IOT Business Management Consulting Company is a very well-known consulting company. You are lucky enough to be
Question:
IOT Business Management Consulting Company is a very well-known consulting company. You are lucky enough to be working as an accounting consultant for that company. John Smith, the CEO of the company asked for your professional analysis and financial modeling in relation to the client case below:
[Ray and his best friend Kelly combine their proprietorships and start a partnership named “Kelly’s Boutique”. The firm is a fashion production company. Both Ray and Kelly are financial wizard, they do not know a great deal about how a business operate, as a result, they come to your company for your professional advice in relation to operating the business and developing financial modeling software, in order the business to succeed.
The following date for the current year were provided by the client:
Account | Amount |
Cash and cash equivalents | 80,000 |
Inventories | 179,000 |
Equipment | 83,000 |
Land | 110,000 |
Loan | 100,000 |
Ray’s Capital | 220,000 |
Kelly’s Capital | 130,000 |
Ray’s Drawings | 20,000 |
Sales Revenue | 80,000 |
Beginning Inventory | 20,000 |
Cost of Goods Purchased | 40,000 |
Ending Inventory | 12,000 |
Operating Expense | 10,000 |
The Company’s plan for next year:
Plan |
Expect to start the first quarter with sales totaled $85,000. The company is looking forward to increasing the sales by 5000 quarterly. |
The expected purchases were $82000, $55000, 70000, 56000 respectively |
Company’s rent expense including electricity is 2500 quarterly. |
Employee’s salaries totaled 1500, paid at the end of each month. |
Sale the land that costing $38,000 for $30,000 in second quarter. |
The company policy is to maintain cash balance at the end of each quarter not less than $10,000. |
Instructions:
- Create Kelly’s Boutique financial analysis for December 31,2021 from the information provided by the client. The file should contain three worksheets, which are labeled Income Statement, Statement of Owner’s Equity, and Balance Sheet
- You are to create a fixed assets depreciation summary and individual depreciation worksheets for Kelly’s Boutique using the Double-Declining Balance method on the information tabulated above. The salvage value is 3000, and its useful life is 4 years.
Label your worksheet name as “Asset DDB”.
In the same work sheet, create Kelly’s Boutique’s fixed assets depreciation summary using the straight-line method.
Save the workbook as Fixed Assets Depreciation.
- Create a new Kelly’s Boutique’s cash budget by creating a new workbook called “Budgeting “and place the assumption information provided above.
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones