THE BUSINESS PART ONE INSTRUCTIONS States and Texas Tas Pete's Patriotene, primary operation is the sofa And Set of how will be This is designed in two parts. The first part provides a review of the catacorontonite required in the second part Pete's Patriotic Inc. will and to indude the process of the flags All cases of academic dishonesty will be reported to the Office of Studente The findintomation for the past two years (2021 2030 powded. Upon such as Microce, and the Prepare a statement of Cash Flows for the current year using the indirect thodhongtemplate 2 Using horizontalis prepare a Comparative Balance Sheet.Copy the financials on Blackboard into an cepat 3. Using vertical analysis, prepare a comparative Income Statement Copy the son Sackboard wton El spreadsheet and it column to add the percent Using the financial statements in the practice set located on blackboard at the bos below. Use the following templates formation from the previous vide the following and insert a column to add the percentages shown here in the practice set a Working Capital both years 6. Current Ratio both years Quick ratio both years d. Accounts Receivable Turnover 2021 Number of Dar Sales in Recolab 2001 Company policy states in recevable Inventory Turnovet 2021 hi Ratio of Liabilities to Stockholders Equity 2021 Number of Days Sales in immentary 2021 Company policy states i cave te tumore anventory Return on Total Assets 2021 1 Return on Stockholders' Equity 2021 Earnings Per Share 2020 and 2021 41 ACCOUNTING SOCIETY The financial statements provided in this practice set can also be downloaded from Blackboard Download the fulles income Statement and Balance Sheet) from Blackboard and add a column and calculate the ratios for the verticalhoty Acting as an accounting advisor to the firm, prepare a meno in which you say the Financial statements you are in step two and prepare an analysis of the company's financial position Identity two strength and he wasses in the company. Make two recommendations to improve the company's financial position. Besic in each of the recommendations and use any of the is calculated in a-k and the vertical and horontal analysis to support you in and analyses. If you do not use the nation your answer you will not credit for the memo. The length should be no more than the paragraphs one for strength, one for weaknesses, and one for recommendations 6. Blackboard Instructions Memo analyzing the company's strengths and weaknesses with two recommendations. Write your memo in Word document using ratios to analyze the strengths and weakness of the company han spelineatical or punctuation errors. Once it is completed make sure that you see it out and the writeit in Badboard Add information concerning numbers using the format as shown here below and into Blackboard as specified When the answer is in units enter the numbers is see cumple below When the answer is for ratios e Current and has a decimaltake out two mal spaces e ample below) 280.89 d When ratios are in days/times take out to tio decimal place and we are atter the number 5e compiu below) L280.96 days of times When the answer is in dollars ALWAYS include a dollarsin, con the door amount and contas shown below $280.83 or 53,800.44 or $480.00 or 53.600.00 Plesne foliow all instructions of the answers are formatted incorrectly the awer will be counted wrong 280 Templates for Part 1 follow: Statement of Cash Flow Template you answer all questions on Blackboard upload the Statement of Cash Flows, prepared in Excel, to Blackboard. Please prepare a Statement of Cash Flow as shown below using Excel. Input answers in the last column. After Answers Pete's Patriotic Flags, Inc. Statement of Cash Flow For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to net cash flow from Operating activities Depreciation Amortization Gain or Loss Changes in current operating assets and liabilities Net Cash Flow from Operating Activities Cash Flows from Investing Activities Cash received from sale Less cash used for purchases Net Cash Flow from Investing Activities 611 A Cash Flow from Financing Activities Cash received from issuance of stock Less cash paid dividends or long-term debt Net Cash Flow from Financing Activities Increase or decrease in cash Cash at the beginning of the year Cash at the end of the year Oct Peter's Progratis Sektion Woche 2001 9.700 30.500 13700 7200 2020 2001 2000 Gucati 2001 2030 2011 2033 ACCOUNT Humber of Days Preventory Number of Days Sales toetust 2021 2003 2003 Rumon Total Assets 