solve plan b

Numbers File Edit Insert Table Organize Format Arrange View Share Window Help Big Picture Project ACCT2003 20 EY T Insert Table Chart Text 100% Zoom View Add Category Sample Transaction Analysis Instructions Horizontal Transaction Sample Fin Stmt B D Big Picture Project - ACCT2003 2020 Instructions DUE: Wed. 9/30; Thurs 10/1 Grade: 60 points 2 3 4 5 6 Bert is planning to start a bicycle shop. He is exploring different options for financing his business, and trying to decide whether he should focus more on bicycle repairs and maintenance, selling new bicycles or a balance of both activities. The following transactions and financial statements examine the financial mpact of each option he is considering 9 10 Plan B: Primarily equity funded (from stockholders): focus on merchandise sales; Incurs higher 11 rent expense for nicer showroom. 12 13 14 Requirements: You will work as a team, each member will complete one of the given plans 15 1. List the annual transactions for your plan in the Horizontal Transaction Analysis table. (25 points) 16 - Indicate the increase / (decrease) to each account involved in the transaction 17 - Identify the type of cash flow activity for all cash transactions (OA Operating, IA Investing. FA Financing) 18 - Record the Closing Entry for each year by zeroing out the temporary accounts 19 Calculate the total in each column at the end of the each year. 20 - Permanent account balances will carry forward from one year to the next, so year end totals 21 will accumulate through the years. 22 23 2. Use the Horizontal Transaction Analysis balances and the details from the transactions each year 24 to create the following Financial Statements for each year (25 points) 25 Income Statement / Statement of Stockholders Equity / Balance Sheet / Statement of Cash Flows 26 27 3. Use the financial statements at the transaction details to answer the following questions for your plan 28 Show all calculations to support your response. (10 points) 29 a. What is the remaining balance of Notes Payable at 1/1/Yr. 5? 30 b. If another 25% repayment of original note) is made in Yr. 5. What is the interest expense for Yr. 5? 31 c. What is the book value of the equipment at 12/31/Yr. 47 32 d. If the equipment is sold for $5,000 cash on 1/1/Yr. 5, how much gain or (Loss) would there be? 33 e. What is the Debt to Assets Ratio (Total Liabilities/Total Assets) for Year 1 & Year 4? 34 f. What is the Equity to Assets Ratio (Total Stockholders Equity / Total Assets) for Year 1 & Year 42 35 36 37 4. Submit the project (printed out and handed in, or emailed to me at stephanie.wecklernoc.edu) 38 - Turn in the following (make sure to include your name and plan on each sheet) 39 - Horizontal Transaction Analysis 40 - Financial Statements 41 - Calculations and responses to questions 42 SUM 0 AVERAGE MIN 0 MAX 0 COUNTA 0 B D Transactions Plan B 1-1 Start Up Funding Sign Note for $12,000 @ 8% Issue Stock for $51,000 1-2 Purchase Equipment @1/1 Purchase showroom displays for $5,000 cash; SL Depreciation 5 yr. useful life, $0 salvage value 1 1-3 Purchase Inventory for $28,000 cash 2 3 4 15 16 1-4 Service & Sales Revenue Service Revenue $6,000 Sales Rev $50,000; COGS $25,000 17 18 19 20 21 22 1-5 Operating Expenses (Salaries $6,000 Rent $10,000 Insurance & Utilities $4,000) Total Operating Exp. $20,000 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 23 2-1 Purchase Inventory for $30,000 cash 24 25 26 27 28 29 30 31 32 33 34 35 36 37 2-2 Revenue Growth +10% Service Revenue $6,600 Sales Rev $55,000; COGS $27,500 2-3 Operating Expenses (Salaries $6,600 Rent $10,000 Insurance & Utilities $4,000) Total Operating Exp. $20,600 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 38 39 40 SUM 0 AVERAGE MIN 0 B D 42 43 2-4 Dividend Payment Common Stock x 5% 44 45 46 47 Big Picture Project Transactions Plan B 3-1 Purchase Inventory for $40,000 cash 48 49 50 51 52 53 54 55 3-2 Revenue Growth +20% Service Revenue $7,900 Sales Rev $66,000; COGS $35,000 3-3 Debt Repayment @ 1/1/yr3 1/4 of Original Note 56 57 58 59 60 61 62 63 3-4 Operating Expenses (Salaries $7.900 Rent $12,000 Insurance & Utilities $4,400 Advertising $8,000 Maintenance $500) Total Operating Exp. $32,800 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 64 65 66 67 68 3-5 Dividend Payment Common Stock x 10% 69 4-1 Purchase Inventory for $40,000 cash 70 71 72 73 74 75 76 77 4-2 Revenue Growth +15% Service Revenue $9,100 Sales Rev $75,900; COGS $37.950 78 4-3 Debt Repayment 1/1/yr4 1/4 of Original Note 79 SUM 0 AVERAGE MIN o 57 3-5 Dividend Payment Common Stock x 10% 59 O 00 4-1 Purchase Inventory for $40,000 cash 1 2 3 "4 * 4-2 Revenue Growth +15% Service Revenue $9,100 Sales Rey $75,900; COGS $37,950 " O 00001 4-3 Debt Repayment @ 1/1yr4 @ 1 1/4 of Original Note 8 "9 0 31 2 3 000 N 4-4 Operating Expenses (Salaries $9,500 Rent $12,000 Insurance & Utilities $4,400) Total Operating Exp. $25,900 Depreciation Exp. = equip. cost x 175 Interest Exp. = Note Pay. x 8%x12/12 6 7 8 9 0 4-5 Dividend Payment Common Stock x 10% Numbers