E 2 ACCT551 Course Project Instructions and Data 3 This course project is designed to apply financial reporting principles relating to intangibles, current liabilities and long-term liabilities for a ficititious (though realistic) company scenario. General Products, Inc. was incorporated in Nevada on January 1, 2016, to take over a local retail chain and to supply goods to customers at the most competitive prices, both in stores and onlin 5 To complete this project, you'll need to use the financial information below in the prior year's Balance Sheet (dated December 31, 2018) along with the current financial data provided for 2019. 6 7 8 70 General Products, Inc. Balance Sheet As of December 31, 2018 ASSETS 13 Current Assets Cash Accounts Receivable 11,980 20,520 Inventory 317,060 Inventory of Premiums (@$1.10 per premium item) 660 Total Current Assets 350,220 20 Long-Term Assets Investments Property Plant and Equipment (PP&E) Less Accumulated Depreciation Total Long-Term Assets Intangible Assets Trademarks Total Assets 66,775 750,000 ###### 660,000 726,775 190,000 1,266,995 Current Liabilities Accounts Payable Liability for Premiums Interest Payable (on 6% Bonde) LIABILITIES 50,722 550 E F FORD LONY om oooCo Intangible Assets Trademarks Total Assets G K 190,000 1,266,995 LIABILITIES Current Liabilities Accounts Payable Liability for Premiums Interest Payable (on 6% Bonds) Total Current Liabilities Long-Term Liabilities 50.722 550 3.000 54,272 6% Bonds Payable (due 2023) 100,000 Unamortized Discount on Bonds Payable (6,732) Total Long-Term Liabilities 93,268 Total Liabilities 147,540 STOCKHOLDERS EQUITY Common Stock (150,000 shares authorized, par value $1, 130,000 shares issued and outstanding) 130,000 Pald-In Capital in Excess of Par - Common Stock 954,000 Retained Earnings 35,455 Total Stockholders' Equity 1,119,455 Total Liabilities and Stockholders' Equity 1,266,995 5 Item# 22 General Products, Inc. provided the following financial and business-related data for 2019 below: 1 Trademarks were previously acquired for $200,000 on January 1, 2018. Estimated useful life at the time of acquisition was 20 years. in 2019 there was litigation challenging these trademarks brought by a competitor and General Products successfully defended these trademarks at a legal cost of $45,000. The new (updated) useful life of the trademarks was estimated to be 25 years from the date of acquisition. All sales were on credit and totaled $940,560. COGS totaled $780,650. Included in the total sales of $940,560 were the sales of 6,000 soap powder boxes. As a premium offer to increase soap powder sales, GeneralProducts includes one special coupon with every soap powder box. Customers can redeem 4 coupons to obtain one free premium item, a kitchen utensil. Based on past experience, 60% of the coupons are expected to be redeemed by customers. During 2019, 3,400 coupons were actually redeemed. Also in 2019, General Products purchased an additional 1,000 premiums (kitchen utensil items) @ $1.10 each on credit to add to its Inventory of Premiums. Syear 6% bonds were issued on January 1, 2018, sold to yield 8% interest. Interest is paid semiannually on January 1 and June 30 for these bonds. Maturity value of the bond issue is $100,000 and the issue was sold at a discount of $8,111 for an initial carrying value of $91,889. The bond indenture indicated that General Products may later call and redeem these bonds @101 any time after June 30, 2019. These bonds were subsequently called and redeemed on September 1, 2019, following the sale of a new 5% bond issue taking advantage of lower interest rates (see Item 5 below). The effective-interest method is applied to amortize the discount. To take advantage of lower interest rates and to finance the call and redemption of the previously issued 6% bonds @ 101 on September 1, 2019, General Products issued new 5% bonds with face value of $100,000 to yield 6%. The maturity period of these new 5% bonds is 10 years and interest is paid semiannually on January 1 and June 30. The new 5% bonds were issued at a discount of $7,438 for an initial carrying value of $$92,562 on July 1, 2019. The effective-interest method is applied to amortize the discount. Selling and Administrative Expenses excluding non-cash items totaled $87,345. PP&E is depreciated using the straight-line method over 25 years of life. Cash collected from customers totaled $906,450. Cash paid to suppliers for credit purchases totaled $728,254. Purchases of inventory totaled $689,525. All purchases were on credit. General Products purchased land for $30,000 in advance of construction of a building and paid in full. 81 83 84 BB 66 87 BB 89 90 91 92 33 OL The new 5% bonds were issued at a discount of $7,438 for an initial carrying The effective-interest method is applied to amortize the discount. Selling and Administrative Expenses excluding non-cash items totaled $87,345. PP&E is depreciated using the Cash collected from customers totaled $906,450. Cash paid to suppliers for credit purchases totaled $728,254. Purchases of inventory totaled $689,525. All purchases were on credit. General Products purchased land for $30,000 in advance of construction of a building and paid in full. Requirements to be completed: Requirement Record the necessary journal entries for 2019. Prepare the Income Statement and Statement of Retained Earnings for the year 2019. Prepare the classified Balance Sheet as of December 31, 2019. Show full calculation work! Please round your calculated answers to the closest dollar and ignore taxes