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Module 4 Excel Workbook Assignment MBA 6315 Journal Entry Solution: Background Information: Shoes for You, Inc. (from Module 2) has become a very successful company. During the year ending 2018, they completed the equity transactions listed below in Exhibit 1. The account balances in Exhibit 2 are Pre-Closing amounts for Year-End December 31, 2018 balances and, DO NOT INCLUDE any of the transactions 1 through 6 listed in Exhibit 1. You will update the Cash and Equity T-Account Balances in Part A2, when you post your Journal Entries. (8 points) A1. Prepare the Journal Entries for the items listed below in Exhibit 1. Be sure to date your entries. You do not need to provide explanations. Exhibit 1: 1. On February 1, the company issued 2,000 shares of their $10 PAR value Common Stock for $19 per share. 2. On May 1, the company issued 1,000 shares of 3% Cumulative Preferred Stock for $115 per share. The PAR value of this Preferred Stock is $100 per share. 3. On October 1, the company issued an additional 500 shares of their $10 PAR value Common Stock for $21 per share. 4. On December 1, the company decided to purchase 200 shares of its Common Stock from shareholders to be held in treasury for Employee Bonuses. The company uses the Cost Method to account for Treasury Stock. They paid $22 per share for the stock. 5. On December 20, the company declared a Preferred Dividend that totaled $3,000. 6. The company paid the dividends on December 29, 2018. 7. The company has asked you to create the journal entry to close the income statement accounts (presented in Exhibit 2) on December 31, 2018. Exhibit 2: Shoes for You, Inc. Pre-Closing (and Before Equity JEs) Account Balances YE 2018 Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Prepaid Insurance Building Accumulated Depreciation--Building Debit 350,265 190,476 Credit 1,905 53,440 250 240,000 17,500 Display Equipment 1,200 Accumulated Depreciation--Display Equipment Accounts Payable Salaries and Wages Payable Bank Loan Payable Mortgage Note Payable Common Stock (10,000 shares issued at PAR value) Retained Earnings Sales Revenue Cost of Goods Sold 317,460 Salaries & Wages Expense 120,000 Supplies Expense 1,390 Insurance Expense 1,490 Bad Debt Expense 1,650 Depreciation Expense 6,120 Interest Expense 8,859 Income Tax Expense 53,385 1,345,985 350 7,265 5,290 150,000 166,400 100,000 262,355 634,920 1,345,985 ry Solution: Module 4 Excel Workbook Assignment MBA 6315 A2. Post the Journal Entries, including the Closing Entry, you made in Part A1 to the Cash and Equity Account T-Accounts. The Cash and Common Stock T-Accounts show the Pre-Closing balances listed in Exhibit 2 in Part A1. Posting the Journal Entries will properly update the YE 2018 Cash and Equity Account Balances. (4 points) Check Figure for Part A2: Total Ending Assets = $971,976. T-Account Solution: PCB Cash 350,265 Accounts Payable 7,265 PCB Salaries & Wages Payable 5,290 PCB PCB Accounts Receivable 190,476 Dividends Payable Allowance for Doubtful Accounts 1,905 PCB Bank Loan Payable 150,000 PCB PCB Merchandise Inventory 53,440 Mortgage Payable 166,400 PCB PCB Prepaid Insurance 250 PCB Building 240,000 Accum Deprec-Building 17,500 PCB PCB Display Equipment 1,200 Accum Depre-Display Equip 350 PCB Total Assets = Total Liab + Retained Earnings 262,355 PCB Common Stock 100,000 PCB Sales Revenue 634,920 PCB PCB Cost of Goods Sold 317,460 Salaries & Wage Expense PCB 120,000 PCB Bad Debt Expense 1,650 Depreciation Expense PCB 6,120 PCB Interest Expense 8,859 APIC-Common PCB Supplies Expense 1,390 PCB Insurance Expense 1,490 Preferred Stock APIC-Preferred Treasury Stock Income Tax Expense PCB 53,385 Total Equity Bad Debt Expense Depreciation Expense Interest Expense Income Tax Expense Module 4 Excel Workbook Assignment MBA 6315 A3. Based on your results in Parts A1 and A2, create the Statement of Stockholders' Equity for Shoes for You, Inc. for the Yea Your Column Totals should match the appropriate T-Account balance in Part A2. Note there are no check figures for Part A3. Solution: k Assignment or Shoes for You, Inc. for the Year Ending 2018 in proper format. (14 points) are no check figures for Part A3. Module 4 Excel Workbook Assignment MBA 6315 Helpful Details: 1 B1. Create the Statement of Cash Flows using the Indirect Method