THE COMPANY: Aylmer Industries Inc. (Aylmer) has been in business since 2017. Since Aylmer is a publicly traded company, it follows IFRS. Aylmer posted accounting transactions throughout the year. The Excel unadjusted trial balance was prepared from the recorded transactions. Aylmer's fiscal year-end is December 31st. As a year-end review, management of Aylmer discovered that the following items have NOT been recorded and are NOT reflected in the unadjusted trial balance provided at December 31, 2021 For any journal entries, use December 31 as the date for the entries. The accompanying Excel spreadsheet has important information and requirements. Please review the entire file carefully. The unadjusted trial balance at December 31, 2021 and final trial balance at December 31, 2020 are provided in the Excel file for comparison purposes. Please see the Excel tab labelled "Trial Balance". Use this Excel file and this tab to post journal entries as required, and to ensure that the worksheet remains in balance. You should use the worksheet to provide the ending balances needed to prepare the financial statements at December 31, 2021. REQUIRED (please read the entire document before starting the project) Analyze and review the following items (a - t) and determine the appropriate journal entry, if any, required. Record the appropriate journal entry in the Excel tab labelled "journal entries". In the explanation line - it may be helpful to reference the transaction item. Use the various tabs in the Excel file to perform calculations and use the tabs as support for your journal entries, financial statement preparation, and notes to the financial statements. Read the transactions below very carefully and the requirements that follow. This project accounts for 20% of your final grade and is due on Sunday April 9, 2023 @11:59 pm. You should complete this project on your own but please ask questions as you progress through the project. If there is time, virtual classes may be allocated to questions related to the project. NOTE - before you begin the Excel work, enter your student ID number on the Excel tab "Students First Step" as indicated.add rows as needed Aylmer Industries Inc. Income Statement For the Year Ended December 31, 2021 Aylmer Industries Inc. Statement of Retained Earnings For the Year Ended December 31, 2021 Aylmer Industries Inc. Statement of Financial Position At December 31, 2021REQUIRED: 1. See the Excel spreadsheet "ACCT 3050 Project F22" - all information should be recorded using the Excel template. Update the tabs in Excel as needed - SHOW ALL WORK and CALCULATIONS. The Excel tabs are protected, use the GREEN area of each tab for your calculations and notes. Protection is required to maintain integrity of the spreadsheet. 2. Be sure to enter your student ID number in the "STUDENTS - FIRST STEP" tab. Enter as a number (no "quotation marks"). If your student ID number is 00123; just enter 123. 3. Prepare journal entries for the above transactions. 4. Post transactions to the trial balance worksheet and complete the worksheet. 5. Prepare for 2019 and 2020: 1. Classified Statement of Financial Position (similar accounts can be combined). 2. Single-step Income Statement (include EPS and Diluted EPS). 3. Statement of Retained Earnings (even though this is an IFRS company- no need to complete the Statement of Changes in Equity) 4. Notes to the Financial Statements (for the liabilities and equity section of the Statement of Financial Position ONLY - see list on tab "Notes to the Financials"). a. Notes should include (for 2021 only): i. Reconciliation schedules or detailed schedules for liabilities and equity. ii. Description of the account and relevant policies. iii. Other information you feel should be disclosed. OTHER IMPORTANT INFORMATION 1. Round financial statements to the nearest dollar. 2. Show ALL calculations The project should be completed individually. Please leave your completed project in the FOL submission folder - labelled - PROJECT There are 115 potential points to this project and accounts for 20% of your final grade.\fIncluded in this file are the following tabs: Required Points Grade 1 Trial Balance Complete the worksheet 10.00 0.00% 2 Financial Statements Prepare the financial statements 25.00 0.00% 3 Notes to the Financial Statements Prepare the notes to the financial statements 15.00 0.00% 4 Journal Entries Prepare journal entries required 19.00 0.00% 5 Unearned Revenue Calculate the amount of revenue earned and make the entry 3.00 0.00% 6 Vacation Pay Calculate the amount of vacation pay expense for 2020 2.00 0.00% 7 Bonus Calculate the amount of bonus expense for 2020 1.00 0.00% 8 Warranty Determine amount of warranty revenue to record 3.00 0.00% 9 Defined Contribution Plan Determine the proper pension expense 2.00 0.00% 10 Defined Benefit Plan Determine the proper pension expense 5.00 0.00% 11 Lease Liability Determine the amount of the lease and amortization schedul 4.00 0.00% 12 Fixed Assets Determine the depreciation for tangible assets 5.00 0.00% 13 Intangible Assets Determine the amortization for intangible assets 1.00 0.00% 14 Bonds Payable - Series 1 Create the amortization schedule - determine gain/loss 4.00 0.00% 15 Bonds Payable - Series 2 Create the amortization schedule 3.00 0.00% 16 Bonds Payable - Series 3 Create the amortization schedule 3.00 0.00% 17 Deferred Taxes Prepare the schedules for deferred taxes 5.00 0.00% 18 Earnings per Share Prepare the weighted average number of common shares 5.00 0.00% TOTAL 115.00 0.00%Accumulated Depreciation Accumulated Asset Acquisition Useful Depreciation Expense Depreciation Adjustments Category.I Number Description Date Life [Yrs] Cost to 12231220 2021 to 12231221 to 12231221 N512 .and 1 acre - 11th Line 05231215 525,000.00 401 Main Street 05201215 355,000.00 .5 acre 402 Main Street 05201215 225,152.50 1,105,152.50 3uilding 2015-01 401 Main Street 05201215 40 1,545,532.40 254,450.50 2015-05 410 Main Street 0221215 40 150,000.00 53,325.00 2015-05 405 Main Street 0521215 40 545,000.00 353,525.00 2,940,551.40 1,211,550.50 Equipment 2015-02 2013 Ford F150 Truck 02201215 5 12,500.00 10,055.44 2015-03 2014 Dodge Ram Truck 03231215 5 15,500.00 10,533.33 2015-04 Toro lawn mower 05230215 4 2,300.00 1,432.50 2015-05 2002John Deere Excavator 05201215 12 25,000.00 4,551.11 2015-05 2005 Cat Backhoe 05201215 12 12,300.00 2,351.52 2015-02 2004 Case Tractor 10201215 12 5,500.00 1,532.50 2015-05 3 wagons 10201215 4 3,000.00 1,552.50 2015-10 2015 ChemI Truck 03201215 5 35,500.00 10,522.25 2015-11 2010 Toyota Tundra 05231215 5 15,250.00 4,542.52 2015-12 2012 Kenworth 02231215 5 225,500.00 53,243.05 2015-13 2015 Loader 05201215 12 15,155.00 2,144.45 2015-14 1555 Grader 12201215 12 2,200.00 550.00 2015-15 Flat-bed Trailer 12201215 12 12,300.00 1,110.42 355,015.00 105,051.20 Right of Use Asset Leased Machine W TOTAL $4,445,015.00 $1,311,112.50 5 . 5 . 5 _ 5 Trial Balance Unadjusted Trial Balance Adjuster At December 31, 2020 At December 31, 2021 Adjustments Trial Balance Income Statement Balance Sheet Debi Credit Debi Credit Debi Credit Debi Credit Debi Credit Debi Credit Cash & Equivalents 64,133 1,313,634 Accounts Receivable - Trade 1,178,297 1,253,760 Stock Subscription Receivable 10,000 Interest Receivable Allowance for Doubtful Accounts 63,254 52,600 Inventory 163,500 218,900 Prepaid Insurance 95,000 100,000 Land 1,109,163 1,109,163 Building 2,940,837 2,940,837 Building - Accumulated Depreciation 1,211,681 1,211,681 Equipment 389,105 398,015 Equipment - Accumulated Depreciation 106,092 106,092 Right of Use Asset Right of Use Asset - Accumulated Depreciation Trademark (Intangible Asset 800,000 800,000 Trademark (Intangible) - Accumulated Amortization 80,000 80,000 Patent (Intangible Asset 100,000 100,000 Patent (Intangible) - Accumulated Amortization 25,000 25,000 Goodwill 975,000 975,000 Accounts Payable 298,855 390,477 HST Payable 59,100 72,010 Wages Payable 108,900 99,500 Vacation Pay Payable 42,350 Bonus Payable 38,350 Dividends Payable - Preferred Dividends Payable - Common Interest Payable Interest Payable - Bonds Unearned Sales Revenue 236,900 408,200 