Hogs Hats is a retail company that buys hats from a manufacturer and sells them in...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Hogs Hats is a retail company that buys hats from a manufacturer and sells them in its store. You have been assigned to help Hogs compile its financial statements for the year ended December 31, 2017. Using the Excel templates provided on Blackboard, which contain all account names along with beginning-of-year balances for permanent accounts in italics, complete A through C below. You may complete the handout electronically or on paper, but you must turn in a physical copy of the handout. Pay careful attention to the underlined instructions and hints. A. Transactions and Adjusting Entries: The information provided below pertains to the fiscal year 2017. Record all transactions in the General Journal. Make sure that you also include any adjusting entries that are required at the end of the accounting cycle on December 31, 2017. Label each entry according to its item number and letter below, and include dates where provided. Some items require multiple entries (e.g., item 3a): 1. Sales, Accounts Receivable, and Purchases (no date required for these entries) a. The company sold 1,640 hats on account for $30 each. b. Cash collections on accounts receivable during the year totaled $42,000. c. Hogs identified $350 of receivables as uncollectible and wrote them off. d. Hogs uses the percentage-of-receivables approach to estimating bad debts, and estimates that 12% of ending receivables are uncollectible at December 31, 2017. Hogs bought $21,570 of inventory on account and uses a periodic inventory system. f. The company made cash payments of $21,500 to suppliers for accounts payable. e. 2. Equipment a. Hogs uses straight-line depreciation for all of the following equipment: ID# 1256 1876 4299 Historical Cost ($) Useful Life (yrs.) Salvage Value ($) 12,000 10 1,200 1,700 5 300 22,000 5 1,000 b. On July 1, the equipment with ID# 1876 was sold for $620. On December 31, new equipment was purchased for $3,000. c. Date Purchased Jan. 1, 2011 Jan. 1, 2013 Jan. 1, 2016 3. Debt a. At the beginning of the year, the company had a $2,400 outstanding note payable with an 8% annual interest rate that was issued on September 1, 2016. The balance in the interest payable account at the start of the year related to accrued interest on the note at the end of 2016. The company made semi-annual interest payments on the note on February 28th and August 31", and paid off the note on August 31¹. b. On September 1, Hogs borrowed $4,000 on a new note with an interest rate of 5% that requires semi-annual interest payments on February 28th and August 31, 4. Operations a. The company prepaid $3,600 on March 1st for twelve months of building rent. The balance in the prepaid rent account at the beginning of the year related to rent for the first two months of 2017 that was prepaid in 2016. b. Cash paid out for wages during 2017 totaled $12,200, of which $170 related to 2016 wages paid during 2017. Records indicate that wages for the last week of December amounted to $300 and would be paid out during the first week in January 2018. The company paid $900 for its 2016 income taxes on March 31, 2017. c. d. Other expenses paid in cash totaled $2,150. 5. Common Stock a. New common stock of $10,000 was issued on June 1, 2017. b. Dividends of $3,600 were declared and paid on November 1, 2017. B. Closing Entries: Record any necessary closing entries related to the following in the general journal: 6. Inventory a. Hogs uses the periodic inventory system, and a LIFO cost-flow assumption. The company began 2017 with 500 hats in inventory with a cost of $8 each. A physical count indicated that 530 hats were remaining in inventory at December 31st. The purchases referenced in 1e were for the following quantities and costs January 15th March 23rd July 2nd October 31st 405 hats @ $10 310 hats @ $12 525 hats @ $14 430 hats @ $15 HINT: You do not need to make additional entries related to these purchases, however, you will need the information on quantities and costs in order to prepare the closing entries related to inventory. 7. Income Taxes a. The company is taxed at a rate of 30% on Income Before Income Taxes, and 2017 income taxes will be paid in March of 2018. HINT: Use the Income Summary t-account to close temporary accounts and calculate Income Before Income Taxes and Income Tax Expense. 