The following information pertains to Baron Flowers, a corporation at 400 The Fenway, Boston, which maintains its books on the cash basis during the year Each year, Barons CPA, converts the books to the accrual basis in order to prepare Barons tax return No adjustments are made to the accounts during the fiscal year You have been hired this year as the companys CPA to do this work The results of any adjustments made in the prior year on 12 31 17 are reflected in the following unadjusted 12 31 18 trial balance All other accounts are on the cash basis and at current year balance Baron Flowers, Inc Unadjusted Trial Balance 31 Dec 18 Unadjusted Debit Credit Cash $245,650 Accounts receivable 12 31 17 116,200 Allowance for doubtful accounts 12 31 17 $17,800 Inventory 12 31 17 62,000 Furniture and fixtures 118,200 Accumulated depreciation 12 31 17 32,400 Accounts payable 12 31 17 17,000 Interest payable 12 31 17 2,250 Notes payable 50,000 Common stock, $10 par value 20,000 Additional paid in capital 30,000 Retained earnings 119,600 Sales revenue 1,008,000 Purchases 405,100 Land improvement expense 50,000 Salaries expense 174,000 Payroll taxes 12,400 Income tax expense 45,000 Insurance expense 8,700 Rent expense 34,200 Utilities expense 12,600 Travel and entertainment expense 13,000 TOTAL $1,297,050 $1,297,050 Baron has developed plans to expand into the wholesale flower market and is in the process of negotiating a bank loan to finance the expansion The bank is requesting 2018 financial statements prepared on the accrual basis of accounting from Baron During the course of a review engagement, you, the CPA hired as Barons accountant, obtained the following additional information Amounts due from customers totaled $142,000 at 12 31 18 An analysis of the above receivables revealed that $22,000 is estimated to be uncollectible in 2018 Unpaid invoices for flower purchases totaled $20,500 and $17,000 at December 31, 2018 and December 31, 2017, respectively The inventory totaled $94,000 based on a physical count of the goods at December 31, 2018 The inventory was priced at cost, which approximates market value On May 1, 2018 Baron paid $8,700 to renew its annual comprehensive insurance coverage for one year The entire amount was recorded to insurance expense Baron rents retail space that includes an adjacent parking lot The parking lot is in rough shape and Baron agrees to pave and fence the lot at a cost of $50,000 The improvements were completed on April 2, 2018, and have an estimated useful life of 15 years Depreciation on furniture and fixtures was $12,000 for 2018 Accrued expenses at December 31, 2018 and 2017 were as follows 2018 2017 Utilities $1,500 $900 Payroll taxes 1,400 1,600 Totals $2,900 $2,500 Due to an oversight, the CPA hired last year did not accrue the expenses at the end of 2017 and failed to record them on the income tax return for 2017 Baron is being sued for $100,000 The coverage under the comprehensive insurance policy is limited to $50,000 Barons attorney believes that an unfavorable outcome is probable and that a reasonable settlement is $75,000 On December 29, 2018, Baron advanced $5,000 to a salesperson for a company sales trip to New York City during the first week of January It was recorded to the Travel and Entertainment expense account All employees are paid weekly on Saturday The average payroll is $3,600 for a 6 day work week Monday through Saturday Employees were paid last Saturday, December 29, 2018 for the week ended December 22, 2018 Baron Flowers has a policy of giving all employees paid holidays for Christmas day and the following day Barons has made estimated income tax payments of $15,000 per quarter for the first three quarters of 2018 Barons estimated tax rate is 30 Baron was issued a $50,000 year note payable on April 1, 2017 The note bears interest at 6 Principle and interest are due at maturity on 04 01 20 Included in cash is $25,000 that has been set aside in an escrow account for future plant expansion There was no change in stock in 2018 1) Design your own Excel workbook that includes 5 separate worksheets tabs labeled 10 Column, ADJE Calculations, IS, SE, BS You may not use a predesigned template 2) Prepare a 10 Column Worksheet (tab 1) in your Excel workbook to convert the trial balance of Baron Flowers to the accrual basis of accounting for the year ended December 31, 2018 Appendix 3C in your text will be a helpful guide The cash basis unadjusted trial balance provided to you should appear in the first column(s) of your 10 adjusting entries should be referenced 3) Prepare an ADJE Calculations worksheet (tab 2) that neatly shows all your adjusting entry calculations with a proper explanation for each entry in order to receive partial credit All calculations should be properly labeled No credit will be provided if your calculations are not labeled 4) Prepare a multi step income statement (including EPS) (tab 3), statement of equity (tab 4), and a classified balance sheet (tab 5) for 2018 to be presented to the bank A cash flow statement is not required 5) Write a professionally formatted letter to Baron explaining why the bank would require the financial statements prepared on an accrual basis rather than a cash basis of accounting 3Column Worksheet Utilize the additional information presented to prepare the adjustments All of your adjusting entry calculations with a proper explanation for each entry in order to receive partial credit All calculations should be properly labeled No credit will be provided if your calculations are not labeled 4) Prepare a multi step income statement (including EPS) (tab 3), statement of equity (tab 4), and a classified balance sheet (tab 5) for 2018 to be presented to the bank A cash flow statement is not required 5) Write a professionally formatted letter to Baron explaining why the bank would require the financial statements prepared on an accrual basis rather than a cash basis of accounting This is all the 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The following information pertains to Baron Flowers, a corporation at 400 The Fenway, Boston, which maintains its books on the cash basis during the year.