2020 2021 ROSE 2021 as per the 2021 2020 IPE CCOUNTING Sector MEMO TEMPLATE Part 1 Part 1 Pete's Patriotic Flags Mrs. Houghton [Your Name Date [Subject Wote the memo using as many ratios as possible to support your answer. Forcamole I would look at the vertical analysis and horizontal analysis for cash and then use that information to determine what was happening to the current ratio, working capital and quick ratio, song with counts receivable turnover number of days in receivables, inventory turnover along with the number of days in inventory to determine if this was a strength or weakness. After looking at these ratios, look at the solvency and profitability ratios and use them to explain what is happening in the company. By Incorporating as many ratios as possible you support your reasoning as whether this weakness or a strength. This also tell me if you understand what the ratios are telling you. The memo only needs to be two or three paragraphs COMPRATIVE BALANCE SHEET Pete's Patriotic Flags, Inc Comparative Balance Sheet December 31, 2021and 2020 Assets 2021 2020 Current Assets Cash Accounts Receivable, net Merchandise Prepaid Rent 366.520 150.000 130.000 90.000 170,000 70.000 Total Current Assets $725 520 S180.000 Property. Plant and Equipment Equipment Less Accumulated Depreciation Equipment Total Property, plant, and Equipment Total Assets 260.000 240.000 0.00) $180,000 $906.520 $220,000 $600.000 10 Pat ACCOUNTING SOCIETY 2021 2020 90.000 55.000 Liabilities and Stockholders' Equity Current abilities Accounts Payable Dividends Payable Unearned Revenue Salaries payable Federal income Taxes Payable Total Current Liabilities 20,000 70.000 30,000 $210,000 80.000 50.000 15.000 5200,000 Long Term Liabilities Bond Payable Note Payable Total abilities 100.000 20,000 60.000 $290.000 $300,000 Stockholders' Equity Common Stock, 510 Par Pald-In Capital in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 150.000 15,000 45.520 $616,520 5906,520 100.000 10.000 15239 $300.000 $500.000 COMPARATIVE INCOME STATEMENT Pete's Patriotic Flags, Inc. Comparative statement of income For the Year Ended December 31, 2021 and 2020 2020 2021 1,600,000 1,040.000 $560.000 940,000 693.000 $247,000 Sales Cost of Goods Sold Gross Margin Operating Expenses Salaries and Wages Expense Rent Expense Depreciation Expense Total Operating Expenses Income from Operations Loss on Sale of Equipment Interest Expense Increase (Decrease in Operating Income Income before Taxes Federal Income Taxes Net Income 50,000 20,000 28.000 $94,000 $153,000 80,000 20,000 30.000 $130,000 $430,000 1500) 18.000 18.500 421,500 1264 $295,050 13,000 8.000 150,000 (45,000) $105,000 12 PRE CCOUNTING $ OCTETY 2020 110,000 95.000 COMPARATIVE STATEMENT OF STOCKHOLDERS' EQUITY Pete's Patriotic Flags, Inc. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2021 and 2020 2021 Common Stock 165,000 Retained Earnings, Beginning 190,000 of Year Net Income 295,050 Less: Dividends 2 Retained Earnings, End of Year $451,520 Total Stockholders' Equity $616,520 1. Equipment with a cost of $20,000 was sold for $9,500 cash. 2. Stock was issued for cash. 3. The dividends were paid in cash. 4. The tax rate is 30%. 105.000 10.000 $190,000 $300,000 4 PART TWO INSTRUCTIONS MANUFACTURING PROCESS INFORMATION Pete Paydirt, the CEO of Pete's Patriotic Flags, Inc. has begun a small manufacturing process that will manufacture United States and Texas Flags and then sell the flags to merchandising companies. The manufacturing process starts with the cutting and edging of the fabric. Once the fabric is cut, inspected, and approved then it is attached to the flagpole. The flagpole will be attached as the final step in the process. Once the flags are completed, they are then transferred to finished goods. This is a process cost system, and the company elects to use the FIFO method of accounting for product costs. Direct material-fabric is added 100% at the beginning of the process. Direct material-poles are added 100% as the last step in the manufacturing process. Conversion costs are added equally throughout the process. Conversion is 40% complete for the beginning inventory work in process and 60% complete for the ending inventory work in process. At the beginning of the accounting period, Pete estimates that production will be 160,000 units during the year. The predetermined overhead rate is based on an estimated FOH of $6,552. Overhead is applied to production on the basis of direct labor hours. This information is to be used to determine