from the information provided. Include the required supplemental information regarding interest and taxes, and include any significant non-cash transactions (24 points graded for accuracy and format, including Excel spreadsheet links). Hawaii Boarding, Inc. Balance Sheet December 31, 2015 and 2014 Assets Current Assets Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Total Current Assets Property and Equipment Land Buildings Accumulated Depreciation-Buildings Equipment Accumulated Depreciation-Equipment Leased Warehouse Accumulated Depreciaion--Leased Warehouse Net Property and Equipment Other Assets Investment in Marketable Securities Assets Held for Sale Total Other Assets Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Salaries and Wages Payable Interest Payable Taxes Payable Unearned Revenue Total Current Liabilities 3 4 5 6 2015 $ 2 529,529 164,450 810,810 680 1,505,469 2014 $ 413,900 126,500 772,200 680 1,313,280 7 8 For th 148,000 1,534,000 (268,450) 685,000 (479,500) 360,000 (18,000) 1,961,050 1,774,000 (266,100) 685,000 (411,000) 1,781,900 200,000 200,000 17,000 17,000 3,666,519 3,112,180 141,570 19,791 4,396 27,152 20,900 213,809 128,700 21,990 2,664 23,938 19,000 196,292 Sales Revenue Cost of Goods Sold Gross Profit Operating (Income) Ex Salaries and Wages Insurance Expense Supplies Expense Depreciation Expen Gain on Sale of Bui Other Income and (Ex Dividend Income Interest Expense Long-term Liabilities Capital Lease Liability Note Payable Total Long-term Liabilities Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $ 324,000 429,600 753,600 456,600 456,600 967,409 652,892 Journal Entry for Sale Cash Accumulated Depre 680,000 2,019,110 2,699,110 680,000 1,779,288 2,459,288 To record sale of bu Depreciation from t Statement. 3,666,519 $ 3,112,180 Helpful Details: The company paid dividends to its shareholders at the end of 2015. You need to calculate the amount. The company sold a building (warehouse) in 2015. The building had a historical cost of $240,000 and was sold for $235,000 in cash. See the journal entry for this transaction below. The company purchased land for expansion. The company invested in marketable securities with the intent of holding them long-term. They paid $200,000 for this investment. The company sold an asset they were holding for sale for $17,000. The company obtained a new warehouse through a 20-year capital lease agreement. They made a $36,000 cash principal payment on the first day of the lease term. The company made a payment on their long term note. Check Figures: Cash Provided by Operating Activities is $288,229. Cash Used for Investing Activities is ($96,000). Hawaii Boarding, Inc. Income Statement For the Years Ending December 31, 2015 and 2014 2015 2,115,603 (1,269,362) 846,241 2014 2,014,860 (1,208,916) 805,944 357,853 4,080 7,650 124,850 (31,000) 463,433 344,090 4,080 9,771 112,850 470,791 382,808 335,153 Other Income and (Expenses): Dividend Income Interest Expense Total Other Income and Expenses 5,600 (26,376) (20,776) (15,981) (15,981) Income Before Income Taxes 362,032 319,172 (108,610) (95,752) Sales Revenue Cost of Goods Sold Gross Profit Operating (Income) Expenses: Salaries and Wages Expense Insurance Expense Supplies Expense Depreciation Expense Gain on Sale of Building Total Operating Expenses Income from Operations Tax Expense Net Income 253,422 223,420 Journal Entry for Sale of Building referred to in Item #2 above: Cash 235,000 Accumulated Depreciation 36,000 Building Gain on Sale of Building 240,000 31,000 To record sale of building, removing Building and related Accumulated Depreciation from the Balance Sheet and recording the Gain on the Income Statement. Module 4 Excel Workbook Assignment MBA 6315 B2. (1) Calculate the Operating Cash Flows to Net Sales Ratio; the Operating Income to Net Sales Ratio; and the Net Income to Net Sales Ratio; (2) Calculate the Operating Cash Flow on Total Assets Ratio and the Return on Total Assets Ratio. Be sure to use Average Total Assets in your denominator for these last two ratios (10 pointsgraded for accuracy and format, including Excel spreadsheet links). NOTE--you must include the ratio definition in words and show the numbers you are using in your calculation, in addition to the cell formula that calculates the ratio. There are no Check Figures for Part B2. Solution