Unearned Warranty Revenue 448,325 867,025 Income Tax Payable 158,900 Deferred Tax Liability Litigation Liability Pension Liability (Defined Contribution) 21,500 Net Defined Pension Asset/Liability (Defined Benefit) 9,100 9,100 Notes Payable 275,000 ease LiabilityItem Trademark Patent Date Developed 1f1f2020 1f1f2020 Useful Cost Life 300.000 10 Yrs 100.000 4w: 400.000 Accumulated Amortization to 12f31f20 30.000 25.000 55.000 Accumulated Carrying Amortization Amortization Value 2021 to 1331.321 \f\f\f\fBonds Payable - Series 1 467,744 467,744 Bonds Payable - Series 2 Bonds Payable - Series 3 Bank Loan 2,100,000 Preferred Shares 500,000 500,000 Common Stock 1,000,000 1,500,000 Common Stock Subscribed 20,000 Retained Earnings 363,511 1,228,985 Contributed Surplus - Conversion Rights Contributed Surplus - Stock Options Sales Revenue 3,798,600 4,301,500 Warranty Revenue 228,850 Cost of Goods Sold 1,326,706 1,515,900 Equipment Rental (other expenses) 105,000 120,000 Equipment Repairs (other expenses) 96,400 117,216 Wage Expense 659,000 715,600 Vacation Pay Expense 42,350 Bonus Expense 98,350 Compensation Expense Payroll Tax Expense 82,375 85,630 Pension Expense (Defined Contribution & Benef 59,452 Interest Expense 87,364 Utilities 42,923 53,615 Income tax expense 158,900 Deferred Tax Expense Insurance Expense 100,000 120,000 Bad Debt Expense 10.560 26,985 Commission Expense Advertising Expense 5,069 6,491 Administration Expenses 70,938 84,168 Litigation Expense Loss on Redemption of Bonds Amortization Expense (other expense) 55,000 Depreciation Expense (other expenses) 161,590a) Calculate taxable income for 2021: Accounting Income 420,000 ASSUME THIS IS CORRECT! bj Calculate the deferred tax asset or liability at Dec 31, 2020 BV deductible balance tax asset (taxable) tax DT Asset Account base (liability) differencerate (DT Liab) cj Prepare any adjusting entries that would be required related to income tax for 2020.TOTALS $11,377,012 $ 11,377,012 $ 11,564,914 $11,564,914 | $ S S S S S S S Net Income (Loss) 0 TOTAL S S S Revenue 4,027,450 Expenses 3,161,977 Net Income 865,473 0 0Show all your calculations and work Dates Shares Fraction Weighted Event Outstanding Outstanding Restatement of Year SharesTRANMCTIGM NGTHCLUDED IN THE UNADJUSTED TREE WEE at DECEMER 31' 2021': f a. Unearned Revenue Aylmer has some customers that pay for services in advance of work started. At December 3 l, 2021, the accountant reviewed unearned revenue to see hov.r much revenue had been earned. In the Excel spreadsheet, see the tab labelled \"Unearned Revenue" for details relating to unearned revenue and to make any calculations for an adjusting journal entry. b- Vacation Pav Aylmer has 11 fulltime employees. Each employee earns vacation pay at a ditferent rate. 1Vacation pay: for days earned= may be taken aer January 15\"1 of the year following the year in which the days are earned (in other words: vacation days earned in 2021 must be used in 2022). Aylmer has chosen to accrue the cost of vacation at rates of pay in effect during the period in which they are earned, at 2020 rates of pay. The expense for 2021 should be based on 2021 wages and no exse or liability for 2021 has been recorded. There is NO carryover of vacation pay 'om 2020 to 2021 any liability from 2020 was used in 2021. In order to calculate the vacation pay, to be expensed in 2021, salaried employees are paid weekly and hourly employees are normally paid 40 hours per week. In the Excel spreadsheet, see the tab labelled \"Vacation Pay" to make any calculations for an adjusting entry- c. Bonus Accrual Aylmer has a bonus package for several employees. Bonus\" are paid in February of the following year (February 2022} based on a number of criteria. Some employees earned a bonus for 2021 results. No gpense or liability: for 2021 has been recorded. In the Excel spreadsheet, see the tab labelled \"Bonus Accrual" to make any calculations for an adjusting entry- Notes to the Financial Statements Add rows as needed 1 Provisions 2 Bond Liability 3 Income Taxes 4 Pension Liability 5 Lease Liability 6 Earnings Per Share 7 Errors and Other Information 8 Subsequent Eventsd. Warranties Aylmer uses the service-type warranty (revenue-based approach) to account for any necessary adjustments to warranty related items. Entries for 2019 and 2020 have been made in the appropriate years. No adjusting entry for total unearned warranties earned during 2021 has been made. In the Excel spreadsheet, see the tab labelled "Warranties" to make any calculations for an adjusting journal entry. 