File Edit Insert Table Organize Format Arrange View Share Window Help Big Picture Project ACCT2003 20 EY T Insert Table Chart Text 100% Zoom View Add Category Sample Transaction Analysis Instructions Horizontal Transaction Sample Fin Stmt B D Big Picture Project - ACCT2003 2020 Instructions DUE: Wed. 9/30; Thurs 10/1 Grade: 60 points 2 3 4 5 6 Bert is planning to start a bicycle shop. He is exploring different options for financing his business, and trying to decide whether he should focus more on bicycle repairs and maintenance, selling new bicycles or a balance of both activities. The following transactions and financial statements examine the financial mpact of each option he is considering 9 10 Plan B: Primarily equity funded (from stockholders): focus on merchandise sales; Incurs higher 11 rent expense for nicer showroom. 12 13 14 Requirements: You will work as a team, each member will complete one of the given plans 15 1. List the annual transactions for your plan in the Horizontal Transaction Analysis table. (25 points) 16 - Indicate the increase / (decrease) to each account involved in the transaction 17 - Identify the type of cash flow activity for all cash transactions (OA Operating, IA Investing. FA Financing) 18 - Record the Closing Entry for each year by zeroing out the temporary accounts 19 Calculate the total in each column at the end of the each year. 20 - Permanent account balances will carry forward from one year to the next, so year end totals 21 will accumulate through the years. 22 23 2. Use the Horizontal Transaction Analysis balances and the details from the transactions each year 24 to create the following Financial Statements for each year (25 points) 25 Income Statement / Statement of Stockholders Equity / Balance Sheet / Statement of Cash Flows 26 27 3. Use the financial statements at the transaction details to answer the following questions for your plan 28 Show all calculations to support your response. (10 points) 29 a. What is the remaining balance of Notes Payable at 1/1/Yr. 5? 30 b. If another 25% repayment of original note) is made in Yr. 5. What is the interest expense for Yr. 5? 31 c. What is the book value of the equipment at 12/31/Yr. 47 32 d. If the equipment is sold for $5,000 cash on 1/1/Yr. 5, how much gain or (Loss) would there be? 33 e. What is the Debt to Assets Ratio (Total Liabilities/Total Assets) for Year 1 & Year 4? 34 f. What is the Equity to Assets Ratio (Total Stockholders Equity / Total Assets) for Year 1 & Year 42 35 36 37 4. Submit the project (printed out and handed in, or emailed to me at stephanie.wecklernoc.edu) 38 - Turn in the following (make sure to include your name and plan on each sheet) 39 - Horizontal Transaction Analysis 40 - Financial Statements 41 - Calculations and responses to questions 42 SUM 0 AVERAGE MIN 0 MAX 0 COUNTA 0 B D Transactions Plan B 1-1 Start Up Funding Sign Note for $12,000 @ 8% Issue Stock for $51,000 1-2 Purchase Equipment @1/1 Purchase showroom displays for $5,000 cash; SL Depreciation 5 yr. useful life, $0 salvage value 1 1-3 Purchase Inventory for $28,000 cash 2 3 4 15 16 1-4 Service & Sales Revenue Service Revenue $6,000 Sales Rev $50,000; COGS $25,000 17 18 19 20 21 22 1-5 Operating Expenses (Salaries $6,000 Rent $10,000 Insurance & Utilities $4,000) Total Operating Exp. $20,000 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 23 2-1 Purchase Inventory for $30,000 cash 24 25 26 27 28 29 30 31 32 33 34 35 36 37 2-2 Revenue Growth +10% Service Revenue $6,600 Sales Rev $55,000; COGS $27,500 2-3 Operating Expenses (Salaries $6,600 Rent $10,000 Insurance & Utilities $4,000) Total Operating Exp. $20,600 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 38 39 40 SUM 0 AVERAGE MIN 0 B D 42 43 2-4 Dividend Payment Common Stock x 5% 44 45 46 47 Big Picture Project Transactions Plan B 3-1 Purchase Inventory for $40,000 cash 48 49 50 51 52 53 54 55 3-2 Revenue Growth +20% Service Revenue $7,900 Sales Rev $66,000; COGS $35,000 3-3 Debt Repayment @ 1/1/yr3 1/4 of Original Note 56 57 58 59 60 61 62 63 3-4 Operating Expenses (Salaries $7.900 Rent $12,000 Insurance & Utilities $4,400 Advertising $8,000 Maintenance $500) Total Operating Exp. $32,800 Depreciation Exp. = equip. cost x 1/5 Interest Exp. = Note Pay. x 8%x12/12 64 65 66 67 68 3-5 Dividend Payment Common Stock x 10% 69 4-1 Purchase Inventory for $40,000 cash 70 71 72 73 74 75 76 77 4-2 Revenue Growth +15% Service Revenue $9,100 Sales Rev $75,900; COGS $37.950 78 4-3 Debt Repayment 1/1/yr4 1/4 of Original Note 79 SUM 0 AVERAGE MIN o 57 3-5 Dividend Payment Common Stock x 10% 59 O 00 4-1 Purchase Inventory for $40,000 cash 1 2 3 "4 * 4-2 Revenue Growth +15% Service Revenue $9,100 Sales Rey $75,900; COGS $37,950 " O 00001 4-3 Debt Repayment @ 1/1yr4 @ 1 1/4 of Original Note 8 "9 0 31 2 3 000 N 4-4 Operating Expenses (Salaries $9,500 Rent $12,000 Insurance & Utilities $4,400) Total Operating Exp. $25,900 Depreciation Exp. = equip. cost x 175 Interest Exp. = Note Pay. x 8%x12/12 6 7 8 9 0 4-5 Dividend Payment Common Stock x 10%