You have decided to open a dog-walking company, which opens for business on January 1^st. During the month of January, your company engages in many business transactions.

Download the Excel spreadsheet Happy Pets Inc. for your company in the module folder. The spreadsheet includes the following tabs:

1. Transactions Details the transactions that occurred in the month of January
2. Journal General journal for the company
3. Ledger General ledger for relevant accounts
4. Trial Balance Template for unadjusted and adjusted trial balances
5. IS Income Statement template
6. SE Statement of Stockholders Equity template
7. BS Balance Sheet template
8. CF Statement of Cash Flows template

Required:

Part A

• Prepare journal entries for all the transactions occurring in January
• Post entries to the general ledger
• Prepare the unadjusted trial balance as of January 31^st
• Prepare adjusting entries at January 31^st
• Post adjusting entries to the general ledger
• Prepare the adjusted trial balance as January 31^st
• Prepare closing entries and prepare trial balance at February 1^st
• Prepare the four primary financial statements on January 31^st
• Include a ratio analysis of your company and include the industry averages. Calculate at least one ratio from each category listed: Liquidity, Solvency, and Profitability and provide an explanation on what it means to the company.

You have decided to open a dog-walking company. Happy Pets was incorporated on January 1st, 2019. The business maintains a retail pet store, providing gourmet dog food and treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding. During the year, your company engages in many business transactions. Download the Excel spreadsheet Happy Pets Inc. for your company in the module folder. The spreadsheet includes the following tabs: Units Unit Cost 395,000 4,250 17025 120 January 1st February 8th March 1st March 31st April 1st April 10th May 15th May 30th June 1st June 30th 3,900 13,480 22,000 1,540 11,020 12,625 964 380 29 100,000 14,522 July 25th July 31st Common stock is issued in exchange for cash in the amount of The company purchases and pays for 170 units of gourmet dog food at a price of $25 per unit .............. The company pays cash for a one-year insurance policy in the amount of Rent on a retail space for 12 months is paid in the amount of .... Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of ...... Grooming supplies purchased on account in the amount of .. The company purchases and pays for another 380 units of gourmet dog food at a price of $29 per unit.... Grooming services are performed on account in the amount of ..... The company pays for advertisements to be run for the next 12 months in the amount of .... The company issues a 5-year notes payable with their bank for $100,000 and interest at an annual rate of 6%. Interest is due on June 30th each year and the principal will be paid in full at the end of the 5 year period. ....... Dog-walking services are performed on account in the amount of 105 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using the gross method in the amount of (see note c for cost flow assumptions) ...... Boarding services are provided on account in the amount of .... The company receives full payment from the customer for the July 31st sale. Pet sitting services are performed on account in the amount of Customer payments are received for services previously provided in the amount of 100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using the net method in the amount of ..... The company receives payment for half of the October 13th sale. Equipment originally purchased on April 1st for $2400 is sold for $2000 cash A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation The bookkeeper is paid $4,500 for the previous month's services -105 29 August 2nd August 6th September 15th September 29th October 13th 7,350 6,380 7,203 6,345 1,350 -100 29 7,300 3,650 October 29th November 1st November 15th December 15th 4,500 924 Additional information: a. Grooming supplies on hand at the end of the month are as follows: ... b. The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts is estimated as 4% of outstanding receivables at the end of the year c. The Company uses a perpetual inventory system and accounts for costs using the First-In-First-Out cost flow assumption. On December 31st, a count of ending inventory reveals that there are 345 bags of dog food on hand. d. All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statement. e. The effective interest method is used to amortize bond premiums and discounts f. Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest expense. & The bookkeeper is paid a salary of $4,500 on the 15th of every month. h. The company declared dividends of $750 for the year i. Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation and interest expense, are considered general & administrative. REQUIRED: In mit in on PARTA Prepare joumal entries for each transaction listed above (with descriptions). Post journal entries to the general ledger accounts. Prepare an unadjusted trial balance. Prepare all necessary adjusting joumal entries (with descriptions) and post to the general ledger. Prepare an adjusted trial balance on December 31st. Prepare closing entries, post to the general ledger, and carryforward balances to January 1st of the next year. Prepare the following financial statements on December 31st (ignore income taxes): a. Income Statement (multi-step, see Example 5.2 in textbook) b. Statement of Stockholders' Equity c. Balance Sheet (classified) d. Statement of Cash Flows (indirect method) Include a ratio analysis of your company and include the industry averages. Refer to Yahoo Finance or a comparable financial site to locate industry averages for your company. Calculate at least one ratio from each category listed: Liquidity, Solvency, and Profitability, and provide an explanation on what it means to the company (See Chapter 3 in the textbook, pages 128 - 133 and Chapter 4 in the textbook, pages 193 - 199). Rename the excel file Lastname_Portfolio Project_Option 2.xls and submit your completed project online. Journal Date Accounts Debit Credit LIABILITIES STOCKHOLDERS' EQUITY TEMPORARY ACCOUNTS Accounts Payable Dividende Payable Common Stock Adverti s e Interest Payable Allowance for Account Cost of Good Sold Bad Debt Expert HAPPY PETS Income Statement For the year ended December 31, 2019 Sales revenue (net) Cost of goods sold Gross profit Operating expenses: Selling expenses General & administrative expenses Depreciation expense Total operating expenses Operating Income Other items: Interest expense Gain on sale of equipment Net Income HAPPY PETS Statement of Stockholders' Equity For the Year Ended December 31st, 2019 Common Stock Retained Earnings Total Beginning Balance Issuance of Stock Add: Net Income Less: Dividends Ending Balance Balance Sheet As of December 31st, 2019 ASSETS Current assets: Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Supplies Prepaid insurance Prepaid rent Prepaid advertising Total current assets Long term assets: Equipment Less: Accumulated depreciation Total long term assets TOTAL ASSETS LIABILITIES Current Liabilities: Accounts payable Interest payable Salaries payable Dividends payable Total Current Liabilities Long Term Liabilities Notes payable Total Liabilities STOCKHOLDERS' EQUITY Common Stock Retained Earnings Total Stockholders' Equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY HAPPY PETS Statement of Cash Flows For the year ended December 31st, 2019 When completing this section, make sure to note whether it should be an "Increase or Decrease" in the account Cash Flows from Operating Activities Net Income Adjustments for noncash effects: Depreciation expense Bad debt expense Gain on sale of equipment * Changes in current assets and current liabilities: Increase/Decrease in accounts receivable Increase/Decrease in inventory Increase/Decrease in supplies Increase/Decrease in prepaid insurance Increase/Decrease in prepaid rent Increase/Decrease in prepaid advertising Increase/Decrease in accounts payable Increase/Decrease in interest payable Increase/Decrease in salaries payable Net cash flows for operating activities Cash Flows from Investing Activities Purchase of equipment Proceeds from sale of equipment Net cash flows for investing activities Cash Flows from Financing Activities Issuance of common stock Proceeds from bond issuance Payment of dividends Net cash flows from financing activities Net increase in cash Beginning cash balance, Jan. 1 Ending cash balance, December 31 You have decided to open a dog-walking company. Happy Pets was incorporated on January 1st, 2019. The business maintains a retail pet store, providing gourmet dog food and treats, and also provides a full range of pet care services, including grooming, dog-walking, and boarding. During the year, your company engages in many business transactions. Download the Excel spreadsheet Happy Pets Inc. for your company in the module folder. The spreadsheet includes the following tabs: Units Unit Cost 395,000 4,250 17025 120 January 1st February 8th March 1st March 31st April 1st April 10th May 15th May 30th June 1st June 30th 3,900 13,480 22,000 1,540 11,020 12,625 964 380 29 100,000 14,522 July 25th July 31st Common stock is issued in exchange for cash in the amount of The company purchases and pays for 170 units of gourmet dog food at a price of $25 per unit .............. The company pays cash for a one-year insurance policy in the amount of Rent on a retail space for 12 months is paid in the amount of .... Grooming and boarding equipment with a useful life of 2 years is purchased for cash in the amount of ...... Grooming supplies purchased on account in the amount of .. The company purchases and pays for another 380 units of gourmet dog food at a price of $29 per unit.... Grooming services are performed on account in the amount of ..... The company pays for advertisements to be run for the next 12 months in the amount of .... The company issues a 5-year notes payable with their bank for $100,000 and interest at an annual rate of 6%. Interest is due on June 30th each year and the principal will be paid in full at the end of the 5 year period. ....... Dog-walking services are performed on account in the amount of 105 units of gourmet dog food are sold for $70 per unit with terms 2/10, n/30. The sale is recorded using the gross method in the amount of (see note c for cost flow assumptions) ...... Boarding services are provided on account in the amount of .... The company receives full payment from the customer for the July 31st sale. Pet sitting services are performed on account in the amount of Customer payments are received for services previously provided in the amount of 100 units of gourmet