2 ACCT 3050- Intermediate Accounting 2: Winter 2023 PROJECT e. Pension Plans Aylmer has two pension plans for employees: Defined Contribution Plan: For this plan, payments are made to the plan in January for the prior year. Aylmer contributes to this plan, on behalf of the qualified employees. The employees do not contribute. A payment will be made in January 2022 for all of the 2021 defined contribution pension related expenses. Remittances are only required to be made annually as is the corresponding accrual. The entry for accruing the pension expense for 2021 is to be made in December 2021. In the Excel spreadsheet, see the tab labelled "Defined Contribution Plan" for calculations. Defined Benefit Plan: For this plan, NOTE - for 2021, the payment and expense have not been recorded on the trial balance. In the Excel spreadsheet, see the tab labelled "Defined Benefit Plan" for calculations and requirements for reconciling the pension amounts.\ff. Notes Payable This is a short-term note. The company borrowed money from JRT Investments on October 31, 2021 for 3 months. The principal, along with interest is to be repaid on January 31, 2022. The interest rate is 3.60%. Note - there is no tab in the excel file for this item. Use the journal entry tab to make any necessary calculations. g. Leased Asset On January 1, 2021, Aylmer decided to lease a machine. The accountant at the time did not know how to record this asset (the accountant did not take Intermediate Accounting 2 at Fanshawe!). NO TRANSACTIONS relating to leases were recorded. The following information pertains to the leased machine: The lease term is 6 years and the economic life of the asset is 7 years. The annual payment is $22,740. This payment includes annual executory costs (insurance) of $890. The remainder is the lease payment. Interest rate associated with this lease is 5.75%. In the Excel spreadsheet, see the tab labelled "Leased Liability" to make the appropriate calculations and requirements for reconciling the lease information. Then prepare all the appropriate entries (including setup up the asset, the liability and any payments and interest). h. Record Depreciation on Tangible Assets Depreciation of the tangible (fixed) assets is calculated on an annual basis using the straight-line method. Other than the leased asset in "g" there were NO purchases or sales of assets during the year. In the Excel spreadsheet, see the tab labelled "Fixed Assets" to perform depreciation calculations. 3i. Amortization of Intangible Assets Amortization of the intangible assets is calculated on an annual basis using the straightline method. In the Excel spreadsheet, see the tab labelled \"Intangible Assets\" to perform amortization calculations. j. Bonds Payable Series 1 On January 1, 2.015, Aylmer issued $400,000 12% 10year bonds. Interest is paid on an annual basis. The bonds were issued for investors to have a yield of 2%. Because of the high interest rate, Aylmer decided to call the bends on December 31, 2021 at 115.. No entries were made in 2021 in res ect to this bond interest is owed for 2021 since the bonds were outstandintlr for 202 l"_. In the Excel spreadsheet, see the tab labelled \"Bonds Payable Series I\" to determine the carrying value, create the amortization schedule and perform any additional calculations. NOTE the amount on the trial balance (Bonds Payable Series 1) is your check number for the amortization schedule at. December 31, 2020 BEFOR.E ADJUSTMENTS and 2.02.1 Interest payment. Ir. Bonds Payable Series 2 Dn January 1, 2.02.1, the companyr issued $2,300,000, 