Submission information:

Your assignment submission must include both an Excel spreadsheet (electronically submitted) using the template provided and a printed report of your Excel spreadsheet. The printed report will be marked for ease of readability, good formatting, proper content (showing your work), stapled, all names are properly spelled out with student numbers etc. You must also submit your Excel spreadsheet through Blackboard.

Please consult the marking rubric for this assignment posted in Blackboard.

• Management has been going over the list of accounts receivable for possible accounts that are not collectible. One account for $700 must be written off. In the past, 5% of the balance of all accounts receivable has been the basis of an estimate for the required balance in the allowance for doubtful accounts. Management feels that this estimate should be followed for 2017.
• After doing a count of supplies on hand, management determined that $400 of supplies remained unused at December 31, 2017.
• The account balance in Prepaid Insurance of $4,000 represents the annual cost of the renewal of all of Erskine's insurance policies that expire in one year. The policies' coverage started April 1, 2017.
• FV-NI Investments are long-term investments. The fair value of the portfolio of investments was $22,500 at December 31, 2017.
• In January 2017, some old equipment was sold for proceeds of $300 cash. The entry made when depositing the cash was debit Cash, credit Gain on Disposal of Equipment. The original cost of the equipment was $4,300 and the accumulated depreciation was $4,200 up to the date of sale.
• The depreciation expense for the remaining equipment was calculated to be $7,200 for the 2017 fiscal year.
• The notes receivable from customers are due October 31, 2020, and bear interest at 5%, with interest paid semi-annually. The last interest collected related to the notes was for the six months ended October 31, 2017.
• Bank loans are demand bank loans for working capital needs and vary in amount as the needs arise. The bank advised that the interest charge for December 2017 that will go through on the January 2018 bank statement is in the amount of $200.
• Unpaid salaries and wages at December 31, 2017, totalled $790. These will be paid as part of the first payroll of 2018.
• After some analysis, management informs the accountant that the Unearned Revenue account should have a balance of $1,000.
• Erskine is being sued by one of its former clients for $50,000 for giving bad advice and instructions. Upon discussion with legal counsel, it has been agreed that it will likely take $5,000 to settle this dispute out of court. The settlement is expected to occur in 2019. No entry has yet been recorded.
• The accountant is told that a sublet lease arrangement for some excess office space has been negotiated and signed. It will provide Erskine with rent revenue starting on February 1, 2018, at a rate of $400 per month.
• Erskine has been making income tax instalments as required by the Canada Revenue Agency. All instalment payments have been debited to the Income Taxes Payable account.
• After recording all of the necessary adjustments and posting to the general ledger, the accountant prepared the tax returns, and determined that a tax rate of 25% needed to be applied to the income before income tax amount. The necessary adjusting entry for taxes has not yet been recorded. Show your calculations of income taxes at the bottom of your Adjusted Trial Balance.
• The cash is shown net of a bank overdraft of $8,000. The bank overdraft relates to a bank account held at a different bank from the account with the cash balance.

See next page for instructions

Instructions

ALL WORK MUST BE DONE IN EXCEL SPREADSHEET TEMPLATE PROVIDED.

• Prepare all necessary adjusting and correcting entries required based on the information given, up to item 13. If no entry is required, write no entry.
  • Use the General Journal tab in the template provided. Show all calculations directly below the adjusting entry.
• Using the tab labelled Adjusted Trial Balance, enter the amounts from the unadjusted trial balance in your Excel spreadsheet. Using cell-referencing, post the journal entries in adjustment columns to arrive at an adjusted trial balance.
• Using the adjusted trial balance columns of your worksheet, calculate the amount of income before income taxes. Use the information provided in item 14 to record income tax expense for the year in the General Journal tab.
• You will need to update your Adjusted Trial Balance.
• Prepare a single-step statement of income, a statement of retained earnings, and a statement of financial position for 2017.
• All data must be cell-referenced to your adjusted trial balance.
• At the last minute, the accountant revealed that the company has disposed of its software development division. You are asked to prepare a revised Income Statement for the year ended December 31, 2017 using the additional information below regarding the operations of the software development division. This information is already been included in the amounts listed in the unadjusted trial balance at December 31, 2017. The gain on the sale of the assets related to equipment in the discontinued division. Before its disposal, the division reported the following for 2017:

Service Revenue $42,000

Rent expense 6,000

Salaries and wages expense 15,000

Depreciation of division equipment 1,000

Assume that in February 2018, Erskine approaches its bank for another bank loan, based on its statement of financial position as at December 31, 2017. Your manager would like you to restate the statement of financial position and not show the bank overdraft. He tells you that: this account normally has a positive balance and the overdraft has already been repaid by now, so why bother showing it. The terms of the new bank loan would require that Erskine maintain a current ratio of 2.0. As Erskines bank manager, discuss the importance of the presentation of the bank overdraft in the statement of financial position as at December 31, 2017. Is this an ethical dilemma? What should you do?

Intermediate Accounting 1 Assignment Chapters 3, 4 and 5 This assignment will include substantial marks for formatting. Good formatting includes neat, legible work. Material shouldn't 'over flow' onto another page. If the solution takes more than 1 page to present, there should be a logical break. Excel spreadsheets should include ALL cell formulas within the cell - we will be examining all cell formulas - as well calculations resulting from a cell calculation should then be linked back to the cell in which the number was first calculated. Significant marks will be deducted if you do not use formulas and cell linking. Your name(s) and student numbers need to be on the paper copy you hand in (only one copy per group is to be handed in), and it must be stapled. Submission information: Your assignment submission must include both an Excel spreadsheet (electronically submitted) using the template provided and a printed report of your Excel spreadsheet. The printed report will be marked for ease of readability, good formatting, proper content (showing your work), stapled, all names are properly spelled out with student numbers etc. You must also submit your Excel spreadsheet through Blackboard. Please consult the marking rubric for this assignment posted in Blackboard. ALL ANSWERS MUST BE LINKED TO YOUR PROBLEM DATA SO THAT ANY CHANGE IN ANY OF THE AMOUNTS FLOWS THROUGH TO THE SUBSEQUENT PARTS. YOU MUST USE CELL-REFERENCES AND FORMULAS TO BUILD YOUR FINANCIAL STATEMENTS. NOT USING THE CAPABILITIES OF EXCEL (I.E. TYPING IN NUMBERS CALCULATED OUTSIDE OF YOUR SPREADSHEET) WILL RESULT IN SIGNIFICANT LOSS OF MARKS. ACC2204 FALL 2016 ASSIGNMENT Erskine Consulting Ltd. has been in business for several years, providing software consulting to its customers on an annual contract or special assignment basis. All work is done over the Internet, although some travel is occasionally required for meeting with customers to negotiate contracts and renewals of contracts, as well as resolving possible disputes in invoicing for their services. Erskine operates out of rented premises and has a modest investment in equipment that is used by the consulting team. Erskine is a private company that follows ASPE and has a calendar year-end. At the end of each year, Erskine obtains the services of an accountant to complete the annual accounting cycle of the business and prepare any year-end adjusting of journal entries, financial statements, and corporate tax returns. Upon arrival in early 2018, the accountant was given an unadjusted trial balance and obtained the following additional information to complete his work. ERSKINE CONSULTING LTD. Unadjusted Trial Balance December 31, 2017 Account Debit Credit Petty cash $600 Cash 18,500 Accounts receivable 44,700 Allowance for doubtful accounts 1,800 Interest receivable 0 Prepaid insurance 4,000 Supplies 2,000 FV-NI investments 20,000 Notes receivable 25,000 Equipment 94,000 Accumulated depreciationequipment 36,000 Goodwill 22,000 Bank loans 18,000 Accounts payable 9,950 Salaries and wages payable 0 Accrued liabilities 0 Unearned revenue 4,200 Litigation liability 0 Income tax payable 30,000 Common