Description of this paper

2014 AC Speed Project-Accounting




Question;Can any one help me with this project that is due November 28, 2014?I need it all completed.;Company Background & Scenario;The AC Speed Company is a well-established, publicly-held;corporation, operating as a wholesaler in the auto parts industry. Specifically, AC Speed purchases auto parts;from manufacturers and sells them to large business customers. Most purchases and sales are on account, with;trade credit terms (specified below).;You?re a Davenport University student pursuing a bachelor?s;degree in business and employed at the AC Speed Company this semester as an;intern. You?ve worked in various;departments and on several projects so far, learning a lot about the company?s;business operations. Management seems;impressed with your enthusiasm and the quality of your work.;The company?s accountant has just been called away for a;family emergency and will likely be absent for a month or so. The General Manager asks you to take over the;accountant?s regular duties on an interim basis. You?re nervous about doing so, but are;confident that what you?ve learned in accounting class, plus your personal;problem-solving skills, will make this a successful experience. What a great learning opportunity, not to;mention an enhancement to your resume!;Project Overview & Instructions;A. Overview;a. Part 1 is a financial accounting activity that requires;you to record various business transactions during the month, close the;accounting records at the end of the month, and prepare the financial;statements. These tasks relate to the;steps in the accounting cycle that you learned in your first accounting;course.`;b. Part 2 is an activity that requires you to analyze the;company?s year-end financial statements to assist management in assessing the;company?s position and making decisions about its future direction.;c. This is an individual, not a team, project. While you may discuss this project with;others, you must prepare and submit your own work. Refer to the academic integrity statement in;the project workbook.;d. Before starting work, review the entire project: all instructions, business transactions;descriptions, workbook sections, check figures, due dates, and submission;requirements.;B. General Instructions;a. The parts of this project, including specific business;transactions and steps in the accounting cycle, must be completed in sequence. This is particularly important with business;transactions relating to purchases and sales of inventory.;b. You are encouraged to use your textbook?s table of;contents (front) or index (back) to locate helpful references.;c. These project instructions will not address every detail;of every task. If you have questions;ask your instructor.;d. Most of your work for this project will be accomplished;in Excel. A basic skill level in this;application is expected. That is, you;should be able to such things as move around in a workbook, enter data in;cells, use the sum function, compose basic formulas, and save your work.;e. If rounding is required, round to the nearest cent. For example, $96.835 would be entered as;$96.84.;f. Use the check figures provided to check your work as you;progress through the project.;Investigate any discrepancies and correct them as you go along.;g. Refer to the project rubric to determine how components;of the project will be assessed.;h. Appearance counts!;Pay attention to the format, to spelling, and to other details of;appearance. This reflects on;management?s perception of you as a professional.;C. Submission Requirements;a. Final submission of all parts of this project must be in;electronic (not paper) form. That is;you will submit your completed work via an assignment link in a Blackboard;course site or via an email attachment.;Follow your instructor?s directions.;b. Save backup copies of your work. If you have multiple versions of the project;clearly label them for your own reference and to ensure that you submit the;appropriate version to your instructor.;c. You must read the academic integrity statement in the;project workbook and enter your student ID number on the form to signify your;agreement with and adherence to that statement.;Final project submissions will not be accepted without this.;d. Due dates for the parts of this project will be provided;by your instructor in the course syllabus, in the Blackboard course site, or in;a designated handout. Be sure to enter;these on your personal calendar and plan your work on this project accordingly.;D. Credit Terms & Inventory Accounting;a. When AC Speed purchases merchandise from a supplier or;vendor on account, they receive credit terms of 2/15, net 30.;b. When AC Speed sells merchandise to a customer on account;they offer that customer credit terms of 2/20, net 30;c. AC Speed accounts for the specific types of merchandise;in their inventory with a set of subsidiary ledgers (inventory control;cards). The balances in these subsidiary;ledger records, in total, must equal the balance in the Merchandise Inventory;account in the general ledger.;d. AC Speed uses a perpetual inventory accounting system and;a last-in, first-out (LIFO) inventory costing method.;E. Financial Accounting Steps;a. Record each business transaction, in sequence by date, in;the appropriate special journal or the general