the application rate for overhead, Estimated and actual direct labor costs totaled $9,360 which is calculated at $10.00 per hour. Actual factory overhead costs totaled $1,050,000 Beginning Work-In-Process costs totaled $0 since this is the first month of production The following information is available concerning direct materials. Direct Materials-Fabric Beginning inventory O yards @ $11.00 per yard Purchase of fabric 340,000 yards - @$11.00 per yard The company starts 160,000 units 2 square yards of fabric makes one flag Direct Material Poles Beginning inventory O poles Purchase of poles 160,000 poles @ $50.00 per pole The Work-in-Process account has the following information: Ending work in process inventory is 100% complete as to fabric Ending work in process contains 10,000 equivalent units Ending work in process is 60% complete to conversion costs The Finished Goods account has the following Information: The finished goods inventory on January 1, 2021, had a balance of O flags at a cost of $0 and on December 31, 2021 had an ending balance of 250 flags. The selling price of the flags is $110.00. Selling and Administrative Costs totaled $500,000; tax rate is 30%. CCOUNTING Using a spreadsheet and based on the information provided in the next section, complete the following requirements: 1. Determine the predetermined overhead rate. 2. Determine the total number of flags to account for. 3. Prepare an equivalent unit's schedule. The schedule should follow the format below; you may add additional information if you would like. Whole Units Equivalent Units (Actual) Direct Materials Direct Material Conversion Fabric Poles Costs Beginning XXX Start/Completed XXX Completed/Transferred Out XXX XXX Ending XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Total 4. Determine the total cost for the fabric and the unit amount for the fabric for one flag. 5. Determine the total cost for the poles and the unit cost for one pole. 6. Determine the total conversion cost and the conversion cost per flag. 7. Determine the total equivalent cost per flag. 8. Prepare a Cost of Production report. This report should show all costs transferred into Work-in-Process and the costs transferred to Finished Goods. This process uses FIFO costing. 9. Determine the amounts for the following: a) Ending Work-in-Process Inventory in Units AND Dollars b) Ending Finished Goods Inventory in Units AND Dollars c) Cost of Goods Sold d) Over/Under Applied Manufacturing Overhead e) Gross Margin f) Income from Operations 8) Net Income 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Prepare journal entries for the accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries. Chart of Accounts Cash 10000 11000 Accounts Receivable DM Fabric 12000 DM Poles 12100 15000 Work-In-Process WIP 15050 Factory Overhead 16000 Finished Goods FG 20000 Wages Payable 40000 Sales 50000 COGS a. In the first journal entry record the purchase of the fabric and the poles using cash. b. Record the materials transferred to WIP. Again, use one journal entry to record the transfer of the fabric and the poles c. Record the direct labor into WIP using wages payable. d. Record the applied FOH. e. Record the actual FOH using cash. f. Record the over or under applied FOH. & Record the sale of the goods on account along with the cost of the inventory that was sold. Combine both into one journal entry showing the sale first and inventory second. Blackboard Instructions for Part Two Add information concerning numbers here and enter into Blackboard as specified below a. When the answer is in units enter the number as is (See example below) il. 280 b. When the answer is for ratios (i.e., %) and it has a decimal take the decimal out to two spaces (See example below) ii. 280.89 C. When ratios are in days/times take out to two decimal places (See example below) iv. 280.96 days d. When the answer is in dollars ALWAYS include a dollar sign and cents even if the cents is zero, add.00 (See example below) v. $280.00 or $3,800.00 e. When there is a single journal entry enter information EXACTLY as is below in the sequence of Dr/Cr, Account Number, and Amount (note the signs, decimals, spaces, and capital letter) vi. Dr 10000 $280.00 Cr 20000 $280.00 f. When there is a journal entry requiring two debits or credits enter information EXACTLY as is below in the sequence of Dr/Cr, Account Number, Amount, and always put the smaller account number FIRST (note the signs, decimals, spaces, capital letters and order of the accounts) vii. Dr 