ACCT550 week 7 course project

The objective is to test student skills in using the given financial data to prepare a comprehensive balance sheet and multi-step income statement in good form .The given financial data will be comprised of all the various subgroupings that are reported in a multi-step income statement and balance sheet (operating revenues and expenses, other revenues and expenses and irregular items, current assets, investment, fixed assets, intangibles, current liabilities, long-term liabilities, and the equity sections).

Guideline

Read the given financial data of New York Traders Inc.

Determine which accounts belong to the balance sheet and which accounts belong to the income statement.

Determine to which subgroup of balance sheet or income statement each account belongs.

Compute the correct account balances that should be reported in balance sheet and correct amounts of revenues and expenses that should be reported in income statement.

Arrange the accounts in proper order and functionality.

Prepare a comprehensive balance sheet in good form.

Prepare a multi-step income statement in good form.

Put the Course Project in the Dropbox for the project in Week 7.

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Grading Rubric

Category Points % Description

Making proper selection of accounts relative to the balance sheet or the income statement 15 10 From the provided listing of accounts, determine which accounts are balance sheet accounts and which accounts are income statement accounts.

Putting the accounts into the proper subgroup according to functionality 15

10 Each account belongs to a particular subgroup. The student is to determine to which subgroup the account belongs. This should be done according to functionality.

Prepare the balance sheet in good form with correct amount of financial items.

60 40

Proper form is important in the preparation of the balance sheet. Examples can be found in the text.

Prepare the income statement in good form with correct amount of financial items.

45

30 Proper form is important in the preparation of the income statement. Examples can be found in the text.

Showing full work of computation to arrive at the correct amount of financial items

15

10 A quality paper will meet or exceed all of the above requirements.

Total 150 100

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Financial Data of New York Traders Inc. as of January 1, 2016

Accounts Payable 200,500

Account Receivable 165,700

Accumulated Depreciations 350,000

Additional Paid-In Capital 40,000

Allowance for Doubtful Accounts 2,650

Building and Equipment

1,120,000

Cash 45,300

Common Stock 544,850

Copyrights 112,000

Customer Deposits (expected to be paid in 2017) 375

Goodwill 225,000

Income Taxes Payable 42,340

Inventories 315,250

Long-term Investments in Warren Co.

95,630

Deposits With Vendors 47,200

Land 125,000

Mortgage Payable ($2,780 per month) 667,200

2% Notes Payable to Banks ( due 2017)

26,000

Notes Receivable (due 2017) 16,000

Patents 219,335

Retained Earnings 127,500

Trademarks 115,000

Twenty-year, 12% Bonds, Due 1/1/2020 600,000

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Financial Data of New York Traders Inc. for the Year 2016

1 Finished Goods inventory purchased from suppliers on account.

2/10/2016 10,000 units @ $26? each

6/12/2016 15,000 units @ $28? each

10/23/2016 12,000 units @ $29 each

11/25/2016 8,000 units @ $30 each

New York Traders Inc. uses periodic inventory system and LIFO costing method. All purchases and sales are made on account.

2

Payments made to suppliers on account during 2016 are $1,124,450.

3

Sales made to customers on account are 49,356 units @ $36 each

4 Cash collected from customers during 2016 is $1,750,700

5

Total Interest paid on Notes Payable and Bonds Payable amounted to $17,415

6

Rental Income on property leased out $ 25,650

7

New York Traders Inc. was operating a retail store at Chicago. Original cost of building and equipment was $120,000 with a book value of $95,000. During 2016 New York Traders disposed of this store at a loss of $35,800?.

8

New York Traders Inc. wants to make an allowance for doubtful debts at 2% on accounts receivable for the year 2016.

9

Selling and Administrative expenses are $128,475. These expenses include $56,000 depreciation expense on Building and Equipment but exclude bad debts expenses.

10

Income Tax Expense paid is $90,500. New York Traders Income Tax Rate for 2016 is 30%.