Reading Readiness, Inc. has provided you its list of accounts and balances as of January 31. The Controller has asked you to prepare an Income Statement for the month ended January 31. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, =B5" was entered, the formula would output the result from cell B5, or $37,500 in this example. Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: + (plus sign to add), - (minus sign to subtract). * (asterisk sign to multiply), and/(forward slash to divide). From the Excel Simulation below, if in a blank cell "=C11+C12" was entered the formula would add the values from those cells and output the result, or 28,800 in this example. If using the other math symbols the result would output an appropriate answer for its function. SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell "=SUM(C11,C12,C13)" was entered, the formula would output the result of adding those three separate cells, or 103,800 in this example. Similarly, if in a blank cell "ESUM(C11:C13)" was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 103,800 in this example. IF function: Allows you to test a condition and return a specific value is the result is true and different value if the result is false. The syntax of the IF function is "=IF(test_condition,value_it_true,value_it_false)" and specific considerations need to be made when using this function. The test_condition argument is an evaluation of the status of a cell, such as if the value of a cell is greater than, less than or equal to another number or cell. The value_if_true and value_it_false arguments will return any specific result for each option, such as another cell reference, a value, or text. Throughout the entire equation, if text is being used in the test_condition, value_if_true, or value_if_false arguments then the text itself should be entered in quotations so that Excel will recognize the text as a "string of text" instead of another function. From the Excel Simulation below, if in a blank cell "=IF(85>20000,"Cash is great", "Cash is bad") was entered, the formula would output the result of the value_it_true since the test_condition would be result as true, or in this case the text "Cash is great". Excel processes the IF function by separating it out into separate parts. First the test_condition - Excel thinks, find cell B5 and determine if the value is greater than 20000. Once Excel determines if the result of that test_condition is TRUE or FALSE, it will return the value_if_true or value_if_false. XI A. Merchandising operations and the multi-step income statement - Excel PAGE LAYOUT FORMULAS DATA REVIEW VIEW ? 3 - 5 X Sign In FILE HOME INSERT Paste Calibri 11 -A % BIU. A Alignment Number Conditional Format as Cell Cells Formatting Table Styles Font Styles fx Noodles Unlimited, Inc. sells swimming pool toys. The following adjusted trial Clipboard A1 D B Noodles Unlimited, Inc. sells swimming pool toys. The following adjusted trial balance 2 is for the year ended December 31, 20X1. 3 4 Account Titles Debits Credits 5 Cash $37,500 6 6 Accounts Receivable 28,600 7 Inventory 43,300 8 Prepaid Rent 2.000 9 Equipment 69.000 10 Accumulated Depreciation $20,700 11 Accounts Payable 8,800 12 Notes Payable 20,000 13 Common Stock 75,000 14 Retained Earnings, January 1, 20X1 31,800 15 Sales Revenue 175,500 16 Sales Returns and Allowances 4,700 17 Sales Discounts 6.000 18 Cost of Goods Sold 67,700 19 Salaries and Wages Expense 25,900 20 Depreciation Expense 13.800 21 Rent Expense 24.000 22 Interest Expense 1.600 23 Income Tax Expense 7.700 24 Totals $331.800 $3318001 Sheet1 E 100% READY Attempt(s) Hint 26 Required: 27 1. Prepare a multistep income statement that would be used for internal reporting purposes. 28 Note: When more than one correct account could appear in a cell, list items in order of largest to 29 smallest dollar amounts. Use cell referencing to select account titles and values. 30 All numbers should appear as positive numbers. 31 2. After entering the formula in cell B52, use the Excel IF function to label cell A52 as either 32 "Net Income" or "Net Loss" as appropriate based on the value calculated in cell B52. 33 Merchandising operations and the multi-step income statement - Excel ? FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In Calibri 11 PM % Paste B IU- Cells Alignment Number Conditional Format as Formatting Table' Styles Styles Clipboard Font A1 fox Noodles Unlimited, Inc. sells swimming pool toys. The following adjusted trial B D 34 A NOODLES UNLIMITED, INC. Income Statement For the Year Ended December 31, 20X1 35 36 37 38 Less: 39 40 41 Net Sales 42 43 Gross Profit 44 Expenses: 45 46 47 48 Income from Operations 49 50 Income before Income Tax Expense 51 52 53 54 3. Compute the gross profit percentage. 55 Note: Make sure to include *100 at the end of your formula 56 in order to convert the decimal to a percentage. 57 Gross Profit Percentage Sheet1 Inercent 1 E + 100% READY Attempt(s) Hint Jordan Company's annual accounting year ends on December 31. It is now December 31, 2018, and all of the 2018 entries have been made except for the following: a. The company owes interest of $960 on a bank loan. The interest will be paid when the loan is repaid on September 30, 2019. No interest has been recorded. b. On September 1, 2018, Jordan collected six months' rent of $8,700 on storage space. At that date, Jordan debited Cash and credited Deferred Revenue for $8,700. c. The company earned service revenue of $4,600 on a special job that was completed December 29, 2018. Collection will be made during January 2019. No entry has been recorded. d. On November 1, 2018, Jordan paid a one-year premium for property insurance of $5,760, for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount. e. At December 31, 2018, wages earned by employees but not yet paid totaled $2,400. The employees will be paid on the next payroll date, January 15, 2019. f. Depreciation of $2,300 must be recognized on a service truck purchased this year. g. The income after all adjustments other than income taxes was $43,000. The company's income tax rate is 20%. Compute and record income tax expense. Required: Determine the accounting equation effects of each required adjustment. TIP: The first transaction is done for you as an example. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) Transaction Assets Liabilities + Stockholders' Equity Interest Expense a. Interest Payable 960 (960) b. c. d. e. f. g. On December 31, 2018, Alan and Company prepared an income statement and balance sheet but failed to take into account four adjusting journal entries. The income statement, prepared on this incorrect basis, reported income before income tax of $26,000. The balance sheet (before the effect of income taxes) reflected total assets, $82,000; total liabilities, $36,000; and stockholders' equity, $46,000. The data for the four adjusting journal entries follow: a. Effect of Amortization of $7,200 for the year on software was not recorded. b. Salaries and Wages amounting to $16,200 for the last three days of December 2018 were not paid and not recorded (the next payroll will be on January 10, 2019). c. Rent revenue of $3,600 was collected on December 1, 2018, for office space for the three-month period December 1, 2018, to February 28, 2019. The $3,600 was credited in full to Deferred Revenue when collected. d. Income taxes were not recorded and not paid. The income tax rate for the company is 30%. Required: Complete the following table to show the effects of the four adjusting journal entries. (Negative amounts should be indicated by a minus sign.) Items Net Income Total Assets Total Liabilities Stockholders' Equity $ 36,000 $ 46,000 $ 26,000 $ 82,000 Amounts reported a. Effect of amortization b. Effect of salaries and wages c. Effect of rent revenue Adjusted balances d. Effect of income tax Correct amounts $ 0 $ 0 $ 0 $ 0