Accounts Payable Salary Payable T otal Current Liab Assets Long-Term Liabilities Notes Payable Int Pay-Note Mortgage Payable Int Pay-Mort T otal LT Liabilities $48,000 400 480,000 2,000 $530,400 Total Liabilities $534,100 Shareholder's Equity Common Stock $6,000 APIC-Common 60,000 Retained Earnings 9,930 $75,930 T otal Equity T otal Liab & Equity $610,030 Cash $90,000 Accounts receivable 10,875 Inventory 2,750 Supplies 120 Prepaid Office Equipment 100 Prepaid Rent 500 Security Deposit 1,500 Prepaid Insurance 300 $106,145 T otal Current Assets Property, Plant & Equipment Building 500,000 Acc Dep-Building (3,000) Equipment 9,000 Acc Dep-Equipment (500) Less Withdrawals (Dividends) Increase in Retained Earnings Retained earnings, February 29, 2012 Liabilities Current Assets $3,500 200 $3,700 497,000 T otal PP & E 8,500 $505,500 T otal Assets $611,645 $9,930 $9,930 Retained earnings, February 1, 2012 Net Gain, February 1, 2012 Bailey's Chocolates Liabilities - Bailey's Chocolates Balance Sheet Month Ending February 29, 2012 Assets $$9,930 Statement of Retained Earnings Month Ending February 29, 2012 $5,205 $10,795 Balance Sheet Month Ending January 31, 2012 Building 500,000 Acc Dep-Building (1,500) Equipment 9,000 Acc Dep-Equipment (250) Bailey's Chocolates Statement of Retained Earnings Month Ending January 31, 2012 Current Liabilities Accounts Payable Salary Payable T otal Current Liab $3,200 150 $3,350 Long-Term Liabilities Notes Payable Int Pay-Note Mortgage Payable Int Pay-Mort T otal LT Liabilities $48,000 500 480,000 3,000 $531,500 Total Liabilities $534,850 Shareholder's Equity Common Stock $6,000 APIC-Common 60,000 Retained Earnings 10,795 $76,795 T otal Equity T otal Liab & Equity $611,645 $9,930 $10,795 $20,725 $(9,930) $10,795 $10,795