10000 $280.00 Dr 60000 $40.00 Cr 20000 $300.00 viii. Dr 10000 $300.00 Cr 20000 $280.00 Cr 90000 $40.00 ix. Dr 10000 $280.00 Dr 60000 $40.00 Cr 70000 $290.00 Cr 90000 $10.00 & When there is a sale enter the sale first and then add the COGS and the transfer of Inventory 1. Dr 10000 $10,368.00 Cr 40000 $10,000.00 Cr 26833 $368.00 Dr 50000 $70,000.00 Cr 12000 $50,000.00 Cr 12100 $20,000.00 h. Follow examples exactly as arel Do NOT copy and paste from Excel into Blackboard. If your entry is formatted incorrectly, it will be counted wrong. Templates Equivalent Units Schedule 1. Determine the pre-determined overhead rate. 3. Equivalent unit schedule Equivalent Units Whole Units (Actual) Beginning Start/Completed Completed/Transferred Out Ending XXX XXX XXX XXX Direct Materials Fabric XXX XXX XXX XXX Direct Material Poles XXX XXX XXX XXX Conversion Costs XXX XXX XXX XXX 4. Determine the total cost for the fabric and the unit amount for the fabric for one flag. 5. Determine the total cost for the poles and the unit cost for each pole. 6. Determine the total conversion cost and the conversion cost per flag. 7. Determine the total equivalent cost per flag. 8. Follows after this 9. Determine the amounts for the following. h) Ending Work-in-Process Inventory in Units AND Dollars i) Ending Finished Goods Inventory in Units AND Dollars j) Cost of Goods Sold k) Over/Under Applied Manufacturing Overhead 1) Gross Margin m) Income from Operations n) Net Income TEMPLATE FOR COST OF PRODUCTION REPORT Pete's Patriotic Flags, Inc. Cost of Production Report For the year ended December 31, 2021 Total Poles Conversion Costs xxx XXX XXX XXX Fabric Beginning Balance Units XXX Total Beginning Costs Transferred-in XXX XXX XXX XXX Started and completed XXX Costs Transferred to Finished Goods XXX XXX XXX Ending Costs in Work-In-Process XXX XXX Total Costs Costs to Account For Beginning Work-In-Process Direct Materials Direct Labor Applied Factory Overhead Total Costs Prepare the cost of Production Report by turning the equivalent units schedule into dollars. This should be prepared in Excel and will be uploaded through Blackboard. Template for Journal Entries Dr Account Number Dollar Amount Cr Account Number Dollar Amount . a. b. C. d. e. . 8 THE BUSINESS PART ONE INSTRUCTIONS States and Texas Tas Pete's Patriotene, primary operation is the sofa And Set of how will be This is designed in two parts. The first part provides a review of the catacorontonite required in the second part Pete's Patriotic Inc. will and to indude the process of the flags All cases of academic dishonesty will be reported to the Office of Studente The findintomation for the past two years (2021 2030 powded. Upon such as Microce, and the Prepare a statement of Cash Flows for the current year using the indirect thodhongtemplate 2 Using horizontalis prepare a Comparative Balance Sheet.Copy the financials on Blackboard into an cepat 3. Using vertical analysis, prepare a comparative Income Statement Copy the son Sackboard wton El spreadsheet and it column to add the percent Using the financial statements in the practice set located on blackboard at the bos below. Use the following templates formation from the previous vide the following and insert a column to add the percentages shown here in the practice set a Working Capital both years 6. Current Ratio both years Quick ratio both years d. Accounts Receivable Turnover 2021 Number of Dar Sales in Recolab 2001 Company policy states in recevable Inventory Turnovet 2021 hi Ratio of Liabilities to Stockholders Equity 2021 Number of Days Sales in immentary 2021 Company policy states i cave te tumore anventory Return on Total Assets 2021 1 Return on Stockholders' Equity 2021 Earnings Per Share 2020 and 2021 41 ACCOUNTING SOCIETY The financial statements provided in this practice set can also be downloaded from Blackboard Download the fulles income Statement and Balance Sheet) from Blackboard and add a column and calculate the ratios for the verticalhoty Acting as an accounting advisor to the firm, prepare a meno in which you say the Financial statements you are in step two and prepare an analysis of the company's financial position Identity two strength and he wasses in the company. Make two recommendations to improve the company's financial position. Besic in each of the recommendations and use any of the is calculated in a-k and the vertical and horontal analysis to support you in and analyses. If you do not use the nation your answer you will not credit for the memo. The