- Problem - Paige Co. is a niche furniture manufacturer and retailer who operates mainly in the Carolinas. A partial trial balance showing Paige's equity, revenue and expense balances as of its December 31, 2019 year-end follows: Debits Credits $ 274,520 $ 714,830 89,145 21,690 8,432,265 Dividends Retained earnings (1/1/19) Unrealized holding gain - CKB bonds (1/1/19) Interest revenue Sales revenue Bad debt expense Cost of goods sold Depreciation expense Insurance expense Interest expense Salaries and wages expense Utilities expense 104,710 5,258,345 219,480 92,305 113,925 1,906,670 193,255 In addition, the following information is available for the company for 2019. Unless indicated otherwise, this information has not yet been reflected in the company's accounts. All of the dollar amounts are stated on a before-tax basis. In February 2019, Paige shifted its business strategy, resulting in the October 2019 sale of a component of the company considered a separate major line of business. The sale produced a gain on disposal of $94,280. The operations of the component, prior to the sale in October, produced a loss of $19,415. In preparing its 2019 financial statements, Paige has determined that it must write off $79,510 of its recorded goodwill. At year-end 2019, Paige decided to change its inventory cost flow method from Average Cost to First-in, First-out (FIFO). The effect of the change on 2019 and prior years is as follows: tes) Focus 3100-F19 - TP2 (2) - Saved to my Mac es Mailings Review View ACE ADDE ABCD ACME Abbcode AaB Erhasis Strong 2019 Prior Years Cost of goods sold - Average Cost Cost of goods sold - FIFO $5,258,345 5,079,620 $18,421,000 18,109,000 Note - The cost of goods sold figure in Paige's partial trial balance above reflects use of the old method (Average Cost) for 2019. Paige restructured its ongoing operations during 2019, resulting in restructuring charges of $32,925. At year-end 2019, Paige is reviewing the percentage it uses to estimate bad debts. With economic conditions improving, the company determines that it must decrease the percentage it uses to estimate bad debts from 6.95% to 5.70%. The effect of this change on 2019 income is as follows: Bad debt expense based on a 6.95% rate (old rate) Bad debt expense based on a 5.70% rate (new rate) $104,710 96,530 Note - The bad debt expense figure in the partial trial balance above reflects use of the old rate (6.95%) for 2019. In July 2019, Paige extinguished 7% bonds payable having a book value of $532,590 Paige paid the investors $598,735 to retire these bonds. In 2013, Paige purchased bonds issued by CKB Co., which it continues to hold as an available-for-sale investment. The fair value of Paige's investment decreased in 2019, from $461,880 to $414,915. Note - The $89,145 Unrealized holding gain - CKB bonds (1/1/19) in the partial trial balance above relates to this item and, of course, is stated net of income taxes. In 2017, Paige purchased certain equipment and began using it. In the process of preparing the adjusting entries at year-end 2019, Paige discovered that it mistakenly double-counted the equipment's estimated salvage value in the depreciation calculations for 2017 and 2018. The total amount of understatement of depreciation expense for these two years was $37,615. Focus Note - The discovery and correction of the 2017 and 2018 errors will not change the depreciation expense for 2019. The $219,480 figure in the partial trial balance above is correct. Assume the above amounts are material. Also, assume the income tax rate applicable to all years and all income items is 25%. Finally, note that Paige uses the multiple-step format for the reporting of net income items and the one-income statement approach for the display of other comprehensive income items. - Instructions - Prepare the financial statements for the year ended December 31, 2019 to show the proper reporting of Paige's: (a) income and (b) changes in retained earnings. Prepare these statements in good form, according to GAAP requirements. Refer to models of the financial statements in the textbook (pages 4-1 to 4-25), the practice problems and the class notes and examples. D Focus ed States) Emphasis Heading 1 Normal -Instructions - Prepare the financial statements for the year ended December 31, 2019 to show the proper reporting of Paige's: (a) income and (b) changes in retained earnings. Prepare these statements in good form, according to GAAP requirements. Refer to models of the financial statements in the textbook (pages 4-1 to 4-25), the practice problems and the class notes and examples. Please observe the following checklist of instructions as you complete this assignment: Prepare your financial statements and any supporting analyses using Excel. Give careful attention to your formatting of information. Formatting includes effective presentation of information, correct spelling and capitalization, and proper use of dollar signs, commas, and underscoring. Refer to examples in the text for guidance. Round all dollar amounts you present in your financial statements to the nearest dollar. This assignment is an individual one. The paper you submit for grading should reflect your own thoughts and insights. You are free, though, to discuss the assignment with your classmates. In this context, discuss means verbal communication only. Any capturing or sharing of information in any format (written, electronic, recorded, etc.) is a violation of the ASU Academic Integrity Code. Include the following identifying information in the upper left corner of the first sheet in your spreadsheet file: your 4-digit ID number (in place of your name), . the course name and number (ACC 3100) and the starting time for your section (9:30 a.m., 12:30 p.m. or 2:00p.m.). the term (Fall 2019), and the Technical Problem # (Technical Problem #2). I will give the due date for this assignment via AsULearn and email. In addition to the technical quality, make sure you give proper attention to the presentation of your work (see check box #2 above). I reserve the right to deduct points for work that is difficult to follow. Focus - Problem - Paige Co. is a niche furniture manufacturer and retailer who operates mainly in the Carolinas. A partial trial balance showing Paige's equity, revenue and expense balances as of its December 31, 2019 year-end follows: Debits Credits $ 274,520 $ 714,830 89,145 21,690 8,432,265 Dividends Retained earnings (1/1/19) Unrealized holding gain - CKB bonds (1/1/19) Interest revenue Sales revenue Bad debt expense Cost of goods sold Depreciation expense Insurance expense Interest expense Salaries and wages expense Utilities expense 104,710 5,258,345 219,480 92,305 113,925 1,906,670 193,255 In addition, the following information is available for the company for 2019. Unless indicated otherwise, this information has not yet been reflected in the company's accounts. All of the dollar amounts are stated on a before-tax basis. In February 2019, Paige shifted its business strategy, resulting in the October 2019 sale of a component of the company considered a separate major line of business. The sale produced a gain on disposal of $94,280. The operations of the component, prior to the sale in October, produced a loss of $19,415. In preparing its 2019 financial statements, Paige has determined that it must write off $79,510 of its recorded goodwill. At year-end 2019, Paige decided to change its inventory cost flow method from Average Cost to First-in, First-out (FIFO). The effect of the change on 2019 and prior years is as follows: tes) Focus 3100-F19 - TP2 (2) - Saved to my Mac es Mailings Review View ACE ADDE ABCD ACME Abbcode AaB Erhasis Strong 2019 Prior Years Cost of goods sold - Average Cost Cost of goods sold - FIFO $5,258,345 5,079,620 $18,421,000 18,109,000 Note - The cost of goods sold figure in Paige's partial trial balance above reflects use of the old method (Average Cost) for 2019. Paige restructured its ongoing operations during 2019, resulting in restructuring charges of $32,925. At year-end 2019, Paige is reviewing the percentage it uses to estimate bad debts. With economic conditions improving, the company determines that it must decrease the percentage it uses to estimate bad debts from 6.95% to 5.70%. The effect of this change on 2019 income is as follows: Bad debt expense based on a 6.95% rate (old rate) Bad debt expense based on a 5.70% rate (new rate) $104,710 96,530 Note - The bad debt expense figure in the partial trial balance above reflects use of the old rate (6.95%) for 2019. In July 2019, Paige extinguished 7% bonds payable having a book value of $532,590 Paige paid the investors $598,735 to retire these bonds. In 2013, Paige purchased bonds issued by CKB Co., which it continues to hold as an available-for-sale investment. The fair value of Paige's investment decreased in 2019, from $461,880 to $414,915. Note - The $89,145 Unrealized holding gain - CKB bonds (1/1/19) in the partial trial balance above relates to this item and, of course, is stated net of income taxes. In 2017, Paige purchased certain equipment and began using it. In the process of preparing the adjusting entries at year-end 2019, Paige discovered that it mistakenly double-counted the equipment's estimated salvage value in the depreciation calculations for 2017 and 2018. The total amount of understatement of depreciation expense for these two years was $37,615. Focus Note - The discovery and correction of the 2017 and 2018 errors will not change the depreciation expense for 2019. The $219,480 figure in the partial trial balance above is correct. Assume the above amounts are material. Also, assume the income tax rate applicable to all years and all income items is 25%. Finally, note that Paige uses the multiple-step format for the reporting of net income items and the one-income statement approach for the display of other comprehensive income items. - Instructions - Prepare the financial statements for the year ended December 31, 2019 to show the proper reporting of Paige's: (a) income and (b) changes in retained earnings. Prepare these statements in good form, according to GAAP requirements. Refer to models of the financial statements in the textbook (pages 4-1 to 4-25), the practice problems and the class notes and examples. D Focus ed States) Emphasis Heading 1 Normal -Instructions - Prepare the financial statements for the year ended December 31, 2019 to show the proper reporting of Paige's: (a) income and (b) changes in retained earnings. Prepare these statements in good form, according to GAAP requirements. Refer to models of the financial statements in the textbook (pages 4-1 to 4-25), the practice problems and the class notes and examples. Please observe the following checklist of instructions as you complete this assignment: Prepare your financial statements and any supporting analyses using Excel. Give careful attention to your formatting of information. Formatting includes effective presentation of information, correct spelling and capitalization, and proper use of dollar signs, commas, and underscoring. Refer to examples in the text for guidance. Round all dollar amounts you present in your financial statements to the nearest dollar. This assignment is an individual one. The paper you submit for grading should reflect your own thoughts and insights. You are free, though, to discuss the assignment with your classmates. In this context, discuss means verbal communication only. Any capturing or sharing of information in any format (written, electronic, recorded, etc.) is a violation of the ASU Academic Integrity Code. Include the following identifying information in the upper left corner of the first sheet in your spreadsheet file: your 4-digit ID number (in place of your name), . the course name and number (ACC 3100) and the starting time for your section (9:30 a.m., 12:30 p.m. or 2:00p.m.). the term (Fall 2019), and the Technical Problem # (Technical Problem #2). I will give the due date for this assignment via AsULearn and email. In addition to the technical quality, make sure you give proper attention to the presentation of your work (see check box #2 above). I reserve the right to deduct points for work that is difficult to follow. Focus