The following information pertains to Baron Flowers, a corporation at 400 The Fenway, Boston, which maintains its books on the cash basis during the year. Each year, Barons CPA, converts the books to the accrual basis in order to prepare Barons tax return. No adjustments are made to the accounts during the fiscal year. You have been hired this year as the companys CPA to do this work. The results of any adjustments made in the prior year on 12.31.17 are reflected in the following unadjusted 12.31.18 trial balance. All other accounts are on the cash basis and at current year balance.

Baron Flowers, Inc.

Unadjusted Trial Balance

31-Dec-18



	Unadjusted
	Debit	Credit

Cash	$245,650

Accounts receivable - 12.31.17	116,200

Allowance for doubtful accounts - 12.31.17		$17,800

Inventory - 12.31.17	62,000

Furniture and fixtures	118,200

Accumulated depreciation - 12.31.17		32,400

Accounts payable - 12.31.17		17,000

Interest payable -12.31.17		2,250

Notes payable		50,000

Common stock, $10 par value		20,000

Additional paid-in capital		30,000

Retained earnings		119,600

Sales revenue		1,008,000

Purchases	405,100

Land improvement expense	50,000

Salaries expense	174,000

Payroll taxes	12,400

Income tax expense	45,000

Insurance expense	8,700

Rent expense	34,200

Utilities expense	12,600

Travel and entertainment expense	13,000

TOTAL	$1,297,050	$1,297,050

Baron has developed plans to expand into the wholesale flower market and is in the process of negotiating a bank loan to finance the expansion. The bank is requesting 2018 financial statements prepared on the accrual basis of accounting from Baron. During the course of a review engagement, you, the CPA hired as Barons accountant, obtained the following additional information:

Amounts due from customers totaled $142,000 at 12.31.18.
An analysis of the above receivables revealed that $22,000 is estimated to be uncollectible in 2018.
Unpaid invoices for flower purchases totaled $20,500 and $17,000 at December 31, 2018 and December 31,

2017, respectively.
The inventory totaled $94,000 based on a physical count of the goods at December 31, 2018. The inventory was

priced at cost, which approximates market value.
On May 1, 2018 Baron paid $8,700 to renew its annual comprehensive insurance coverage for one year. The

entire amount was recorded to insurance expense.
Baron rents retail space that includes an adjacent parking lot. The parking lot is in rough shape and Baron agrees

to pave and fence the lot at a cost of $50,000. The improvements were completed on April 2, 2018, and have an

estimated useful life of 15 years. Depreciation on furniture and fixtures was $12,000 for 2018.
Accrued expenses at December 31, 2018 and 2017 were as follows:

2018

2017

Utilities

$1,500

$900

Payroll taxes

1,400

1,600

Totals

$2,900

$2,500
Due to an oversight, the CPA hired last year did not accrue the expenses at the end of 2017 and failed to record

them on the income tax return for 2017.
Baron is being sued for $100,000. The coverage under the comprehensive insurance policy is limited to $50,000.

Barons attorney believes that an unfavorable outcome is probable and that a reasonable settlement is $75,000.
On December 29, 2018, Baron advanced $5,000 to a salesperson for a company sales trip to New York City

during the first week of January. It was recorded to the Travel and Entertainment expense account.
All employees are paid weekly on Saturday. The average payroll is $3,600 for a 6 day work week Monday

through Saturday. Employees were paid last Saturday, December 29, 2018 for the week ended December 22,

2018. Baron Flowers has a policy of giving all employees paid holidays for Christmas day and the following day.
Barons has made estimated income tax payments of $15,000 per quarter for the first three quarters of 2018.

Barons estimated tax rate is 30%.
Baron was issued a $50,000 year note payable on April 1, 2017. The note bears interest at 6%. Principle and

interest are due at maturity on 04.01.20.
Included in cash is $25,000 that has been set aside in an escrow account for future plant expansion.
There was no change in stock in 2018.
1) Design your own Excel workbook that includes 5 separate worksheets/tabs labeled: 10-Column, ADJE Calculations, IS, SE, BS. You may not use a predesigned template.
2) Prepare a 10-Column Worksheet (tab 1) in your Excel workbook to convert the trial balance of Baron Flowers to the accrual basis of accounting for the year-ended December 31, 2018. Appendix 3C in your text will be a helpful guide. The cash basis unadjusted trial balance provided to you should appear in the first column(s) of your 10-
adjusting entries should be referenced.
3) Prepare an ADJE Calculations worksheet (tab 2) that neatly shows all your adjusting entry calculations with a

proper explanation for each entry in order to receive partial credit. All calculations should be properly labeled.

No credit will be provided if your calculations are not labeled.
4) Prepare a multi-step income statement (including EPS) (tab 3), statement of equity (tab 4), and a classified

balance sheet (tab 5) for 2018 to be presented to the bank. A cash flow statement is not required.
5) Write a professionally formatted letter to Baron explaining why the bank would require the financial statements

prepared on an accrual basis rather than a cash basis of accounting
3Column Worksheet. Utilize the additional information presented to prepare the adjustments. All of your
adjusting entry calculations with a

proper explanation for each entry in order to receive partial credit. All calculations should be properly labeled.

No credit will be provided if your calculations are not labeled.
4) Prepare a multi-step income statement (including EPS) (tab 3), statement of equity (tab 4), and a classified

balance sheet (tab 5) for 2018 to be presented to the bank. A cash flow statement is not required.
5) Write a professionally formatted letter to Baron explaining why the bank would require the financial statements
prepared on an accrual basis rather than a cash basis of accounting.
This is all the information my teacher gave me