5% bonds with a 10year maturity. The bonds were issued to investors that require an effective interest rate of 5.50%. The accountant did NOT record the issuance of these bonds. Interest is paid annually and the accountant did NOT record the interest. payment. transaction. The e'ectiye interest method is used to amortize any premium or discount. NOTE round calculations to nearest dollar. In the Excel spreadsheet, see the tab labelled "Bonds Payable Series 2 to make any calculations, including an amortization schedule, to support journal entries. Name Title Wage Entitled Vacation Weekly Wage Accrual Dollar Amount Brian Dennis President $ 163,500.00 annually 3 weeks Jane Ferris Controller $ 125,900.00 annually 5 weeks Lin Wang Sales $ 75,000.00 annually 3 weeks Hannah Carter Sales $ 75,000.00 annually 4 weeks Jessica Lampman Supervisor $ 73,200.00 annually 4 weeks Larry Jones Supervisor $ 73,200.00 annually 3 weeks Amy Fanshawe-Grad Accountant $ 56,500.00 annually 4 weeks Max Vance Labourer 22.00 hourly 3 weeks John Demilo Labourer 22.00 hourly 2 weeks Kevin St Clair Labourer 22.00 hourly 3 weeks Allison Brubaker Labourer S 22.00 hourly 3 weeks1. Bonds Pable Series 3 On December 29, 2021, the company issued $150,000 4% 5year bonds for 110. The bonds were issued to DESI a 3% yield. The excess of the amount received compared to the present value was due to the conversion feature. Interest on these bonds is paid annually. NOTE ignore interest accrual for the short time in 2021. Each $100 bond can be converted into 100 common shares. Interest is paid annually. This transaction was NOT recorded in the trial balance. In the Excel spreadsheet, see the tab labelled \"Bonds Payable Series 3\" to malre any calculations, including an amortization schedule, to support journal entries. ACCT 3050 Intermediate Accounting 2: 'IMnter 2023 PROJECT In. Stock Options On January 1, 2021, the shareholders of Aylmer approved a plan that grants options to the company's executives to purchase 10,000 of the company=s common shares each The options are granted on January 1, 2021 and may be exercised at any time after December 31, 2023- The exercise price per share is $32. Based on an options pricing model, the total compensation expense will be $155,000- At December 31, 2021, the market price is $13 per share. Based on criteria, the following employees earned a bonus Name Title Wage Bonus Earned Accrual (as a percent of annual wage) Brian Dennis President $ 163,500.00 annually 40% Jane Ferris Controller $ 125,900.00 annually 25% Jessica Lampman Supervisor $ 73,200.00 annually 15% Larry Jones Supervisor $ 73,200.00 annually 15% Amy Fanshawe-Grad Accountant $ 56,500.00 annually 10%n. Provisions (Contingencies) During 2021, Aylmer was involved in two separate lawsuits: In 2021, a customer who visited the Aylmer corporate office slipped and fell. A lawsuit was filed and a court appearance in-front of a judge occurred. Aylmer's attorney believes that it is probable and very likely that Aylmer will be liable for damages in the amount of $600,000 as a result of this suit. In 2021, a separate lawsuit was brought against Aylmer. Aylmer was sued for patent infringement by Kingsmill Corp. Aylmer's attorney believes that it is not probable that Aylmer will be liable for $502,000 of damages claimed by Kingsmill. NOTE - There is not a spreadsheet in the Excel file. You should determine if an entry should be made or not and make the required entry(ies) as necessary in the Excel tab labelled "Journal Entries". o. Shares Sold - Subscription Basis On January 1, 2021, Aylmer offered to sell some shares on a subscription basis. The offer was for fifty individuals to purchase 20 common shares each at $20 per share. 