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ACCT300 Portfolio Project (Venture Consultants, Power and Demolition Company, and Warnerwood Accounting Cases)


Option #1: Venture Consultants, Power and Demolition Company, and Warnerwood Accounting Cases

Portfolio Project Option #1 is for accounting students who are sensing learners, and learn best from concrete materials and examples. If this is your learning style preference, you are practical and careful with detail. For this assignment, you are required to complete all three accounting cases: Venture Consultants, Power and Demolition Company, and Warnerwood. You will then present Parts 1, 2, and 3 of the Portfolio Project in Excel as journal entries, following the exact instructions that accompany each part.

Part 1:
Denzel Brooks opens a web consulting business called Venture Consultants and completes the following transactions in March:
March 1: Brooks invested $150,000 cash along with $22,000 of office equipment in the company.
March 2: Venture Consultants pre-paid $6,000 cash or six months’ rent for their office.
March 3: Venture Consultants made credit purchases for office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days.
March 6: Venture Consultants completed services for a client and immediately received $4,000 cash.
March 9: Venture Consultants completed a $7,500 project for a client who must pay within 30 days.
March 12: Venture Consultants paid $4,200 cash to settle the account payable created on March 3.
March 19: Venture Consultants paid a $5,000 cash premium on a 12-month insurance policy.
March 22: Venture Consultants received $3,500 cash as a partial payment for the work completed on March 9.
March 25: Venture Consultants completed work for another client for $3,820 on credit.
March 29: Brooks withdrew $5,100 cash from the company for personal use.
March 30: Venture Consultants purchased $600 of additional office supplies on credit.
March 31: Venture Consultants paid $500 cash for this month’s utility bill.

Instructions:
Prepare journals for the above economic transactions. Use the file called "Student Template" in the assignment section for Part #1, Link Works Co. Enter your journals to the general ledger using the same file name.

Part 2:
The following unadjusted trial balance is for Power and Demolition Company as of year-end for the April 30, 2015 fiscal year. The April 30, 2015 credit balance of the owner's equity account is $46,900, and the owner invested $40,000 cash in the company during 2015

NO. Account Title Debit Credit
101 Cash $7,000
126 Supplies $16,000
128 Pre-paid insurance $12,600
167 Equipment $200,000
168 Accumulated depreciation – equipment $14,000
201 Accounts payable $6,800
251 Long-term notes payable $30,000
301 Bonn, equity $86,900
302 Bonn, withdrawals $12,000
401 Demolition fees earned $187,000
623 Wage expense $41,400
633 Interest expense $3,300
640 Rent expense $13,200
683 Property tax expense $9,700
684 Repairs expense $4,700
690 Utilities expense $4,800
TOTALS $324,700 $324,700

Instructions:
a) Journalize the following adjusting entries as of fiscal year-end April 30, 2015.
b) Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.
c) Create financial statements.
The supplies available at the end of fiscal 2015 year are at a cost of $7,900.
The cost of expired insurance for the fiscal year is $10,600.
Annual depreciation on equipment is $7,000; no other depreciation adjustment was made in 2015.
The April utilities expense of $800 is not included in the adjusted trial balance, because the bill arrived after the trial balance was prepared. The $800 amount owed needs to be recorded..
The company's employees have earned $2000 of accrued wages in the fiscal year.
The rent expense not yet paid or recorded in the fiscal year is $3000.
Additional property taxes of $550 have been assessed for the fiscal year, but have not yet been paid or recorded in the accounts.
The $300 accrued interest for April has not yet been paid and reported.

Part 3:
The Warnerwood Company uses a perpetual inventory system. It entered the following purchases and sales transactions for March into the system:

Date Activities Units Acquired at Cost Cost per Unit Units Sold at Retail Price per unit
March 1 Beginning inventory 100 units $50
March 5 Purchase 400 units $55
March 9 Sales 420 $85
March 18 Purchase 120 units $60
March 25 Purchase 200 units $62
March 29 Sales 160 units $95
Totals 820 units 580 units

Instructions:
Show all of your work in an Excel spreadsheet for the following tasks:
Compute the number of units available for sale.
Compute the number of units in ending inventory.
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, and (c) weighted average. (Round the average cost per unit to 2 decimal places.)
Compute the gross profit earned by the company for each of the four costing methods. (Round the average cost per unit to 2 decimal places.)
Portfolio Project Option 1 Student Template
Option #1: Venture Consultants, Power and Demolition Company, and Warnerwood Accounting Cases

TUTORIAL PREVIEW
201
Account payable
$6,800
$6,800

Utilities payable



800

800

Wages payable



2000

2000

Rent Payable



3000

3000

PropertyTxPayable



550

550

Interest payable



300

300

File name: ACCT300 Portfolio Project.xls File type: .xls PRICE: $20

Presented below is the trial balance of the Crestwood Golf Club, Inc. as of December 31. The books are closed annually on December 31.