shares 36,000 Retained earnings 57,800 Dividends 26,000 Service revenue 242,768 2 ACC2204 FALL 2016 ASSIGNMENT ERSKINE CONSULTING LTD. Unadjusted Trial Balance December 31, 2017 Interest revenue 1,042 Unrealized gain or lossFV-NI 0 Gain on disposal of equipment 300 Depreciation expense 0 Office expense 4,100 Travel expense 6,700 Insurance expense 900 Interest expense 1,300 Utilities expense 750 Rent expense 54,000 Salaries and wages expense 49,510 Supplies expense 0 Bad debt expense 0 Telephone and Internet expense 3,200 Repairs and maintenance expense 600 Litigation expense 0 Income tax expense 0 $407,860 $407,860 Additional information: 1. Management has been going over the list of accounts receivable for possible accounts that are not collectible. One account for $700 must be written off. In the past, 5% of the balance of all accounts receivable has been the basis of an estimate for the required balance in the allowance for doubtful accounts. Management feels that this estimate should be followed for 2017. 2. After doing a count of supplies on hand, management determined that $400 of supplies remained unused at December 31, 2017. 3. The account balance in Prepaid Insurance of $4,000 represents the annual cost of the renewal of all of Erskine's insurance policies that expire in one year. The policies' coverage started April 1, 2017. 4. FV-NI Investments are long-term investments. The fair value of the portfolio of investments was $22,500 at December 31, 2017. 5. In January 2017, some old equipment was sold for proceeds of $300 cash. The entry made when depositing the cash was debit Cash, credit Gain on Disposal of Equipment. The original cost of the equipment was $4,300 and the accumulated depreciation was $4,200 up to the date of sale. 6. The depreciation expense for the remaining equipment was calculated to be $7,200 for the 2017 fiscal year. 3 ACC2204 FALL 2016 ASSIGNMENT 7. The notes receivable from customers are due October 31, 2020, and bear interest at 5%, with interest paid semi-annually. The last interest collected related to the notes was for the six months ended October 31, 2017. 8. Bank loans are demand bank loans for working capital needs and vary in amount as the needs arise. The bank advised that the interest charge for December 2017 that will go through on the January 2018 bank statement is in the amount of $200. 9. Unpaid salaries and wages at December 31, 2017, totalled $790. These will be paid as part of the first payroll of 2018. 10. After some analysis, management informs the accountant that the Unearned Revenue account should have a balance of $1,000. 11. Erskine is being sued by one of its former clients for $50,000 for giving bad advice and instructions. Upon discussion with legal counsel, it has been agreed that it will likely take $5,000 to settle this dispute out of court. The settlement is expected to occur in 2019. No entry has yet been recorded. 12. The accountant is told that a sublet lease arrangement for some excess office space has been negotiated and signed. It will provide Erskine with rent revenue starting on February 1, 2018, at a rate of $400 per month. 13. Erskine has been making income tax instalments as required by the Canada Revenue Agency. All instalment payments have been debited to the Income Taxes Payable account. 14. After recording all of the necessary adjustments and posting to the general ledger, the accountant prepared the tax returns, and determined that a tax rate of 25% needed to be applied to the income before income tax amount. The necessary adjusting entry for taxes has not yet been recorded. Show your calculations of income taxes at the bottom of your Adjusted Trial Balance. 15. The cash is shown net of a bank overdraft of $8,000. The bank overdraft relates to a bank account held at a different bank from the account with the cash balance. See next page for instructions Instructions ALL WORK MUST BE DONE IN EXCEL SPREADSHEET TEMPLATE PROVIDED. 