BUS FP 3061 Capella Financial Statements for Smith Industries & Jones Chips Inc Ques

BUS FP 3061 Capella Financial Statements for Smith Industries & Jones Chips Inc Ques

BUS FP 3061 Capella Financial Statements for Smith Industries & Jones Chips Inc Ques

OVERVIEW

Complete a 4-part assessment that requires you to categorize balance sheet accounts, prepare a balance sheet, prepare an income statement, and analyze items in a financial statement.

Because the balance sheet reflects all journal entries affecting the business since inception, knowledge of the placement of each account is essential to preparing a financial statement. Likewise preparation of the balance sheet, or statement of financial position, is an essential skill and requires the accountant to take information from the accounting system and summarize it in a single location. Generally accepted accounting principles (GAAP) require organizations to prepare both an income statement and a balance sheet. Before the balance sheet can be prepared, the organization’s net income must be determined. Finally, balance sheets do not always balance once they are prepared, and income statements do not always contain correct account data. This can cause havoc across the accounting department and requires the accountant to locate the missing or incorrect data.

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  • CONTEXT

    Assessment 1 addressed internal and external users of accounting information. The characteristic that sets them apart is the type of data that they require. When an organization reports its financial results to the world, the external users look to see if the organization made any money during its most recent year and whether the assets the organization owns minus the debts it owes result in any profits that can be put back into the organization to make more money for the organization, or reward the shareholders for their investment in the organization.

  • QUESTIONS TO CONSIDER

    To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.

    • What are six terms that you consider to be associated with balance sheet liabilities and equity (liabilities and leftovers)?
    • Consider why these items should be included as a liability or equity in a business organization.

  • RESOURCES

    REQUIRED RESOURCES

    The following resources are required to complete the assessment.

    Capella Resources

    Click the links provided to view the following resources:

    ASSESSMENT INSTRUCTIONS

    This assessment includes four parts. Use the templates provided for each part to complete the assessment. All the templates are linked in the Resources under the Required Resources heading. Submit all four templates for this assessment.

    PART 1: CATEGORIZING BALANCE SHEET ACCOUNT

    Accounts are either temporary or permanent, with the temporary ones assigned to revenues and expenses, leaving the permanent ones to reside on the balance sheet. Because the balance sheet reflects all journal entries affecting the business since inception, knowledge of the placement of each account is essential to preparing the statement. Because you have been studying the parts of the balance sheet, this is an opportunity to apply your knowledge to an important piece of the accounting cycle.Determine the correct balance sheet category for each of the following accounts. Use the Assessment 2, Part 1 Template to complete this part of the assessment.

    1. Accounts payable.
    2. Equipment.
    3. Prepaid rent.
    4. Short-term investments.
    5. Accounts receivable.
    6. Land.
    7. Common stock.
    8. Cash.
    9. Accumulated depreciation.
    10. Goodwill.
    11. Bonds payable.
    12. Retained earnings.
    13. Preferred stock.
    14. Mortgage payable.
    15. Salaries payable.
    16. Allowance for uncollectibles.
    17. Inventories.
    18. Patent.
    19. Income tax payable.
    20. Security deposits.

    PART 2: BALANCE SHEET PREPARATION

    Reporting the results of an organization’s business transactions requires the preparation of financial statements that will be shared with both internal and external users of financial data. For this reason, preparation of the balance sheet, or statement of financial position, is an essential skill and requires the accountant to take information from the accounting system and summarize it in a single location. This assessment demonstrates your skill in the preparation of this financial statement.Use the following account information to prepare the 2011 balance sheet for Blaze Industries. Be sure to use the proper balance sheet format. If you need to research this format, you may wish to start with the suggested materials in the Resources. Use the Assessment 2, Part 2 Template to complete this part of the assessment.

    • Wages payable: $880.00.
    • Supplies: $80.00.
    • Common stock: $10,000.00.
    • Equipment: $217,200.00.
    • Interest payable: $3,600.00.
    • Retained earnings: $27,520.00.
    • Accounts receivable: $400.00.
    • Long-term bonds payable: $150,000.00.
    • Cash: $3,050.00.
    • Advances from customers: $460.00.
    • Prepaid insurance: $830.00.
    • Accumulated depreciation: $29,100.00.

    PART 3: INCOME STATEMENT PREPARATION

    Generally accepted accounting principles (GAAP) require organizations to prepare both an income statement and a balance sheet. Before the balance sheet can be prepared, the organization’s net income must be determined. This requires the accountant to pull together data from numerous system accounts and other sources of information. In this part of the assessment, demonstrate your skill in putting together the necessary account data and preparing an income statement in good form.Use the Assessment 2, Part 3 Template to complete Part 3 of the assessment. On the first page of the template is financial data for Southwest Business School. On the second page is a blank income statement. Use the information provided on the first page to prepare the income statement on the second page.

    PART 4: ANALYZING ITEMS IN THE FINANCIAL STATEMENT

    Balance sheets do not always balance once they are prepared, and income statements do not always contain correct account data. This can cause havoc across the accounting department and requires the accountant to locate the missing or incorrect data. Financial statement preparation will be an important skill during this process, as you will discover when you determine the missing amounts in the statement in this part of the assessment.Use the Assessment 2, Part 4 template to complete Part 4 of the assessment. In each of the two sets of organization financial statement information provided in the template, two items have been omitted. Analyze the financial statements to determine the missing amounts and fill them in on the template to complete the financial statement information. Be sure to show your work in the space provided under the table in the template.