P3-9 (Adjusting and Closing) Presented below is the trial balance of the Crestwood Golf Club, Inc. as of December 31. The books are closed annually on December 31.
 
CRESTWOOD GOLF CLUB, INC.
TRIAL BALANCE DECEMBER 31
Debit/Credit
Cash $ 15,000
Accounts Receivable 13,000
Allowance for Doubtful Accounts $ 1,100
Prepaid Insurance 9,000
Land 350,000
Buildings 120,000
Accumulated Depreciation—Buildings 38,400
Equipment 150,000
Accumulated Depreciation—Equipment 70,000
Common Stock 400,000
Retained Earnings 82,000
Dues Revenue 200,000
Green Fees Revenue 5,900
Rent Revenue 17,600
Utilities Expenses 54,000
Salaries and Wages Expense 80,000
Maintenance and Repairs Expense 24,000
$815,000 $815,000

(a) Enter the balances in ledger accounts. Allow five lines for each account.
(b) From the trial balance and the information given below, prepare annual adjusting entries and post to the ledger accounts. (Omit explanations.)
(1) The buildings have an estimated life of 30 years with no salvage value (straight-line method).
(2) The equipment is depreciated at 10% per year.
(3) Insurance expired during the year $3,500.
(4) The rent revenue represents the amount received for 11 months for dining facilities. The  December rent has not yet been received.
(5) It is estimated that 12% of the accounts receivable will be uncollectible.
(6) Salaries and wages earned but not paid by December 31, $3,600.
(7) Dues received in advance from members $8,900.
(c) Prepare an adjusted trial balance.
(d) Prepare closing entries and post.

TUTORIAL PREVIEW
CRESTWOOD GOLF CLUB, INC.
Adjusted Trial Balance
December 31, XXXX
 
Dr.     
      Cr.     
Cash
$15,000
 
Accounts Receivable
13,000
 
Allowance for Doubtful Accounts
 
$1,560
Prepaid Insurance
5,500
 
Land 
350,000
 


 File name: P3-9 Crestwood Golf Club.xls File type: .xls PRICE: $15

Advance Products, Inc., has just organized a new division

P6-20 Advance Products, Inc., has just organized a new division to manufacture and sell specially

P6-20 Advance Products, Inc., has just organized a new division to manufacture and sell specially designed tables using select hardwoods for personal computers. The division’s monthly costs are shown in the schedule below:

Manufacturing costs:
Variable costs per unit:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $86
Variable manufacturing overhead . . . . . . . . . . $4
Fixed manufacturing overhead costs (total) . . . . $240,000

Selling and administrative costs:
Variable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15% of sales
Fixed (total) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000

Advance Products regards all of its workers as full-time employees and the company has a long-standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The tables sell for $250 each.

During the first month of operations, the following activity was recorded:
Units produced . . . . . . . . . . 4,000
Units sold . . . . . . . . . . . . . . 3,200

Required:
1. Compute the unit product cost under:
a. Absorption costing.
b. Variable costing.
2. Prepare an income statement for the month using absorption costing.
3. Prepare a contribution format income statement for the month using variable costing.
4. Assume that the company must obtain additional financing. As a member of top management, which of the statements that you have prepared in (2) and (3) above would you prefer to take with you to negotiate with the bank? Why?
5. Reconcile the absorption costing and variable costing net operating incomes in (2) and (3) above.

TUTORIAL PREVIEW
ADVANCE PRODUCTS, INC
Units Product Cost
Absorption
Costing
Variable
Costing
Direct materials
$             86
 $             86
Variable manufacturing overhead
                  4
                  4

File name: P6-20 Advance Products.xls File type: .xls PRICE: $10

Great Corporation has the following capital situation.

Based on the information below, calculate the weighted average cost of capital.

Great Corporation has the following capital situation.

Debt - One thousand bonds were issued five years ago at a coupon rate of 8%. They had 25-year terms and $1,000 face values. They are now selling to yield 9%. The tax rate is 36%

Preferred stock - Two thousand shares of preferred are outstanding, each of which pays an annual dividend of $7.50. They originally sold to yield 15% of their $50 face value. They're now selling to yield 8%.

Equity - Great Corp has 125,000 shares of common stock outstanding, currently selling at $14.48 per share. Dividend expected for next year is $1.00 and the growth rate is 5%.

TUTORIAL PREVIEW
Debt Capital:
Calculation of present value of Bonds:
Rate = 9%/2 =
4.5%
Nper = 20 x 2 =
40
PMT = 1,000 x 8%x1/2 =
-40

 File name: Great Corporation .xls File type: .xls PRICE: $10