length should be no more than the paragraphs one for strength, one for weaknesses, and one for recommendations 6. Blackboard Instructions Memo analyzing the company's strengths and weaknesses with two recommendations. Write your memo in Word document using ratios to analyze the strengths and weakness of the company han spelineatical or punctuation errors. Once it is completed make sure that you see it out and the writeit in Badboard Add information concerning numbers using the format as shown here below and into Blackboard as specified When the answer is in units enter the numbers is see cumple below When the answer is for ratios e Current and has a decimaltake out two mal spaces e ample below) 280.89 d When ratios are in days/times take out to tio decimal place and we are atter the number 5e compiu below) L280.96 days of times When the answer is in dollars ALWAYS include a dollarsin, con the door amount and contas shown below $280.83 or 53,800.44 or $480.00 or 53.600.00 Plesne foliow all instructions of the answers are formatted incorrectly the awer will be counted wrong 280 Templates for Part 1 follow: Statement of Cash Flow Template you answer all questions on Blackboard upload the Statement of Cash Flows, prepared in Excel, to Blackboard. Please prepare a Statement of Cash Flow as shown below using Excel. Input answers in the last column. After Answers Pete's Patriotic Flags, Inc. Statement of Cash Flow For the Year Ended December 31, 2021 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to net cash flow from Operating activities Depreciation Amortization Gain or Loss Changes in current operating assets and liabilities Net Cash Flow from Operating Activities Cash Flows from Investing Activities Cash received from sale Less cash used for purchases Net Cash Flow from Investing Activities 611 A Cash Flow from Financing Activities Cash received from issuance of stock Less cash paid dividends or long-term debt Net Cash Flow from Financing Activities Increase or decrease in cash Cash at the beginning of the year Cash at the end of the year Oct Peter's Progratis Sektion Woche 2001 9.700 30.500 13700 7200 2020 2001 2000 Gucati 2001 2030 2011 2033 ACCOUNT Humber of Days Preventory Number of Days Sales toetust 2021 2003 2003 Rumon Total Assets 2020 2021 ROSE 2021 as per the 2021 2020 IPE CCOUNTING Sector MEMO TEMPLATE Part 1 Part 1 Pete's Patriotic Flags Mrs. Houghton [Your Name Date [Subject Wote the memo using as many ratios as possible to support your answer. Forcamole I would look at the vertical analysis and horizontal analysis for cash and then use that information to determine what was happening to the current ratio, working capital and quick ratio, song with counts receivable turnover number of days in receivables, inventory turnover along with the number of days in inventory to determine if this was a strength or weakness. After looking at these ratios, look at the solvency and profitability ratios and use them to explain what is happening in the company. By Incorporating as many ratios as possible you support your reasoning as whether this weakness or a strength. This also tell me if you understand what the ratios are telling you. The memo only needs to be two or three paragraphs COMPRATIVE BALANCE SHEET Pete's Patriotic Flags, Inc Comparative Balance Sheet December 31, 2021and 2020 Assets 2021 2020 Current Assets Cash Accounts Receivable, net Merchandise Prepaid Rent 366.520 150.000 130.000 90.000 170,000 70.000 Total Current Assets $725 520 S180.000 Property. Plant and Equipment Equipment Less Accumulated Depreciation Equipment Total Property, plant, and Equipment Total Assets 260.000 240.000 0.00) $180,000 $906.520 $220,000 $600.000 10 Pat ACCOUNTING SOCIETY 2021 2020 90.000 55.000 Liabilities and Stockholders' Equity Current abilities Accounts Payable Dividends Payable Unearned Revenue Salaries payable Federal income Taxes Payable Total Current Liabilities 20,000 70.000 30,000 $210,000 80.000 50.000 15.000 5200,000 Long Term Liabilities Bond Payable Note Payable Total abilities 100.000 20,000 60.000 $290.000 $300,000 Stockholders' Equity Common Stock, 510 Par Pald-In Capital in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 150.000 15,000 45.520 $616,520 5906,520 100.000 10.000 15239 $300.000 $500.000 COMPARATIVE INCOME STATEMENT Pete's Patriotic Flags, Inc. Comparative statement of income For the Year Ended December 31, 2021 and 2020 2020 2021 1,600,000 1,040.000 $560.000 940,000 693.000 $247,000 Sales Cost of Goods Sold Gross Margin Operating Expenses Salaries and Wages Expense Rent Expense Depreciation Expense Total Operating Expenses Income from Operations Loss on Sale of Equipment Interest Expense Increase (Decrease in Operating Income Income before Taxes Federal Income Taxes Net Income 50,000 20,000 28.000 $94,000 $153,000 80,000 20,000 30.000 $130,000 $430,000 1500) 18.000 18.500 421,500 1264 $295,050 13,000 8.000 150,000 (45,000) $105,000 12 PRE CCOUNTING $ OCTETY 2020 110,000 95.000 COMPARATIVE STATEMENT OF STOCKHOLDERS' EQUITY Pete's Patriotic Flags, Inc. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2021 and 2020 2021 Common Stock 165,000 Retained Earnings, Beginning 190,000 of Year Net Income 295,050 Less: Dividends 2 Retained Earnings, End of Year $451,520 Total Stockholders' Equity $616,520 1. Equipment with a cost of $20,000 was sold for $9,500 cash. 2. Stock was issued for cash. 3. The dividends were paid in cash. 4. The tax rate is 30%. 105.000 10.000 $190,000 $300,000 4 PART TWO INSTRUCTIONS MANUFACTURING PROCESS INFORMATION Pete Paydirt, the CEO of Pete's Patriotic Flags, Inc. has begun a small manufacturing process that will manufacture United States and Texas Flags and then sell the flags to merchandising companies. The manufacturing process starts with the cutting and edging of the fabric. Once the fabric is cut, inspected, and approved then it is attached to the flagpole. The flagpole will be attached as the final step in the process. Once the flags are completed, they are then transferred to finished goods. This is a process cost system, and the company elects to use the FIFO method of accounting for product costs. Direct material-fabric is added 100% at the beginning of the process. Direct material-poles are added 100% as the last step in the manufacturing process. Conversion costs are added equally throughout the process. Conversion is 40% complete for the beginning inventory work in process and 60% complete for the ending inventory work in process. At the beginning of the accounting period, Pete estimates that production will be 160,000 units during the year. The predetermined overhead rate is based on an estimated FOH of $6,552. Overhead is applied to production on the basis of direct labor hours. This information is to be used to determine the application rate for overhead, Estimated and actual direct labor costs totaled $9,360 which is calculated at $10.00 per hour. Actual factory overhead costs totaled $1,050,000 Beginning Work-In-Process costs totaled $0 since this is the first month of production The following information is available concerning direct materials. Direct Materials-Fabric Beginning inventory O yards @ $11.00 per yard Purchase of fabric 340,000 yards - @$11.00 per yard The company starts 160,000 units 2 square yards of fabric makes one flag Direct Material Poles Beginning inventory O poles Purchase of poles 160,000 poles @ $50.00 per pole The Work-in-Process account has the following information: Ending work in process inventory is 100% complete as to fabric Ending work in process contains 10,000 equivalent units Ending work in process is 60% complete to conversion costs The Finished Goods account has the following Information: The finished goods inventory on January 1, 2021, had a balance of O flags at a cost of $0 and on December 31, 2021 had an ending balance of 250 flags. The selling price of the flags is $110.00. Selling and Administrative Costs totaled $500,000; tax rate is 30%. CCOUNTING Using a spreadsheet and based on the information provided in the next section, complete the following requirements: 1. Determine the predetermined overhead rate. 2. Determine the total number of flags to account for. 3. Prepare an equivalent unit's schedule. The schedule should follow the format below; you may add additional information if you would like. Whole Units Equivalent Units (Actual) Direct Materials Direct Material Conversion Fabric Poles Costs Beginning XXX Start/Completed XXX Completed/Transferred Out XXX XXX Ending XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX Total 4. Determine the total cost for the fabric and the unit amount for the fabric for one flag. 5. Determine the total cost for the poles and the unit cost for one pole. 6. Determine the total conversion cost and the conversion cost per flag. 7. Determine the total equivalent cost per flag. 8. Prepare a Cost of Production report. This report should show all costs transferred into Work-in-Process and the costs transferred to Finished Goods. This process uses FIFO costing. 