Practice Set Problem

I need this practice set project done the instructions are in the file. Leave student ID as is

Company Information & Summary of Significant Account Policies
Company began operations on November 1, 2024. The main operating goal of the company is to sell high end
robots. Customers may pay using cash or if appropriate, credit is extended to customers with terms 3/15, n/30 .
The company uses the perpetual inventory method and a FIFO cost system. The company follows a calendar year, with all
adjusting entries made at the end of the accounting period, December 31. The company uses the straight-line depreciation
for all depreciable assets. The company has decided to use the Allowance method to account for uncollectible accounts. At
the end of the period, based on industry standards, the company believes 2% of the balance in accounts recievable will be
uncollectible. The company purchases robots for resale only as such they carry them as inventory.
The company has two employees, one is a sales technician, salary of $5000 per month and the other employee is the office
manager with a salary of $8000 per month. Payroll is processed on the last day of the month, and paid on the first day of the
following month. This means the November 30 payroll with accrue into Salaries Payable and then be paid on Decemember 1.
Required:
1) Make sure your student ID is correct, this will change the information. Company engaged in the following transactions for November and
December. Record the following transactions on the Daily Transactions tab.
Note: Place debits first, credits second but do NOT indent credits. If more than one debit or credit, please list in alphabetical order to receive full
credit. Round to the penny unless otherwise noted.
1-Nov The owner invested $720000 into the company in exchange for 5,000 shares of common stock.
1-Nov The company purchased a computer system for $60000 and signed a one-year note for the entire balance. The note is due on
November 1, 2025 and has an annual rate of interest of 3%.
2-Nov Paid for two years rent on the office space, $14400.
3-Nov Purchased 10 robots at a total cost of $7000 each for cash, FOB Destination.
4-Nov Purchased $3500 of supplies on account, term n/30.
15-Nov Purchased 12 robots at a total cost of $7700 each on account, terms n/30, FOB Destination. Shipping of $150 was paid to the shipping
company by the appropriate party.
17-Nov Paid for the supplies purchased on November 4.
18-Nov Paid for a two-year insurance policy for the store, $6000. The policy was effective beginning December 1, 2024.
20-Nov Sold 15 robots for $10500 each on account, terms 3/15, n/30, the company uses FIFO to find the cost of goods sold. The robots were
shipped FOB Shipping Point. Record the sales revenue first.
28-Nov Received payment in full on account from the November 20 sale.
29-Nov Paid for November’s utilities bill $7200.
Prepared payroll for the month of November, the first payroll for the company. Record the Salares Expense entry first. The tax rates
30-Nov are as follows:
Federal Income Tax Rate – 15%.
NC State Income Tax Rate – 10%.
FICA Tax Rate – 7.65%.
Unemployment Tax Rate – 6% on the first $7000 of each employees earnings per year.
1-Dec Paid the employees the amount due to them from the November 30 payroll, taxes will be paid in January.
The company borrowed $65000 from Bank of America by signing a 15-year, 6% note. The note requires annual payments of $6693
1-Dec
beginning December 1, 2025.
1-Dec Purchased a new delivery truck to save customers on shipping. The total cost of the Delivery Truck was $80000.
4-Dec Paid the amount due from the November 15 purchase.
5-Dec Declared and paid $2000 in cash dividends to the stockholders of the company.
6-Dec Purchased $4200 of supplies on account, term n/30.
7-Dec Purchased 20 robots at a cost of $8470 each on account, terms n/30, FOB Destination.
Sold 22 robots for $11550 each on account, terms 2/10, n/30, FOB Shipping Point, the company uses FIFO to find the cost of goods sold.
15-Dec
Record the sales revenue first.
18-Dec Paid for an ad in the local newspaper, $7000.
24-Dec Received $92400 payment for 8 robots to be shipped on January 8, 2025.
31-Dec Prepared payroll for the month of December, the first payroll for the company. Record the Salaries Expense entry first. The tax rates
are as follows:
Federal Income Tax Rate – 15%.
NC State Income Tax Rate – 10%.
FICA Tax Rate – 7.65%.
Unemployment Tax Rate – 6% on the first $7000 of each employees earnings per year.
2) Post all the Daily Transactions to the Ledger on the Ledger tab.