  • Introducing Financial Statements Scoring Guide

    CRITERIA DISTINGUISHED
    Determine the correct balance sheet category for accounts. Determines the correct balance sheet category for accounts, demonstrating insight and understanding of its purpose.
    Prepare a balance sheet for a company using appropriate financial data. Prepares a balance sheet for a company using the correct financial data and computations.
    Prepare a summarized income statement for a company using appropriate financial data. Prepares a summarized income statement for a company using the appropriate financial data and computations.
    Analyze specific financial information from a company’s financial statements. Interprets specific financial information from a company’s financial statements, demonstrating insight and understanding of its purpose.

 

attachment_1

BUS-FP3061 – Fundamentals of Accounting

Instructions

In each of the two sets of organization financial statement information, two items have been omitted. Replace the question marks with the missing amounts. Use the area below the table to show any calculations used to arrive at the final answer for each missing amount.

Smith Industries ($) Jones Chips, Inc. ($)
Beginning of year:
Total assets 110,000 129,000
Total liabilities 85,000 ?
Total equities ? 80,000
End of year:
Total assets 160,000 180,000
Total liabilities 120,000 50,000
Total equities 40,000 130,000
Changes during the year in equities:
Additional owner investment ? 25,000
Owner’s withdrawals 29,000 ?
Total revenues 215,000 100,000
Total expenses 175,000 60,000

 

attachment_2

BUS-FP3061 – Fundamentals of Accounting

Instructions

In each of the two sets of organization financial statement information, two items have been omitted. Replace the question marks with the missing amounts. Use the area below the table to show any calculations used to arrive at the final answer for each missing amount.

Smith Industries ($) Jones Chips, Inc. ($)
Beginning of year:
Total assets 110,000 129,000
Total liabilities 85,000 ?
Total equities ? 80,000
End of year:
Total assets 160,000 180,000
Total liabilities 120,000 50,000
Total equities 40,000 130,000
Changes during the year in equities:
Additional owner investment ? 25,000
Owner’s withdrawals 29,000 ?
Total revenues 215,000 100,000
Total expenses 175,000 60,000
attachment_3BUS-FP3061 – Fundamental Accounting Principles
Assessment 2, Part 1 TemplateInstructions: Using the following designations for balance sheet categories, place the designator in the column next to the account title.

  • (CA) – Current Asset
  • (LTA) – Long-term Asset
  • (CL) – Current Liability
  • (LTL) – Long-term Liability
  • (EQ) – Equity

 

 

Account Title Balance Sheet Category
Accounts Payable
Equipment
Prepaid rent
Short-term investments
Accounts receivable
Land
Common stock
Cash
Accumulated depreciation
Goodwill
Bonds payable
Retained earnings
Preferred stock
Mortgage payable
Salaries payable
Allowance for uncollectibles
Inventories
Patent
Income tax payable
Short-term security deposits

attachment_4

BUS-FP3061 Fundamentals of Accounting

Use the following account information to prepare the 2011 balance sheet for Blaze Industries. Be sure to use the proper format. If you need to research the format for balance sheets, you may wish to start with the suggested materials in Resources.

  • Wages payable – $880.00.
  • Supplies – $80.00.
  • Common stock – $10,000.00.
  • Equipment – $217,200.00.
  • Interest payable – $3,600.00.
  • Retained earnings – $27,520.00.
  • Accounts receivable – $400.00.
  • Long-term bonds payable – $150,000.00.
  • Cash – $3,050.00.
  • Advances from customers – $460.00.
  • Prepaid insurance – $830.00.
  • Accumulated depreciation – $29,100.00.

Blaze Industries
Balance Sheet, as of December 31, 2011

attachment_5

BUS-FP3061 – Fundamentals of Accounting

Southwest Business School

Adjusted Trial Balance

December 31 20XX
  Debit ($) Credit ($)
Cash………………………………………………………………………………….. 26,000
Accounts receivable…………………………………………………………….. 7,500
Teaching supplies……………………………………………………………….. 2,600
Prepaid insurance……………………………………………………………….. 12,000
Prepaid rent………………………………………………………………………… 0
Professional library……………………………………………………………… 30,000
Accumulated depreciation—Professional library……………………… 15,000
Equipment………………………………………………………………………….. 70,000
Accumulated depreciation—Equipment…………………………………. 28,000
Accounts payable………………………………………………………………… 36,000
Salaries payable………………………………………………………………….. 400
Unearned training fees…………………………………………………………. 6,600
Common stock……………………………………………………………………. 10,000
Retained earnings……………………………………………………………….. 53,600
Dividends……………………………………………………………………………. 40,000
Tuition fees earned……………………………………………………………… 109,500
Training fees earned……………………………………………………………. 42,400
Depreciation expense—Professional library…………………………… 6,000
Depreciation expense—Equipment……………………………………….. 12,000
Salaries expense…………………………………………………………………. 48,400
Insurance expense………………………………………………………………. 3,000
Rent expense……………………………………………………………………… 24,000
Teaching supplies expense………………………………………………….. 7,400
Advertising expense…………………………………………………………….. 7,000
Utilities expense…………………………………………………………………..       5,600 _______
Totals………………………………………………………………………………… $301,500 $301,500

Southwest Business School

Income Statement

For Year Ended December 31, 20XX

attachment_6

BUS-FP3061 – Fundamentals of Accounting

Instructions

In each of the two sets of organization financial statement information, two items have been omitted. Replace the question marks with the missing amounts. Use the area below the table to show any calculations used to arrive at the final answer for each missing amount.

Smith Industries ($) Jones Chips, Inc. ($)
Beginning of year:
Total assets 110,000 129,000
Total liabilities 85,000 ?
Total equities ? 80,000
End of year:
Total assets 160,000 180,000
Total liabilities 120,000 50,000
Total equities 40,000 130,000
Changes during the year in equities:
Additional owner investment ? 25,000
Owner’s withdrawals 29,000 ?
Total revenues 215,000 100,000
Total expenses 175,000 60,000