journal. Also, immediately record any transaction;involving inventory, a customer, or a vendor in the appropriate subsidiary;ledger record.;b. At the end of the month, post each entry in the general;journal to the general ledger.;c. At the end of the month, total each column in each;special journal and post that total to the general ledger. EXCEPT for entries in the ?Other? columns;which must be posted individually to the general ledger.;d. When posting is completed, bring the balance in each;general ledger account up to date.;e. When posting is completed, bring the balance in each;subsidiary ledger account up to date.;f. At this point in the closing process, the balances of all;subsidiary ledger accounts would be totaled and that total compared to the;balance of the corresponding control account in the general ledger. That is, the total of inventory control cards;would be compared to the Merchandise Inventory balance, the customer subsidiary;ledger total to the Accounts Receivable balance, and the vendor subsidiary;ledger total to the Accounts Payable balance.;Any discrepancies would be investigated and corrected. Given the limited scope of this project;scenario, reconciliation between subsidiary ledgers and control accounts is not;possible.;g. List all general ledger account balances in the;unadjusted trial balance columns of the worksheet. Use the sum function in Excel to total the;debit and credit columns. These totals;should be equal.;h. Prepare the end-of-month adjusting entries. Record these entries in the general journal;and post them to the general ledger.;Also record the adjusting entries in the designated columns in the;worksheet and total the debit and credit columns. These totals should be equal.;i. Update general ledger account balances after posting;adjusting journal entries.;j. Complete the unadjusted trial balance columns on the worksheet. Use Excel formulas to carry balances from the;unadjusted trial balance columns, adjusting as necessary by entries in the;adjustments columns. Check your results;against the balances recorded in the general ledger.;k. Sort the dollars recorded in the adjusted trial balance;columns into either the income statement or the balance sheet columns. Total these columns. The entry of net income should cause the;debit and credit columns to equal one another.;l. Use the income statement information on the worksheet to;prepare a multi-step income statement in good form. Look at examples of this income statement;format in your textbook.;m. Prepare a statement of retained earnings in good;form. Look at examples of this;statement in your textbook. Remember;that net income from your just-completed income statement is a necessary;component of this statement.;n. Use the balance sheet information on the worksheet to;prepare a classified balance sheet.;Remember that the ending retained earnings balance from the;just-completed statement is a necessary component of the equity section of the;balance sheet.;o. Prepare the end-of-month closing entries. Record these entries in the general journal;and post them to the general ledger.;Update balances in the general ledger accounts.;p. List the general ledger accounts that have balances other;than zero on the post-closing trial balance.;The totals of the debit column and the credit column should be equal.;F. Part 2 of this project requires you to analyze the;company?s year-end financial statements to assist the management of AC Speed in;assessing the company?s financial position and making decisions about its;future direction.;a. Before beginning this part of the project, you will find;it helpful to review Chapter 17 on financial statement analysis. Page 707, a summary of ratios, will be;particularly useful.;b. Tabs in the project workbook provide trial balance data;for the current and two preceding years for AC Speed and a location to;calculation a selection of ratios. Use;the trial balance data and the formulas in Chapter 17 to compute the ratios;listed for each of the three years. YOU;MUST STRUCTURE YOUR RATIO CALCULATIONS AS FORMULAS AND LINKS TO APPROPRIATE;CELLS ON THE TRIAL BALANCE TAB. You will;lose points by simply typing the final ratio numbers or percentages.;c. After you calculate the ratios, consider whether there is;a trend over the three-year period. Also;compare the ratios you calculated for AC Speed with those listed as industry;averages. Review the information in;Chapter 17 to help you determine what the ratios are telling you about various;aspects of AC Speed?s business operations.;d. Use Word to prepare a memo (minimum 500 words) to AC;Speed?s general manager, addressing the three questions listed at the bottom of;the ratios tab. This should be formatted;as a business memo, not an APA paper. Be;sure to include a brief introduction and conclusion in the memo. Each question should be addressed in one or;two paragraphs in the body of the memo.;Remember that the general manager will expect details/facts/ratios to;support statements you may make about the status of the business. Your writing should be concise, clear, and;readable, with a fairly formal tone (since it?s addressed to AC Speed?s general;manager, who is likely to share it with other members of management). Your instructor will provide the due date;and submission requirements for this part of the project.;JUNE JOURNAL