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On January 1, 2021, the general ledger of Parts Unlimited Included the following account balances: Accounts Title Cash Accounts Receivable Inventory Land Equipment Accumulated depreciation Accounts Payable Connon stock Retained Earnings Totals Debit Credit $162,480 12,400 37,888 348, eee 347,500 $172,eee 14,800 520, eee 193,300 $900,100 $900, 180 From January 1 to December 31, the following summary transactions occurred: a. Purchased Inventory on account. $325.800. b. Sold Inventory on account, $567.200. The Inventory cost $342600. c. Received cash from customers on account, $558,700. d. Pald cash on account. $328.500. e. Pald cash for salaries. $94.700, and for utilities. $52,700. In addition, Parts Unlimited had the following transactions during the year: April 1 Purchased equipment for $95,830 using a note payable, due in 12 months plus ex interest. The company also paid cash of $3,200 for freight and $3,888 for installation and testing of the equipment. The equipent has an estimated residual value of $18,eee and a ten-year service life. June 30 Purchased a patent for $40,000 from a third-party marketing company related to the packaging of the company's products. The patent has a 20-year useful life, after which it is expected to have no value. October 1 Sold equipment for $30,289. The equipment cost $68,788 and had accumulated depreciation of $37,4ee at the beginning of the year. Additional depreciation for 2021 up to the point of the sale is $8,588. (Hint: Total accumulated depreciation equals the amount at the beginning of the year plus the anount recorded for the current year.) November 15 Several older pieces of equipment were improved by replacing major components at a cost of $54,100. These improvements are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2- capitalization of new cost.] Year-end adjusting entries: a. Depreciation on the equipment purchased on April 1, 2021, calculated using the straight-line method. b. Depreciation on the remaining equipment . $21.500. C. Amortization of the patent purchased on June 30, 2021, using the straight-line method. d. Accrued Interest payable on the note payable. e. Equipment with an original cost of $65.400 had the following related Information at the end of the year. accumulated depreciation of $40,300, expected cash flows of $15,700, and a fair value of $10,800. c. Amortization of the patent purchased on June 30, 2021, using the straight-line method. d. Accrued Interest payable on the note payable. e. Equipment with an original cost of $65.400 had the following related Information at the end of the year, accumulated depreciation of $40,300, expected cash flows of $15.700, and a fair value of $10,800. f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Using the information from the requirements above, complete the 'Analysis'. (Round "fixed asset turnover ratio answer to 2 decimal places.) Analyze how well Parts Unlimited manages its assets: (a) Calculate the fixed asset turnover ratio for the year, using the total amount of property, plant and equipment (net of accumulated deprecation). If the industry average fixed asset turnover is 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? (Hint: For the amount of fixed assets, use the net amount of all tangible long-term assets.) The fixed asset tumover ratio is: The company is more efficient at generating sales with its fixed assets. (b) Suppose the equipment purchased on April 1, 2021, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2021 was 2.000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2021 (ignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2021 would have been The transaction on June 30, 2021. shows the company purchased a patent for $40.000 from a third-party marketing company Suppose the company instead spent $40,000 to internally develop the new packaging technology, which it then patented. Calculate the difference in net income and total assets for 2021 [ignoring tax effects). Additional expense for 2021 The income and total assets in 2021 would have been higher. (True or False) e. Equipment with an original cost of $65.400 had the following related information at the end of the ye of $40,300, expected cash flows of $15,700, and a fair value of $10,800. f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare a multiple-step income statement for the period ended December 31, 2021. Choose the appropriat complete the company's income statement. The unadjusted, adjusted, or post-closing balances will appear based on your selection. $ 0 0 Post-closing Parts Unlimited Income Statement For the year ended December 31, 2021 Sales revenue Cost of goods sold Gross profit Operating expenses Salaries expense $ Utilities expense Depreciation expense Amortization expense 0 0 0 0 0 0 0 Total operating expenses Net Profit 0 0 0 Operating income 0 0 0 0 S 0 f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare a classified balance sheet as of December 31, 2021. Choose the appropriate accounts to complete the company's balance she The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Post-closing Parts Unlimited Balance Sheet December 31, 2021 Assets Liabilities Cash 174,300 Accounts payable s 12,100 Accounts receivable 20,900 Notes payable 95,000 Inventory 21,000 Interest payable 5,700 0 Income taxes payable 12,600 0 0 Total current assets 216,200 Total liabilities 125,400 Noncurrent assets: Stockholders' equity Land 340,000 Common stock 520,000 Equipment 388,300 Retained earnings 215,400 Accumulated depreciation 0 (122,700) Patent 39,000 0 0 Total stockholders' equity 735,400 Total assets $ 880.800 Total liabilities and stockholders' equity $ 880,800 2 2 On January 1, 2021, the general ledger of Parts Unlimited Included the following account balances: Accounts Title Cash Accounts Receivable Inventory Land Equipment Accumulated depreciation Accounts Payable Connon