Review the list of transactions and record the entries to the accounting equation. For your inventory

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Question:

Review the list of transactions and record the entries to the accounting equation.
• For your inventory tracking tab and the events recorded to the accounting equation,
you can assume the following:
o The company uses FIFO as the method to record/track inventory
o Beginning inventory for Year 2 of operations is made up of 43,500 units
originally purchased at $8.00 per unit which equals the Beginning Inventory of $348,000.
2. You will use the completed accounting equation and templates provided to complete the following financial statements:
• Income Statement
• Classified Balance Sheet
• Cash Flow Statement
• Statement on Stockholder’s Equity
• Inventory Tracking Sheet (not one of the formal financial statements – available for
use in reviewing accounting equation entries.
3. Pro-Forma Flexible budget (using template provided) to include the following assumptions:
• Actual & pro-forma sales revenue at a projected sales price of $44.50 per unit at each volume level
• Actual & pro-forma cost of goods sold
o use Year 2 actual COGS for actual results column,
o use Year 2 average COGS (from inventory tracking sheet) for pro-forma columns at the varying volume levels.
• Actual & pro-forma operating expenses – assume all operating expenses are fixed costs. EX: sales & marketing; assume all employees are paid a salary.
o Hint: There is only one cost in the operating expenses that you’ll project for
Year 3 (it is still fixed but has a different calculation for year 3 than it does for
year 2), all other fixed costs will remain the same in all columns.
• Calculate pro-forma dollar amount of purchases for a desired ending inventory of $1,175,200, assuming:
o your ending inventory from the accounting equation year 2 is your beginning inventory for budgeting purposes
o Estimated COGS using actual units sold in Y2 * average COGS for Y2
• Calculate pro-forma Y3 breakeven in units and sales dollars using your flexible budget at actual units sold in Y2 & average COGS from Y2 (show your work on the excel file)

1. Completed accounting equation
2. Inventory Tracking Sheet (can submit excel or picture of hand written)
3. Complete set of financial statements
4. Y2 Actual Results & Y3 Flexible budget

Additional Information for Accounting Equation:
Beginning Common & Preferred stock is made up of the following:
o 40,000 shares of common stock were issued at a sales price of $25/share and with a par value of
$10 per share.
o 10,000 shares of $40 par, 3% cumulative preferred stock was issued at a sales price of
$50/share.

Please round all quiz ratio answers
to 3 decimal places and dollar amounts to the nearest dollar.
1. What is this company’s current ratio?
2. What is this company’s debt-to-equity ratio?
3. What is this company’s total Cost of Goods Sold for Year 2?
4. What is this company’s Gross Profit/Margin for Year 2?
5. What is the company’s Total Operating Expenses for Year 2?
6. What is this company’s Net Income (Loss) for Year 2?
7. What is this company’s Total Liabilities for Year 2?
8. What is this company’s Ending Common Stock & Additional Paid In Capital for Year 2?
9. What is this company’s Total Stockholder’s Equity for Year 2?
10. What is this company’s Net Cash Flow from Operating Activities for Year 2?
11. What is this company’s Net Cash Flow from Investing Activities for Year 2?
12. What is this company’s Net Cash Flow from Financing Activities for Year 2?
13. What amount was closed to Retained Earnings at the end of Year 2 as part of the closing
process? Review the closing process as needed.
14. You will receive one of the following questions as a video prompt for Question #6. You will not
know which question until you are taking the quiz, so please be prepared to answer any/all of
them. Using your Canvas Studio, upload a video that is 1 minute or less in length addressing one
of the following questions as indicated in your canvas quiz. With the time constraint in mind, be
sure to be concise in your communication of the relevant information, but fully answer the
question.
You could receive any of the following questions.
a. How would an error recording an event related to the sale of inventory impact the financial statements? More specifically, which financial statement(s) would be impacted? And why? Provide supporting arguments for your conclusion and an explanation for how you came to your conclusion.
b. If Year 1 sales = 109,000 units, following the trend in sales numbers, which, if any budget column do you think is the most informative and accurate for decision making purposes? Do you see any issues related to ending inventory and Year 1 or Year 2 sales numbers? Provide supporting arguments for your conclusion and an explanation for how you came to your conclusion.
c. What trends do you see in the sales numbers from year 1 and 2 when compared to the flexible budget? Do you see any issues related to ending inventory and Year 1 or Year 2 sales numbers? Be specific. Provide supporting arguments for your conclusion and an explanation for how you came to your conclusion.
d. What trends do you see in the inventory purchases numbers in year 2 that might impact the flexible budget? Do you see any issues related to ending inventory and Year 1 or
Year 2 sales numbers? Be specific. Provide supporting arguments for your conclusion and an explanation for how you came to your conclusion.
e. What types of decisions would an employee with your academic focus and/or experience make using this information? Give examples of both the decision and the information needed to feel confident in that decision.
f. Which financial statement would an employee with your academic focus and/or experience find the most informative and why? Give specific examples of how that information would be useful.
15. Upload your excel file to include your completed version of the following:
a. Completed Accounting Equation - use the blank accounting equation to correctly record the events of year 2.
b. Inventory Tracking Tab - use this tab to record the purchase and sale of inventory
c. Financial Statements
d. Budget Template
16. 5-Point Bonus – How do you plan to study for the final exam?
Survey of Accounting
READ CAREFULLY
Comprehensive Assignment – Financial Statements & Flexible Budget

Year 2 Transaction List (round all entries to the accounting equation to the nearest dollar):
1. Paid a $44,000 cash dividend previously declared for stockholders
2. Paid wages payable accrued in the previous month
3. Acquired $450,000 in January by signing a note payable to a local bank
4. Sold 15,000 shares of $10 par Common Stock for $220,000
5. Sold 4,000 shares of $40 par, 3% cumulative preferred stock for $240,000
6. Purchased a Truck and piece of Equipment for $138,000. The truck has a market value of
63,000 and the equipment has a market value of 77,000.
7. Purchased 45,000 Units of Inventory on Account for $8.15 per unit
8. Sold 65,000 units at $44.50 on Account
9. Record COGS for Sale of 65,000 units on Account (from previous event)
10. Collect $1,570,000 on Account
11. Paid $540,250 of Accounts Payable
12. Purchased 70,000 Units of Inventory on Account for $8.50 per unit
13. Sold 75,000 units at $44.50 on Account
14. Record COGS for Sales of 75,000 units on Account
15. Collect $2,474,500 on Account
16. Paid $438,500 of Accounts Payable
17. Collect $1,735,000 on Account
18. Paid $383,150 of Accounts Payable
19. Purchased 175,000 Units of Inventory on Account for $8.75 per unit
20. Paid Advertising & Marketing Expenses of $103,000
21. Paid Operating Expenses of $475,708
22. Paid Wages of $1,435,000
23. Record Wages Payable of $415,000
24. Made the yearly required payment on the note payable from event #3. The note carries a
8% interest rate and requires payments of $45,000 plus interest each December 31.
(Record Principle & Interest as two separate entries)
25. Record first year of depreciation expense on truck purchased in Year 2 with salvage value of
$14,000 & useful life of 5 Years
26. Record first year of depreciation expense on equipment purchased in Year 2 with salvage value of $36,000 & useful life of 7 Years
27. Record 2nd year of depreciation expense on building purchased in Year 1 with salvage value of $58,000 & useful life of 30 Years
28. Declared a $4.00 per share cash dividend for all shares outstanding for common stockholders
29. Declared a dividend on preferred shares outstanding