TRANSACTIONS;June 1 Signed a 3;year 7.1%, $210000 note payable with First Bank.;June 1 Purchased 3100;GPS units on credit from Navistar for $35.5 per unit.;June 1 Issued 5,000;shares of common stock for $10 per share (Refer to General ledger for;description of common stock).;June 1 Sold 1983 DVD;players on account to Toyota for $75 per unit, Invoice #5555;June 2 Sold 3400 GPS;units on account to Kia for $58 per unit, Invoice #5556.;June 2 Purchased;office supplies from Office Max on credit for $1150;June 2 Sold 975;docking stations for $66 per unit and 1925;GPS units for $82 per unit on account to Nissan, Invoice #5557.;June 3 The Board of;Directors declared a cash dividend of $5 per share for shareholders of record;on June 5th, payable on June 12th.;June 4 Received;payment from Toyota for May 11th sale.;June 4 Rented part of;the warehouse to a new tenant and received $5400 for three months rent starting;in June;June 5 Paid $2,100 to;Michigan Utility Co. for utilities bill that was recorded in May as an Account;Payable, Check #5278.;June 7 Received and;paid expense reports for travel and entertainment totaling $900, Check #5279.;June 8 Paid for;office supplies purchased on June 2nd, Check #5280.;June 11 Paid in full;for the June 1 purchase from Navistar, Check #5281.;June 11 Received a bill;from the law firm of Larry, Moe & Curly for;$5400, payable upon receipt, for bond consulting fees, Check;#5282.;June 12 Paid the;dividend that was declared on June 3, Check #5283.;June 13 Took advantage;of a special deal to purchase 3250 DVD;players on account from JVC for $48 per;unit.;June 13 Purchased 850;GPS units on credit from Magellan for $33 per unit.;June 15 Sold 2000 DVD;players on credit to Ford Motor Co. for;$89 per unit, Invoice 5558.;June 15 Check # 5284;was issued for payroll: $14500 for;salaried and $4750 for wages (wage expense);June 16 Purchased 1800 docking stations on credit from Samsung;for $42 per unit.;June 17 Issued a credit;to Kia for the return of 350 defective units from the June 2nd sale. These;units has a cost basis of $36 per unit.;June 17 Returned the;350 defective units received from Kia to Navistar.;June 18 Received payment in full from Toyota for the June 1st;sale.;June 20 While;inspecting the June 13th purchase, it was discovered that the GPS units were;programmed for South America instead of North America. AC Speed returned the;entire order to Magellan.;June 20 A bankruptcy;judge disallowed AC Speed's claim for $5,000 due from General Motors.;Management Decided to write off this accounts receivable.;June 22 Sold 1650 docking stations on credit to Kia for;64.5 per unit, Invoice #5559.;June 23 Paid $75000 of;the $162500 owed to JVC from May 25, Check #5285.;June 23 Received;payment from Ford Motor Co. for $175000 of the $300000 owed from May 5.;June 24 Purchased a;$100 international phone card for one of the sales representative's upcoming;European business trip, Check #5286.;June 25 Paid in full;for the purchase from JVC on June 13, Check #5287;June 26 Purchased 1250;docking station from Samsung for $41 per unit paying in cash, Check #5288;June 27 Sold 1500;docking stations on credit to Honda for $61 per unit, Invoice 5560.;June 27 Hired and paid;a consultant $75000 to devise a marketing plan. AC Speed's management felt this;was necessary to develop brand awareness. Check #5289.;June 28 AC Speed is;behind in its mortgage payments to Bank of America. Paid a total of $10000;$2000 principal and $8000 interest), Check #5290.;June 29 Received;payment in full from Honda for the June 27th transaction.;June 29 Paid in full;for the purchase from Magellan on May 31st, Check #5291.;June 29 Check # 5292;was issued for payroll: $14500 for;salaried and $4750 for wages (wage expense);June 30 Paid the first;month's principal payment of $15,000 on the note payable. In addition, paid one month's interest, Check;#5293;June 30 Issued bonds;payable at face value for $450,000;*All purchases on account terms of 2/15, n/30;**All credit sales have terms of 2/20, n/30;June Month-end Adjustments;(A) AC Speed;has earned one month of the prepaid rent received from their tenant at the;beginning of June.;(B) The;Company took a physical count of Office Supplies on June 30 and found the;following to be on hand: Office Supplies -;$2500;(C) AC Speed;estimates bad debt expense on a monthly basis rather than waiting until;year-end. The company uses the allowance method. Based on recent industry;estimates, AC Speed estimates that the allowance account should be 2% of accounts receivable.;(D) The;Company took a physical inventory count on June 30 and found the following;inventory on hand: Merchandise Inventory -;$120000;(E) The;Balance in the prepaid insurance account at the beginning of June;represents 4 months of coverage. Record;the amount of insurance for June.;(F) Depreciation;on the company's fixed assets for the month of June is as follows;1. The furniture and equipment for the;warehouse was purchased a few years ago for;10000. These assets have a 4-year life, an expected salvage value of;1000 and are depreciated using the straight-line method.;2. The furniture and equipment for the office;was purchased last year for 8500. these;assets have a 7 year life, an expected salvage value of 1500 and are;depreicated using stright-line method.


Paper#39903 | Written in 18-Jul-2015

Price : $67