8. Income Summary a. Prepare any additional required closing entries related to temporary accounts using the Income Summary account. C. Financial Statement Preparation: Post the transactions from the general journal into the t-accounts (permanent accounts list start-of- year balances in italics). Then prepare Hogs' Financial Statements for 2017 using the Excel template. Hogs Hats is a retail company that buys hats from a manufacturer and sells them in its store. You have been assigned to help Hogs compile its financial statements for the year ended December 31, 2017. Using the Excel templates provided on Blackboard, which contain all account names along with beginning-of-year balances for permanent accounts in italics, complete A through C below. You may complete the handout electronically or on paper, but you must turn in a physical copy of the handout. Pay careful attention to the underlined instructions and hints. A. Transactions and Adjusting Entries: The information provided below pertains to the fiscal year 2017. Record all transactions in the General Journal. Make sure that you also include any adjusting entries that are required at the end of the accounting cycle on December 31, 2017. Label each entry according to its item number and letter below, and include dates where provided. Some items require multiple entries (e.g., item 3a): 1. Sales, Accounts Receivable, and Purchases (no date required for these entries) a. The company sold 1,640 hats on account for $30 each. b. Cash collections on accounts receivable during the year totaled $42,000. c. Hogs identified $350 of receivables as uncollectible and wrote them off. d. Hogs uses the percentage-of-receivables approach to estimating bad debts, and estimates that 12% of ending receivables are uncollectible at December 31, 2017. Hogs bought $21,570 of inventory on account and uses a periodic inventory system. f. The company made cash payments of $21,500 to suppliers for accounts payable. e. 2. Equipment a. Hogs uses straight-line depreciation for all of the following equipment: ID# 1256 1876 4299 Historical Cost ($) Useful Life (yrs.) Salvage Value ($) 12,000 10 1,200 1,700 5 300 22,000 5 1,000 b. On July 1, the equipment with ID# 1876 was sold for $620. On December 31, new equipment was purchased for $3,000. c. Date Purchased Jan. 1, 2011 Jan. 1, 2013 Jan. 1, 2016 3. Debt a. At the beginning of the year, the company had a $2,400 outstanding note payable with an 8% annual interest rate that was issued on September 1, 2016. The balance in the interest payable account at the start of the year related to accrued interest on the note at the end of 2016. The company made semi-annual interest payments on the note on February 28th and August 31", and paid off the note on August 31¹. b. On September 1, Hogs borrowed $4,000 on a new note with an interest rate of 5% that requires semi-annual interest payments on February 28th and August 31, 4. Operations a. The company prepaid $3,600 on March 1st for twelve months of building rent. The balance in the prepaid rent account at the beginning of the year related to rent for the first two months of 2017 that was prepaid in 2016. b. Cash paid out for wages during 2017 totaled $12,200, of which $170 related to 2016 wages paid during 2017. Records indicate that wages for the last week of December amounted to $300 and would be paid out during the first week in January 2018. The company paid $900 for its 2016 income taxes on March 31, 2017. c. d. Other expenses paid in cash totaled $2,150. 5. Common Stock a. New common stock of $10,000 was issued on June 1, 2017. b. Dividends of $3,600 were declared and paid on November 1, 2017. B. Closing Entries: Record any necessary closing entries related to the following in the general journal: 6. Inventory a. Hogs uses the periodic inventory system, and a LIFO cost-flow assumption. The company began 2017 with 500 hats in inventory with a cost of $8 each. A physical count indicated that 530 hats were remaining in inventory at December 31st. The purchases referenced in 1e were for the following quantities and costs January 15th March 23rd July 2nd October 31st 405 hats @ $10 310 hats @ $12 525 hats @ $14 430 hats @ $15 HINT: You do not need to make additional entries related to these purchases, however, you will need the information on quantities and costs in order to prepare the closing entries related to inventory. 7. Income Taxes a. The company is taxed at a rate of 30% on Income Before Income Taxes, and 2017 income taxes will be paid in March of 2018. HINT: Use the Income Summary t-account to close temporary accounts and calculate Income Before Income Taxes and Income Tax Expense. 8. Income Summary a. Prepare any additional required closing entries related to temporary accounts using the Income Summary account. C. Financial Statement Preparation: Post the transactions from the general journal into the t-accounts (permanent accounts list start-of- year balances in italics). Then prepare Hogs' Financial Statements for 2017 using the Excel template.