stock Retained Earnings Totals Debit Credit $162,480 12,400 37,888 348, eee 347,500 $172,eee 14,800 520, eee 193,300 $900,100 $900, 180 From January 1 to December 31, the following summary transactions occurred: a. Purchased Inventory on account. $325.800. b. Sold Inventory on account, $567.200. The Inventory cost $342600. c. Received cash from customers on account, $558,700. d. Pald cash on account. $328.500. e. Pald cash for salaries. $94.700, and for utilities. $52,700. In addition, Parts Unlimited had the following transactions during the year: April 1 Purchased equipment for $95,830 using a note payable, due in 12 months plus ex interest. The company also paid cash of $3,200 for freight and $3,888 for installation and testing of the equipment. The equipent has an estimated residual value of $18,eee and a ten-year service life. June 30 Purchased a patent for $40,000 from a third-party marketing company related to the packaging of the company's products. The patent has a 20-year useful life, after which it is expected to have no value. October 1 Sold equipment for $30,289. The equipment cost $68,788 and had accumulated depreciation of $37,4ee at the beginning of the year. Additional depreciation for 2021 up to the point of the sale is $8,588. (Hint: Total accumulated depreciation equals the amount at the beginning of the year plus the anount recorded for the current year.) November 15 Several older pieces of equipment were improved by replacing major components at a cost of $54,100. These improvements are expected to enhance the equipment's operating capabilities. [Record this transaction using Alternative 2- capitalization of new cost.] Year-end adjusting entries: a. Depreciation on the equipment purchased on April 1, 2021, calculated using the straight-line method. b. Depreciation on the remaining equipment . $21.500. C. Amortization of the patent purchased on June 30, 2021, using the straight-line method. d. Accrued Interest payable on the note payable. e. Equipment with an original cost of $65.400 had the following related Information at the end of the year. accumulated depreciation of $40,300, expected cash flows of $15,700, and a fair value of $10,800. c. Amortization of the patent purchased on June 30, 2021, using the straight-line method. d. Accrued Interest payable on the note payable. e. Equipment with an original cost of $65.400 had the following related Information at the end of the year, accumulated depreciation of $40,300, expected cash flows of $15.700, and a fair value of $10,800. f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Using the information from the requirements above, complete the 'Analysis'. (Round "fixed asset turnover ratio answer to 2 decimal places.) Analyze how well Parts Unlimited manages its assets: (a) Calculate the fixed asset turnover ratio for the year, using the total amount of property, plant and equipment (net of accumulated deprecation). If the industry average fixed asset turnover is 0.75, is the company more or less efficient at generating sales with its fixed assets than other companies in the same industry? (Hint: For the amount of fixed assets, use the net amount of all tangible long-term assets.) The fixed asset tumover ratio is: The company is more efficient at generating sales with its fixed assets. (b) Suppose the equipment purchased on April 1, 2021, had been depreciated using the units of production method. At the time of purchase, expected output was 20,000 units, and actual production for 2021 was 2.000 units. Calculate the amount of depreciation expense that would have been recorded and determine the difference in net income and total assets for 2021 (ignoring tax effects). Units-of-production depreciation: Depreciation expense under units-of-production method is higher. (True or False) Income and total assets in 2021 would have been The transaction on June 30, 2021. shows the company purchased a patent for $40.000 from a third-party marketing company Suppose the company instead spent $40,000 to internally develop the new packaging technology, which it then patented. Calculate the difference in net income and total assets for 2021 [ignoring tax effects). Additional expense for 2021 The income and total assets in 2021 would have been higher. (True or False) e. Equipment with an original cost of $65.400 had the following related information at the end of the ye of $40,300, expected cash flows of $15,700, and a fair value of $10,800. f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare a multiple-step income statement for the period ended December 31, 2021. Choose the appropriat complete the company's income statement. The unadjusted, adjusted, or post-closing balances will appear based on your selection. $ 0 0 Post-closing Parts Unlimited Income Statement For the year ended December 31, 2021 Sales revenue Cost of goods sold Gross profit Operating expenses Salaries expense $ Utilities expense Depreciation expense Amortization expense 0 0 0 0 0 0 0 Total operating expenses Net Profit 0 0 0 Operating income 0 0 0 0 S 0 f. Accrued Income taxes at the end of the year are $12,600. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis Prepare a classified balance sheet as of December 31, 2021. Choose the appropriate accounts to complete the company's balance she The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Post-closing Parts Unlimited Balance Sheet December 31, 2021 Assets Liabilities Cash 174,300 Accounts payable s 12,100 Accounts receivable 20,900 Notes payable 95,000 Inventory 21,000 Interest payable 5,700 0 Income taxes payable 12,600 0 0 Total current assets 216,200 Total liabilities 125,400 Noncurrent assets: Stockholders' equity Land 340,000 Common stock 520,000 Equipment 388,300 Retained earnings 215,400 Accumulated depreciation 0 (122,700) Patent 39,000 0 0 Total stockholders' equity 735,400 Total assets $ 880.800 Total liabilities and stockholders' equity $ 880,800 2 2