On January 1, 2022, Mr. Pane forms Pane in the Glass Window Company with a fiscal...

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On January 1, 2022, Mr. Pane forms Pane in the Glass Window Company with a fiscal year end of December 31, 2022. On that same day, Pane in the Glass issued 1,500 shares of $4 par common stock for $90 per share. The same day, the company purchased a delivery truck for $60000 by signing a 5-year, 6% annual interest rate note payable with a face value of $60000. Interest is payable on the last day of every calendar year. The truck has an estimated useful life of 10 years and no salvage value. On January 2 the company purchased 520 windows from the manufacturer for $215 each and paid in cash. On January 3rd the window manufacturer contacted Pane in the Glass and offered to sell an additional 65 windows for $180 each. Mr. Pane accepted the offer and paid cash for the additional windows. During 2022, the company sold 320 windows on account for $360 each. The company uses LIFO inventory valuation and offers a 2-year warranty on all windows sold. It expects that 10% of the windows will have a problem and that on average each window would cost $90 to fix. The company records bad debt expense equal to 1% of credit sales. The company collects $92160 cash from the credit sales. The company also learns that Big Al, who purchased two of the windows, has declared bankruptcy and will not pay for his windows. Mr. Pane decides to write off the accounts receivable related to these two windows. On November 1, Lovers' Lanes Bowling Alley requests that 6 of their new windows be repaired. The repairs were covered under warranty and the repairs cost $75 for each window. On the December 31, 2022, Pane in the Glass accrues and pays cash for the interest on the note payable, and records depreciation expense using straight-line depreciation. On January 31, 2023, Pane in the Glass sold 100 windows on account for $380 each. Requirements 1) Prepare journal entries and adjusting entries 2) Post the journal entries to T accounts 3) Prepare the adjusted trial balance (does it balance?) 4) Prepare an Income Statement, Statement of Retained Earnings, Balance Sheet, and the operating section of the Statement of Cash Flows as of and for the year ended December 31, 2022 5) Use your completed financial statements to identify the values for each of the following items: Net Income, Gross Margin, Cash, Total Assets, Cash from Operations. Be sure to include answers to these questions on your group answer sheet. 6) Use the Warranty Analysis tab in your Excel template and answer the following questions on your group answer sheet. i. How does the current year's estimate for the warranty accrual compare to past estimates? ii. Based on the actual repairs that needed to be made, what is your assessment of the company's current year warranty accrual (i.e., did they accrue too much, too little, or just the right amount)? On January 1, 2022, Mr. Pane forms Pane in the Glass Window Company with a fiscal year end of December 31, 2022. On that same day, Pane in the Glass issued 1,500 shares of $4 par common stock for $90 per share. The same day, the company purchased a delivery truck for $60000 by signing a 5-year, 6% annual interest rate note payable with a face value of $60000. Interest is payable on the last day of every calendar year. The truck has an estimated useful life of 10 years and no salvage value. On January 2 the company purchased 520 windows from the manufacturer for $215 each and paid in cash. On January 3rd the window manufacturer contacted Pane in the Glass and offered to sell an additional 65 windows for $180 each. Mr. Pane accepted the offer and paid cash for the additional windows. During 2022, the company sold 320 windows on account for $360 each. The company uses LIFO inventory valuation and offers a 2-year warranty on all windows sold. It expects that 10% of the windows will have a problem and that on average each window would cost $90 to fix. The company records bad debt expense equal to 1% of credit sales. The company collects $92160 cash from the credit sales. The company also learns that Big Al, who purchased two of the windows, has declared bankruptcy and will not pay for his windows. Mr. Pane decides to write off the accounts receivable related to these two windows. On November 1, Lovers' Lanes Bowling Alley requests that 6 of their new windows be repaired. The repairs were covered under warranty and the repairs cost $75 for each window. On the December 31, 2022, Pane in the Glass accrues and pays cash for the interest on the note payable, and records depreciation expense using straight-line depreciation. On January 31, 2023, Pane in the Glass sold 100 windows on account for $380 each. Requirements 1) Prepare journal entries and adjusting entries 2) Post the journal entries to T accounts 3) Prepare the adjusted trial balance (does it balance?) 4) Prepare an Income Statement, Statement of Retained Earnings, Balance Sheet, and the operating section of the Statement of Cash Flows as of and for the year ended December 31, 2022 5) Use your completed financial statements to identify the values for each of the following items: Net Income, Gross Margin, Cash, Total Assets, Cash from Operations. Be sure to include answers to these questions on your group answer sheet. 6) Use the Warranty Analysis tab in your Excel template and answer the following questions on your group answer sheet. i. How does the current year's estimate for the warranty accrual compare to past estimates? ii. Based on the actual repairs that needed to be made, what is your assessment of the company's current year warranty accrual (i.e., did they accrue too much, too little, or just the right amount)?

Answer rating: 100% (QA)

Requirements 1 2 Journal Entries and TAccounts Journal Entries Date Account Debit Credit Description Jan 1 Cash 135000 Issued 1500 shares of common stock Jan 1 Common Stock 6000 Jan 1 Notes Payable 60... View the full answer