4 (a) (b) (c) (d) ACC2204 FALL 2016 ASSIGNMENT Prepare all necessary adjusting and correcting entries required based on the information given, up to item 13. If no entry is required, write \"no entry\". Use the \"General Journal\" tab in the template provided. Show all calculations directly below the adjusting entry. Using the tab labelled \"Adjusted Trial Balance\A PowerPoint Demonstration GIVEN DATA: Sales units Income Statement For the month of June Sales Less: Variable expenses Contribution Margin Less: Fixed Expenses Operating income (loss) SOLUTIONS 500 bicycles Part (1) Per Unit $ 250,000 $ 500 150,000 300 100,000 $ 200 80,000 $ 20,000 Part 2: Contribution Margin 215000 Less: Fixed Expenses Operating income (loss) % 100% 60% 40% Correct Correct Correct Correct Correct $ Correct $ 86,000 80,000 6,000 $ 20,000 Correct $ 8,000 10,000 (2,000) Correct 110,200 100,000 10,200 Correct Correct Correct Correct Correct Part 3: Increased Contribution Margin Required: Part 1 Part 4: Increased contribution margin Increased fixed expenses Increased (decreased) operating income Complete the per unit and % columns of the contribution format income statement Part 2 $ Correct Correct 430 bicycles Estimate operating income if Racing Bicycles sells Part 3 How much will contribution margin increase if sales increase by $ 50,000 $ 40 10,000 Part 5: Expected contribution margin Current contribution margin Increased (decreased) contribution margin Part 4 Increase in sales units (500 to 540) Increase in monthly Advertising Part 5 $ Increase in variable costs per unit 10 580 Sales units Part 6 Reduction in selling price per bicycle Increase in monthly Advertising $ $ 20 15,000 650 $ $ 15 6,000 575 Sales units Part 7 Sales commission per bicycle sold Decrease in sales salaries Sales units $ $ Correct Correct Part 6: Expected contribution margin Current contribution margin Increased (decreased) contribution margin Increased fixed expenses Increased (decreased) operating income $ 117,000 100,000 17,000 15,000 2,000 Part 7: Expected contribution margin Current contribution margin Increased (decreased) contribution margin Add: Decreased fixed expenses Increased (decreased) operating income $ $ $ $ $ 106,375 100,000 6,375 6,000 12,375 Correct $ 200,000 400 Correct $ Correct Correct Correct Correct Correct Correct Correct Correct Part 8 Sales units $ Increase in monthly operating income 150 3,000 Part 8: Selling price per bicycle Part 9 Part 9: Breakeven sales Breakeven sales units Using the contribution margin method, calculate Racing Bicycle's breakeven point in sales dollars and sales units Part 10 Part 10: Number of bicyles to earn target profit Using the contribution margin method, calculate how many bicycles need to be sold to $ 100,000 earn an operating income of: Part 11 Part 11: Sales units $ 100,000 40% Desired after-tax profit Income tax rate Part 12: Margin of Safety Margin of Safety % Margin of Safety in units Part 12 $ 250,000 Actual Sales Part 13 Part 13: Degree of Operating Leverage Income from 10% increase in sales 10% Increase in sales Part 14 Sales Less: Variable expenses Contribution Margin Less: Fixed Expenses Operating income (loss) Sales Mix (in dollars of sales) Correct Income Statement For the month of June Bicycles Carts $ 250,000 100.0% $ 300,000 150,000 60.0% 135,000 $ 100,000 40.0% $ 165,000 45% 55% Part 14: Breakeven total sales dollars Total 100.0% $ 550,000 100.0% 45.0% 285,000 51.8% 55.0% 265,000 48.2% Sales 170,000 Less: Variable expenses $ 95,000 Contribution Margin Less: Fixed Expenses 100% Operating income (loss) Part 15 Income Statement at the Breakeven Point Bicycles Carts Total Part 15 Income Statement Sales Less: Variable expenses Contribution Margin Less: Fixed Expenses Operating income (loss) Sales Units For the month of June Bicycles Carts Total Per Unit Per Unit $ 250,000 $ 500 $ 300,000 $ 200 $ 550,000 150,000 300 135,000 90 285,000 $ 100,000 $ 200 $ 165,000 $ 110 265,000 170,000 $ 95,000 500 1,500 2,000 CM per