dog food are sold for $73 per unit with terms 2/10, n/30. The sale is recorded using the net method in the amount of ..... The company receives payment for half of the October 13th sale. Equipment originally purchased on April 1st for $2400 is sold for $2000 cash A bookkeeper is hired to help the company with daily accounting taxes and annual tax preparation The bookkeeper is paid $4,500 for the previous month's services -105 29 August 2nd August 6th September 15th September 29th October 13th 7,350 6,380 7,203 6,345 1,350 -100 29 7,300 3,650 October 29th November 1st November 15th December 15th 4,500 924 Additional information: a. Grooming supplies on hand at the end of the month are as follows: ... b. The year-end balance reported at the end of the year for the Allowance for Doubtful Accounts is estimated as 4% of outstanding receivables at the end of the year c. The Company uses a perpetual inventory system and accounts for costs using the First-In-First-Out cost flow assumption. On December 31st, a count of ending inventory reveals that there are 345 bags of dog food on hand. d. All revenue is recorded in the "Sales Revenue" account and reported net of cash discounts on the income statement. e. The effective interest method is used to amortize bond premiums and discounts f. Adjustments are made at the end of the year for prepaid insurance, rent, advertising, depreciation, and interest expense. & The bookkeeper is paid a salary of $4,500 on the 15th of every month. h. The company declared dividends of $750 for the year i. Assume selling expenses include advertising and supplies expense. All other expenses, other than depreciation and interest expense, are considered general & administrative. REQUIRED: In mit in on PARTA Prepare joumal entries for each transaction listed above (with descriptions). Post journal entries to the general ledger accounts. Prepare an unadjusted trial balance. Prepare all necessary adjusting joumal entries (with descriptions) and post to the general ledger. Prepare an adjusted trial balance on December 31st. Prepare closing entries, post to the general ledger, and carryforward balances to January 1st of the next year. Prepare the following financial statements on December 31st (ignore income taxes): a. Income Statement (multi-step, see Example 5.2 in textbook) b. Statement of Stockholders' Equity c. Balance Sheet (classified) d. Statement of Cash Flows (indirect method) Include a ratio analysis of your company and include the industry averages. Refer to Yahoo Finance or a comparable financial site to locate industry averages for your company. Calculate at least one ratio from each category listed: Liquidity, Solvency, and Profitability, and provide an explanation on what it means to the company (See Chapter 3 in the textbook, pages 128 - 133 and Chapter 4 in the textbook, pages 193 - 199). Rename the excel file Lastname_Portfolio Project_Option 2.xls and submit your completed project online. Journal Date Accounts Debit Credit LIABILITIES STOCKHOLDERS' EQUITY TEMPORARY ACCOUNTS Accounts Payable Dividende Payable Common Stock Adverti s e Interest Payable Allowance for Account Cost of Good Sold Bad Debt Expert HAPPY PETS Income Statement For the year ended December 31, 2019 Sales revenue (net) Cost of goods sold Gross profit Operating expenses: Selling expenses General & administrative expenses Depreciation expense Total operating expenses Operating Income Other items: Interest expense Gain on sale of equipment Net Income HAPPY PETS Statement of Stockholders' Equity For the Year Ended December 31st, 2019 Common Stock Retained Earnings Total Beginning Balance Issuance of Stock Add: Net Income Less: Dividends Ending Balance Balance Sheet As of December 31st, 2019 ASSETS Current assets: Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Supplies Prepaid insurance Prepaid rent Prepaid advertising Total current assets Long term assets: Equipment Less: Accumulated depreciation Total long term assets TOTAL ASSETS LIABILITIES Current Liabilities: Accounts payable Interest payable Salaries payable Dividends payable Total Current Liabilities Long Term Liabilities Notes payable Total Liabilities STOCKHOLDERS' EQUITY Common Stock Retained Earnings Total Stockholders' Equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY HAPPY PETS Statement of Cash Flows For the year ended December 31st, 2019 When completing this section, make sure to note whether it should be an "Increase or Decrease" in the account Cash Flows from Operating Activities Net Income Adjustments for noncash effects: Depreciation expense Bad debt expense Gain on sale of equipment * Changes in current assets and current liabilities: Increase/Decrease in accounts receivable Increase/Decrease in inventory Increase/Decrease in supplies Increase/Decrease in prepaid insurance Increase/Decrease in prepaid rent Increase/Decrease in prepaid advertising Increase/Decrease in accounts payable Increase/Decrease in interest payable Increase/Decrease in salaries payable Net cash flows for operating activities Cash Flows from Investing Activities Purchase of equipment Proceeds from sale of equipment Net cash flows for investing activities Cash Flows from Financing Activities Issuance of common stock Proceeds from bond issuance Payment of dividends Net cash flows from financing activities Net increase in cash Beginning cash balance, Jan. 1 Ending cash balance, December 31