Expert Answer:
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
Students also viewed these accounting questions
-
The Magna International Inc. financial statements for the year ended December 31, 2011, can be found on SEDAR (www.sedar.com). Instructions (a) The company has many different types of shares...
-
The auditor is auditing financial statements for the year ended December 31, 2011, and is completing the audit in early March 2012. The following situations have come to the auditor's attention: 1....
-
You have been assigned to determine whether more people prefer Coke or Pepsi. Assume that roughly half the population prefers Coke and half prefers Pepsi. How large a sample do you need to take to...
-
ABC Insurance Company has issued a commercial package policy to the Henderson Company. ABC recently discovered that company executives misrepresented important information about the business to...
-
In January, gross earnings in Centaur Company were $60,000. All earnings are subject to 8% FICA taxes. Federal income tax withheld was $14,000, and state income tax withheld was $1,600. (a) Calculate...
-
1V( |+ 1 ww 1 ww 1 ww + 2V3V ww RL
-
In the preparation of an analytic flowchart, which of the following symbols should be used when flowlines are broken due to a page limitation? (a) terminal symbol (b) connector symbol (c) manual...
-
A small radiant heat source of area A1 = 2 x 10-4 m2 emits diffusely with an intensity I1 = 1000 W/m2 ? sr. A second small area, A2 = 1 x 10-4 m2, is located as shown in the sketch. (a) Determine the...
-
The table below is the balance sheet for the Senators Bank. The target reserve ratio is 6%. Assets (1) (2) Reserves $40,000 $ $ Liabilities / Equity Demand deposits (1) $390,000 $ Loans 300,000...
-
Light-It-Up Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Light-It-Up Company prepared the following end-of-period spreadsheet at August 31, 20Y5,...
-
Alandra tosses a coin 3 times. The table shows all possible combinations of heads and tails for the 3 tosses. Use the drop-down menu below to complete the statement about probability. Math item stem...
-
What are some alternatives to T-mobiles merger and acquisition of Sprint? What if T-Mobile did nothing or decided to acquire another company? How would that affect it financially?
-
The following pipe is made of steel. It has a hollow cross section with inner radius of 20 mm, and outer radius of 30 mm. Using Castigliano's theorem, a) Find the deflection of point A in x...
-
Group Project & Presentation Financial Analysis of a Corporation You are a team of financial analysts at a small, but reputable consulting firm in Gastown, Vancouver. You have been engaged to provide...
-
In a clinical trial of a drug intended to help people stop smoking, 132 subjects were treated with the drug for 13 weeks, and 19 subjects experienced abdominal pain. If someone claims that more than...
-
What do we call a transitional device in which one shot is gradually superimposed over another and begins to replace it?
-
Why would a short seller accuse Fisker of having liquidity issues? How would legal restrictions prevent Fisker from accessing cash? Why would automakers need access to large amounts of cash? Given...
-
Evaluate the function at the given value(s) of the independent variable. Simplify the results. (x) = cos 2x (a) (0) (b) (- /4) (c) (/3) (d) ()
-
As of December 31, 2014, Colt Corporation has a loss carryforward of $180,000 available to offset future taxable income. At December 31, 2014, the company believes that realization of the tax benefit...
-
Glade Company leases computer equipment to customers under direct financing leases. The equipment has no residual value at the end of the lease term, and the leases do not contain bargain purchase...
-
In August 2003, Krispy Kremes common stock was trading at $44 per share. Several analysts and investors believed at the time that its shares were worth considerably less. They appear to have been...
-
In monopoly, the market demand curve may be regarded as the demand curve for the _________ because it is the market for that particular product.
-
The monopolist, like the perfect competitor, will maximize profits at that output where _________ = MC.
-
A barrier to entry is control over an important _________, such as Alcoas control over bauxite in the 1940s and De Beerss control over much of the worlds output of diamonds.
Study smarter with the SolutionInn App