unit Sales Mix % Weighted CM for units Per Unit Weighted CM per unit Bicycles Carts Breakeven in Total Units Distribution of total units at Breakeven: Bicycles Carts NO "ROUNDUP" function required with multi products K81: NO "ROUNDUP" function required with multi products Exercise 4-3 In March, Mitchell Limited had sales of $250,000 (50,000 units), total variable expenses of $190,000, and total fixed expenses of $36,000. Units Sold Sales Variable expenses Fixed Expenses 50,000 $ $ $ 250,000 190,000 36,000 Required: 1. What is the company's CM ratio? Sales Variable expenses Contribution Margin Fixed Expenses Operating Income 2. Estimate the change in the company's operating income if it increased its total sales by $20,000. Increase in total sales $ 20,000 Increase in Sales x CM ratio Increase in CM and Operating Income Exercise 4-4 Data for Moorefield Corporation are shown below: Selling price $ 90 100% Variable expenses 63 70% Contribution Margin $ 27 30% Fixed expenses are $65,000 per month, and the company is selling 2,750 units per month. Fixed Expenses monthly $ 65,000 Units per month 2,750 Required: 1. The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $12,000. Should the advertising budget be increased? Increase in monthly advertising $ 5,000 Increase in monthly sales $ 12,000 Incremental Contribution Margin Incremental Fixed Expenses Increase (decrease) in Operating Income Should the advertising budget be increased? 2. Refer to the original data. Management is considering using higher-quality components that would increase the variable cost by $4 per unit. The marketing manager believes the higher-quality product would increase sales by 20% per month. Should the higher-quality components be used? Increase in variable cost per unit Increase in total sales $ 4 20% C19: choose the correct answer from the drop down list provided Exercise 4-12 Kelly Company's most recent contribution format income statement is shown below: Sales units 60,000 Per Unit Sales $ 600,000 $ 10.00 100% Variable expenses 360,000 6.00 60% Contribution Margin 240,000 $ 4.00 40% Fixed Expenses 100,000 Operating Income $ 140,000 Required: (a) Prepare a new contribution format income statement (below) under each of the following conditions 1. to 4. (consider each case independently): (b) Using the "incremental approach" determine the Increase (decrease) in Operating Income under each of the following conditions 1. to 4. (consider each case independently) 1. The number of units sold increases by 30%. Increase in units sold 30% 2. The selling price decreases by $1 per unit, and the number of units sold increases by 20%. Selling price decrease $ 1.00 Number of units sold increase 20% 3. The selling price increases by $1 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 10%. Selling price increase $ 1.00 Number of units sold decrease 10% Fixed Expenses increase $ 20,000 4. Variable expenses increase by 60 cents per unit, the selling price increases by 15%, and the number of units sold decreases by 15%. Selling price increase 15% Number of units sold decrease 15% Variable expense per unit increase $ 0.60 (a) Kelly Company Contribution Format Income Statements Part 1 Part 2 Per Unit Per Unit Sales Variable expenses Contribution Margin Fixed Expenses Operating Income (b) INCREMENTAL Approach Expected Total Contribution Margin Present Total Contribution Margin Increase (decrease) in Total Contribution Margin Incremental Fixed Expenses Increase (decrease) in Operating Income Part 3 Part 4 Per Unit Per Unit Case #1 Total 9,000 Number of units sold Sales Variable expenses Contribution margin Fixed expenses Operating income (loss) $ 270,000 162,000 Case #2 Per unit Total Case #3 Per unit Total Case #4 Total 5,000 Per unit 20,000 $ 350,000 $ 160,000 $ 82,000 (12,000) Per unit 280,000 $ 90,000 $ 15 170,000 40,000 b. Assume that more than one product is being sold in each of the following four case situations: Case #1 Case #2 % Sales $ 450,000 $ 