3) As of December 31, a search revealed the following information. Record any necessary adjusting entries for the year on the Adjusting Entries
tab.
1 The computer equipment purchased on November 1 has a 5-year life and an expected residual (salvage) value of $6000.
2 Record any interest that has accrued on the note signed on November 1 for the computer system.
3 The rent paid on November 2 is for two years beginning on November 1.
4 The insurance policy purchased on November 18 is effective beginning December 1.
5 Supplies on hand as of December 31 totaled $1540.
6 The delivery truck purchased on December 1 has a 10-year life and an expected residual (salvage) value of $8000.
7 Accrue the interest, if needed, on the note signed on December 1.
8 Record any bad debt expense for the year ended December 31. Round answer to the whole dollar if needed.
9 Utilites accrued but not yet paid as of December 31 totaled $7600.
4) Post all the Adjusting Entires to the Ledger on the Ledger tab.
5) Based on the account balances in the ledger, create an adjusted trial balance on the Adjusted Trial Balance tab.
6) Based on the adjusted trial balance, prepare a multi-step income statement on the Income Statement tab.
7) Based on the adjusted trial balance, prepare the statement of stockholders’ equity on the Equity Statement tab.
8) Based on the adjusted trial balance, prepare the balance sheet on the Balance Sheet tab.
9) Prepare the closing entries (DO NOT POST them to the ledger, just produce the entries). When journaling, close the accounts in the order they
appear on the Trial Balance. Do one entry for revenue accounts, one for expense accounts and one for dividend accounts.
10) Calculate the ratios on the Ratios tab.
Enter your student ID #:
920658972
Company Name:
Product Sold:
robots
Daily Transactions Journal Page
Date
Account
1-Nov Cash
DR
560,000.00
Common Stock
1-Nov Computer Systems (Equipment)
10,000.00
Notes Payable
2-Nov Prepaid Rent
11,200.00
Cash
3-Nov Merchandise Inventory
50,000.00
Cash
4-Nov Supplies
2,500.00
Accounts Payable
15-Nov Merchandise Inventory
66,000.00
Accounts Payable
17-Nov Accounts Payable
2,500.00
Cash
18-Nov Prepaid Insurance
6,000.00
Cash
20-Nov Accounts Receivabe
127,500.00
Sales Revenue
20-Nov Cost of goods sold
Merchandise Inventory
83,000.00
28-Nov Cash
Sales Discount and Allowances
102,000.00
25,500.00
Accounts Receivable
29-Nov Utilities Expense
5,600.00
Cash
30-Nov Salaries Expense
10,000.00
Federal Income Tax Payable
State Income Tax Payable
FICA Tax Payable
Unemployment Tax Payable
Salaries Payable
30-Nov
1-Dec Salaries Payable
6,135.00
Cash
1-Dec Cash
15,000.00
Notes Payable
1-Dec Delivery Truck
30,000.00
Cash
4-Dec Accounts Payable
66,000.00
Cash
5-Dec Cash Dividend
Cash
2,000.00
6-Dec Supplies
3,000.00
Accounts Payable
7-Dec Merchandise Inventory
121,000.00
Accounts Payable
15-Dec Accounts Receivable
205,700.00
Sales Revenue
15-Dec Cost of goods sold
114,800.00
Merchandise Inventory
18-Dec Advertising Expense
5,000.00
Cash
24-Dec Cash
74,800.00
Unearned Revenue
31-Dec Salaries Expense
Federal Income Tax Payable
State Income Tax Payable
FICA Tax Payable