50% of the amount was to be paid on June 30, 2021. That transaction was recorded properly in the accounting records of Aylmer. The remaining amount will be received on June 30, 2022. NOTE - There is not a spreadsheet in the Excel file. Review the trial balance. You should determine if an entry should be made or not and make the required entry(ies) as necessary in the Excel tab labelled "Journal Entries"Sales relating to warranties Unearned Year Sales Warranty Comments 2019 3,225,600 366,500 It is estimated that the 3-year warranty will be earned 25% in the first year, 35% in the second year and 40% in the third year 2020 3,798,600 402,300 It is estimated that the 3-year warranty will be earned 25% in the first year, 35% in the second year and 40% in the third year 2021 4,301,500 418,700 It is estimated that the 3-year warranty will be earned 25% in the first year, 35% in the second year and 40% in the third year Use the space below to make any calculationsp- Deferred Taxes Aylmer has a corporate tax rate of 26%. There are two differences that have been identied: Assume that CCA (Capital Cost Allowance] for tax purposes was $20,000 more that straightline depreciation calculated. Included in administrative expenses are golf club dues that total 310,2 50. There was no deferred tax liability or asset in 2020 or prior years. In the Excel spreadsheet, see the tab Labelled \"Deferred Taxes" to make any calculations, including an amortization schedule, to support journal entries. Note that there are assumptions in that tab follow the instructions in the tab carefuy. q. Cagital Shares The company has 100,000 preferred shares issued and outstanding for the entire year. The preferred shares are noncumulative and nonparticipating. There is a conversion feature where each preferred share can be converted into 20 common shares. On January 1, 2021; the company had 600,000 common shares outstanding. On April 1, the company issued 200,000 common shares. There was a 2 for 1 stock split on June 1. These transactions have been accounted for and are included on the trial balance. The company can issue an unlimited number of common shares. In the Excel spreadsheet, see the tab \"Diluted EPS Calculation\" to show your work relating to, weighted average number or shares and Earnings per Share and to make any dividend calculations. Only calculate EPS andDiluted EPS for 2021. There was no change in shares during 2020. r. Dividends On December 31, 2021 the company declared a dividend of $0.23 per share for common shares outstanding and $1.25 per share on preferred shares- The dividends will be paid in January 2022. There were no dividends declared in 2020. Employees participating in the Defined-Contribution Plan: % of salary contributed Annual Salaryon behalf of employees Expense Brian Dennis President $163,500.00 9% Jane Ferris Controller $125,900.00 7% Lin Wang Sales $ 75,000.00 7% Hannah Carter Sales $ 75,000.00 4% Jessica Lampman Supervisor $ 73,200.00 5% Larry Jones Supervisor $ 73,200.00 6% Amy Fanshawe-GracAccountant $ 56,500.00 5% Note - employees do not contribute, there is no deduction from their pay cheques.s. Error and Subsequent event At the end of 2021, the new accountant (a Fanshawe graduate) discovered that in January 2020, the company accrued sales wages of $86,800 in excess of the correct amount. On February 1, 2022, the CEO of the company decided to resign. On February, 10, 2022, there was a fire at the building at 401 Main Street. The building and it's contents were destroyed. Aylmer is fully covered by insurance and the fire was determined to be accidental. Based on the above information, prepare any required journal entry(ies). Include tax implications as necessary. t. Closing Entries Closing entries are NOT required for this project.For the defined benefit plan - assume the following: Past service cost (end of year adjustment) 36,900 Fair Value of Plan assets, beg of year 106,500 DBO, beginning of year 115,600 Current Service cost 27,400 Interest Rate on DBO and Plan Assets 8% Actual Earnings on Plan Assets 8,520 Employer Contribution for the year 12,850 Benefits Paid to Retirees 15,600 Required: a) calculate the plan assets at the end of the year b) calculate the DBO at the end of the year c) calculate the funded status at the end of the year d) calculate the pension expense for the year. NOTE - prepare the pension worksheet for grading purposes. Pension Worksheet