200,000 Variable expenses 130,000 Contribution margin 40% Fixed expenses 60,000 Operating income $ 65,000 $ $ 6 85,000 35,000 Case #3 % Case #4 % % $ 300,000 90,000 $ (15,000) 80% $ 470,000 90,000 Intermediate Accounting 1 Assignment Chapters 3, 4 and 5 Date Name: Student Number: Name: Student Number: I hereby declare that the work I am submitting is my own work. I understand that plagiarism, whether done deliberately or accidentally, is defined as presenting someone else's work, in whole or in part, as my own, and includes the verbal or written submission of another work (for example, ideas, wording, code, graphics, music, and inventions) without crediting that source. This includes all electronic sources (for example, the internet, television, video, film, and recordings), all print and written sources (for example, books, periodicals, lyrics, government publications, promotional materials, and academic assignments), and all verbal sources (for example conversations and interviews). I understand that the facilitation of plagiarism, that is, one student sharing his or her work with other students, is also considered an act of plagiarism. I understand that contravening Algonquin College Directive AA20 - Plagiarism will result in an academic sanction(s) as described in this directive. No part of this assignment was copied from another student. Signature: Date: Signature: Date: RUBRIC FOR ASSIGNMENT Part a) 1. Adjusting entries: Marks Marks Available Achieved /30 Adjusting entries must be accurately prepared using proper acccount titles Amounts must be cell-referenced to the data where possible Part b) Part d) Adjusted trial balance The columns are property filled in and totalled Amounts are cell-referenced to data and adjusting entries Financial Statements: Income Statement Statement of Retained Earnings Balance Sheet /12 /35 Account titles and amounts MUST be cell-referenced from the Adjusted Trial Balance Formulas must be used where calculations are required Part e) Revised Income Statement /15 Amounts must be cell-referenced from Data page Formulas must be used where calculations are required Part e) Ratio analysis and ethical issue Calculation of ratio Discussion of ethical issue Amounts must be cell-referenced from financial statements Overall presentation Adjusting entries show calculations in clear, legible format Spelling, consistent number formatting Cover page, attestation from both students good printout format, stapled, etc. Total Grade /13 /15 100 Erskine Consulting Ltd. December 31, 2017 Unadjusted Trial Balance Debit Credit COPY / PASTE THE UNAD QUESTION ON THIS PAGE NUMBERS TO THE OTHER INCLUDE ANY OTHER AM WILL NEED TO PREPARE STATEMENTS. Y / PASTE THE UNADJUSTED TRIAL BALANCE FROM THE STION ON THIS PAGE. USE CELL REFERENCING FROM THESE BERS TO THE OTHER PAGES OF THIS TEMPLATE. UDE ANY OTHER AMOUNTS FROM THE QUESTION THAT YOU NEED TO PREPARE YOUR JOURNAL ENTRIES AND FINANCIAL EMENTS. Erskine Consult December 31, Unadjusted Trial Balance Debit Credit Petty Cash Cash Accounts Receivable $0 $0 FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: Adjusted Trial Balance, Page 5 of 11, 11/03/2016, 10:55:33 GENERAL JOURNAL Item # Account Titles Debit Credit SHOW CA AFTER TH FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: General Journal, Page 6 of 11, 11/03/2016, 10:55:33 FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: General Journal, Page 7 of 11, 11/03/2016, 10:55:33 SHOW CALCULATIONS FOR YOUR ADJUSTING ENTRIES AFTER THE ENTRY. FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: General Journal, Page 8 of 11, 11/03/2016, 10:55:33 FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: General Journal, Page 9 of 11, 11/03/2016, 10:55:33 FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: Financial Statements, Page 10 of 11, 11/03/2016, 10:55:33 FileName: qattachments_eb33cf3ac12becc744cdc28c1a9ae2c347054ec8.xlsx, Tab: Financial Statements (2), Page 11 of 11, 11/03/2016, 10:55:33