Unemployment Tax Payable
Salaries Payable
31-Dec
10,000.00
CR
560,000.00
10,000.00
11,200.00
50,000.00
2,500.00
66,000.00
2,500.00
6,000.00
127,500.00
83,000.00
127,500.00
5,600.00
1,500.00
1,000.00
765.00
600.00
6,135.00
6,135.00
15,000.00
30,000.00
66,000.00
2,000.00
3,000.00
121,000.00
205,700.00
114,800.00
5,000.00
74,800.00
1,500.00
1,000.00
765.00
240.00
6,495.00
Adjusting Entries Journal Page
Account
1 Depreciation Expense – Computer Equipment
DR
CR
300.00
Accumulated Depreciation – Computer Equipment
2 Interest Expense
300.00
50.00
Interest Payable
3 Rent Expense
50.00
933.33
Prepaid Rent
4 Insurance Expense
933.33
250.00
Prepaid Insurance
5 Supplies Expense
250.00
2,295.00
Supplies
6 Depreciation Expense – Delivery Truck
2,295.00
300.00
Accumulated Depreciation – Delivery truck
7 Interest Expense
300.00
200.00
Interest Payable
8 Bad Debts Expense
200.00
750.00
Allowance for Doubtful Accounts
9 Utilities Expense
Utilities Payable
750.00
1,800.00
1,800.00
General Ledger (T-Account)
Cash
560,000.00
11,200.00
Accounts Receivable
127,500.00
127,500.00
102,000.00
5,000.00
205,700.00
15,000.00
2,500.00
74,800.00
6,000.00
Allowance for Uncollectible
Accounts
–
5,600.00
6,135.00
205,700.00
–
30,000.00
66,000.00
Supplies
2,000.00
2,500.00
5,000.00
3,000.00
Prepaid Rent
2,295.00
11,200.00
–
10,267.00
3,205.00
612,365.00
Accumulated Depreciation Computer
Computer Equipment
10,000.00
10,000.00
–
Accounts Payable
2,500.00
2,500.00
66,000.00
3,000.00
–
Delivery Truck
300.00
30,000.00
300.00
30,000.00
Interest Payable
Deferred Revenue
50.00
121,000.00
–
58,000.00
Notes Payable
–
–
50.00
Federal Income Tax Payable
10,000.00
1,500.00
15,000.00
1,500.00
25,000.00
–
3,000.00
NC State Income Tax Payable
–
Unemployment Tax Payable
Common Stock
600.00
Retained Earnings
560,000.00
240.00
–
840.00
Sales Revenue
–
560,000.00
Service Revenue
Sales Discounts
205,700.00
–
205,700.00
–
25,500.00
–
Advertising Expense
Utilities Expense
5,000.00
1,800.00
–
25,500.00
Salaries Expense
10,000.00
10,000.00
5,000.00
–
1,800.00
–
20,000.00
Rent Expense
Interest Expense
Supplies Expense
933.33
50.00
2,295.00
2,295.00
933.33
–
Payroll Tax Expense
50.00
–
Insurance Expense
250.00
–
4,590.00
–
250.00
–
NOTE: Three accounts have c
Transactions, your Cash, Accoun
balance will show
unt)
owance for Uncollectible
Accounts
750.00
Inventory
50,000.00
83,000.00
66,000.00
114,800.00
121,000.00
750.00
Prepaid Rent
39,200.00
–
Prepaid Insurance
933.00
6,000.00
250.00
–
5,750.00
–
Accumulated Depreciation Delivery Truck
Delivery Truck
300.00
Deferred Revenue
–
300.00
Salaries Payable
74,800.00
6,135.00
6,495.00
74,800.00
State Income Tax Payable
–
12,630.00
FICA Tax Payable
1,000.00
765.00
1,000.00
765.00
2,000.00
–
1,530.00
Retained Earnings
Cash Dividends
2,000.00
–
Sales Discounts
2,000.00
–
Cost of Goods Sold
83,000.00
114,800.00
–
Salaries Expense
197,800.00
–
Depreciation Expense
300.00
300.00
–
Supplies Expense
600.00
–
Bad Debt Expense
750.00
–
750.00
–
OTE: Three accounts have check figures. After posting the Daily
sactions, your Cash, Accounts Receivable, and Cost of Goods Sold
balance will show GREEN if it is correct.