9. Determine the amounts for the following: a) Ending Work-in-Process Inventory in Units AND Dollars b) Ending Finished Goods Inventory in Units AND Dollars c) Cost of Goods Sold d) Over/Under Applied Manufacturing Overhead e) Gross Margin f) Income from Operations 8) Net Income 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Prepare journal entries for the accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries. Chart of Accounts Cash 10000 11000 Accounts Receivable DM Fabric 12000 DM Poles 12100 15000 Work-In-Process WIP 15050 Factory Overhead 16000 Finished Goods FG 20000 Wages Payable 40000 Sales 50000 COGS a. In the first journal entry record the purchase of the fabric and the poles using cash. b. Record the materials transferred to WIP. Again, use one journal entry to record the transfer of the fabric and the poles c. Record the direct labor into WIP using wages payable. d. Record the applied FOH. e. Record the actual FOH using cash. f. Record the over or under applied FOH. & Record the sale of the goods on account along with the cost of the inventory that was sold. Combine both into one journal entry showing the sale first and inventory second. Blackboard Instructions for Part Two Add information concerning numbers here and enter into Blackboard as specified below a. When the answer is in units enter the number as is (See example below) il. 280 b. When the answer is for ratios (i.e., %) and it has a decimal take the decimal out to two spaces (See example below) ii. 280.89 C. When ratios are in days/times take out to two decimal places (See example below) iv. 280.96 days d. When the answer is in dollars ALWAYS include a dollar sign and cents even if the cents is zero, add.00 (See example below) v. $280.00 or $3,800.00 e. When there is a single journal entry enter information EXACTLY as is below in the sequence of Dr/Cr, Account Number, and Amount (note the signs, decimals, spaces, and capital letter) vi. Dr 10000 $280.00 Cr 20000 $280.00 f. When there is a journal entry requiring two debits or credits enter information EXACTLY as is below in the sequence of Dr/Cr, Account Number, Amount, and always put the smaller account number FIRST (note the signs, decimals, spaces, capital letters and order of the accounts) vii. Dr 10000 $280.00 Dr 60000 $40.00 Cr 20000 $300.00 viii. Dr 10000 $300.00 Cr 20000 $280.00 Cr 90000 $40.00 ix. Dr 10000 $280.00 Dr 60000 $40.00 Cr 70000 $290.00 Cr 90000 $10.00 & When there is a sale enter the sale first and then add the COGS and the transfer of Inventory 1. Dr 10000 $10,368.00 Cr 40000 $10,000.00 Cr 26833 $368.00 Dr 50000 $70,000.00 Cr 12000 $50,000.00 Cr 12100 $20,000.00 h. Follow examples exactly as arel Do NOT copy and paste from Excel into Blackboard. If your entry is formatted incorrectly, it will be counted wrong. Templates Equivalent Units Schedule 1. Determine the pre-determined overhead rate. 3. Equivalent unit schedule Equivalent Units Whole Units (Actual) Beginning Start/Completed Completed/Transferred Out Ending XXX XXX XXX XXX Direct Materials Fabric XXX XXX XXX XXX Direct Material Poles XXX XXX XXX XXX Conversion Costs XXX XXX XXX XXX 4. Determine the total cost for the fabric and the unit amount for the fabric for one flag. 5. Determine the total cost for the poles and the unit cost for each pole. 6. Determine the total conversion cost and the conversion cost per flag. 7. Determine the total equivalent cost per flag. 8. Follows after this 9. Determine the amounts for the following. h) Ending Work-in-Process Inventory in Units AND Dollars i) Ending Finished Goods Inventory in Units AND Dollars j) Cost of Goods Sold k) Over/Under Applied Manufacturing Overhead 1) Gross Margin m) Income from Operations n) Net Income TEMPLATE FOR COST OF PRODUCTION REPORT Pete's Patriotic Flags, Inc. Cost of Production Report For the year ended December 31, 2021 Total Poles Conversion Costs xxx XXX XXX XXX Fabric Beginning Balance Units XXX Total Beginning Costs Transferred-in XXX XXX XXX XXX Started and completed XXX Costs Transferred to Finished Goods XXX XXX XXX Ending Costs in Work-In-Process XXX XXX Total Costs Costs to Account For Beginning Work-In-Process Direct Materials Direct Labor Applied Factory Overhead Total Costs Prepare the cost of Production Report by turning the equivalent units schedule into dollars. This should be prepared in Excel and will be uploaded through Blackboard. Template for Journal Entries Dr Account Number Dollar Amount Cr Account Number Dollar Amount . a. b. C. d. e. . 8