Adjusted Trial Balance
December 31, 2024
Account Name
Debit
Cash
612,365.00
Accounts Receivable
205,700.00
Allowance for Uncollectible Accounts
Inventory
39,200.00
Supplies
3,205.00
Prepaid Rent
10,267.00
Prepaid Insurance
5,750.00
Computer Equipment
10,000.00
Accumulated Depreciation – Computer
Delivery Truck
30,000.00
Accumulated Depreciation – Delivery Truck
Accounts Payable
Interest Payable
Deferred Revenue
74,800.00
Salaries Payable
Notes Payable
Federal Income Tax Payable
NC State Income Tax Payable
FICA Tax Payable
Unemployment Tax Payable
Common Stock
Retained Earnings
Dividends
2,000.00
Sales Revenue
Service Revenue
Sales Discounts
25,500.00
Cost of Goods Sold
197,800.00
Advertising Expense
5,000.00
Utilities Expense
18,000.00
Salaries Expense
20,000.00
Depreciation Expense
600.00
Rent Expense
933.33
Interest Expense
50.00
Supplies Expense
4,590.00
Bad Debt Expense
750.00
Payroll Tax Expense
Insurance Expense
250.00
Totals
1,266,760.33
Credit
750.00
300.00
300.00
58,000.00
50.00
12,630.00
25,000.00
3,000.00
2,000.00
1,530.00
840.00
560,000.00
247,973.00
205,700.00
1,118,073.00
Company
Multiple-Step Income Statement
For the Year Ended, December 31, 2024
Sales Revenue
205,700.00
Sales Discount and Allowances
25,500.00
Net Sales
Cost of goods sold
Gross Profit
Advertising Expense
5,000.00
Salaries Expense
20,000.00
Depreciation Expense – Computer Equipment
600.00
Rent Expense
933.33
Insurance Expense
250.00
Supplies Expense
4,590.00
Depreciation Expense – Delivery Truck
3,000.00
Utilities Expense
1,800.00
Bad Debts Expense
750.00
Total Operating Expenses
Operating Income
Interest Expense
Net Income
024
231,200.00
197,800.00
33,400.00
36,923.33
(3,523.33)
50.00
(3,573.33)
Company
Statement of Stockholders’ Equity
For the Year Ended, December 31, 2024
Common Stock
Balance, January 1
560,000.00
Net Income
Cash Dividend
Balance, December 31
560,000.00
ny
olders’ Equity
cember 31, 2024
Retained Earnings
Total Stockholders’ Equity
560,000.00
19,773.00
19,773.00
(2,000.00)
(2,000.00)
17,773.00
577,773.00
Company
Classified Balance Sheet
At December 31, 2024
Cash
612,365.00
Accounts Receivable
205,700.00
Allowance for Doubtful Accounts
(750.00)
Merchandise Inventory
39,200.00
Supplies
3,205.00
Prepaid Rent
10,267.00
Prepaid Insurance
5,750.00
Total Current Assets
Property, Plant & Equipment
Computer System
Accumulated Depeciation – Computer System
Delivery Truck
Accumulated Depeciation – Delivery Truck
10,000.00
(300.00)
30,000.00
(300.00)
Total Assets
Accounts Payable
58,000.00
Salaries Payable
12,630.00
Interest Payable
50.00
Federal Income Tax Payable
3,000.00
State Income Tax Payable
2,000.00
FICA Tax Payable
1,530.00
Unemployment Tax Payable
840.00
Utilities Payable
1,800.00
Unearned Revenue
74,800.00
Total Current Liabilities
3% Notes Payable
10,000.00
4% Notes Payable
15,000.00
Total Liabilities
Owners Equity
Common Stock
Total Stockholders’ Equity
Total Liabilities & Stockholders’ Equity
560,000.00
875,737.00
39,400.00
915,137.00
154,650.00
25,000.00
560,000.00
739,650.00
Closing Entries Journal Page
Date
Account
31-Dec Sales Revenue
DR
205,700.00
Retained Earnings
31-Dec Retained Earnings
247,973.00
Cost of goods sold
Advertising Expense
Salaries Expense
Depreciation Expense – Computer System
Rent Expense
Insurance Expense
Supplies Expense
depreciation Expense -delivery Truck
Utilities Expense
Bad Debts Expense
Interest Expense
31-Dec Retained Earnings
Cash Dividends
2,000.00
CR
205,700.00
197,800.00
5,000.00
20,000.00
300.00
933.00
250.00
4,590.00
300.00
18,000.00
750.00
50.00
2,000.00
For each ratio, in the answer cell, use FORMULAS to calculate the
ratio, do not type in the answer.
Ratio
Formula
Answer
Current Ratio
Current Assets/Current Liabilities
5.66 Use A Formula
Debt to Equity
Total Liabilities/Stockholders Equity
0.04 Use A Formula
Gross profit ratio GP/Net Sales
0.14 Use A Formula
Profit margin
Net income/Net sales
(0.02) Use A Formula
Return on Assets Net income/Average total assets
(0.00) Use A Formula