Task: You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company’s accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the company’s fiscal year. Peter Pan Ltd Trial Balance as at June 30, 2018 A/C Name DR $ CR $ Cash 440,000 Accounts Receivable 530,000 Allowance for Bad Debts 40,000 Merchandise Inventory 320,000 Store Supplies 10,000 Prepaid Rent 280,000 Furniture and Equipment 600,000 Accumulated Depreciation -Furniture and Equipment 120,000 Accounts Payable 145,000 Wages Payable Notes Payable, Long-Term 510,000 Unearned Sales Revenue 260,000 Peter Pantry, Capital 1,900,000 Peter Pantry, Withdrawal 75,000 Sales Revenue Earned 1,095,000 Cost of Goods Sold 645,000 Wages Expense 525,000 Rent Expense 210,000 Utilities Expense 230,000 Depreciation Expense -Furniture and Equipment Store Supplies Expense 160,000 Bad debt Expense Interest Expense 45,000 Total 4,070,000 4,070,000 The following additional information is available at June 30, 2018: Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018 ACCT1002 – Introduction to Financial Accounting Final Assignment Page | 3 The Furniture and equipment is being depreciated over 10 years on the double-declining balance method of depreciation, down to a residue of $80,000. Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018. A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand. On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded. The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000. Required: Prepare the necessary adjusting journal entries on June 30, 2018. [Narrations are not required] Prepare the company’s multiple-step income statement for the year ended June 30, 2018. Prepare the company’s statement of owner’s equity for the year ended June 30, 2018. d) Prepare the company’s classified balance sheet as at June 30, 2018.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Task: You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1st, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company’s accounting records, internal control and preparation of the financial statements. The following
Peter Pan Ltd
Trial Balance as at June 30, 2018
|
A/C Name |
DR $ |
CR $ |
|
Cash |
440,000 |
|
|
|
530,000 |
|
|
Allowance for |
40,000 |
|
|
Merchandise Inventory |
320,000 |
|
|
Store Supplies |
10,000 |
|
|
Prepaid Rent |
280,000 |
|
|
Furniture and Equipment |
600,000 |
|
|
|
120,000 |
|
|
Accounts Payable |
145,000 |
|
|
Wages Payable |
||
|
Notes Payable, Long-Term |
510,000 |
|
|
Unearned Sales Revenue |
260,000 |
|
|
Peter Pantry, Capital |
1,900,000 |
|
|
Peter Pantry, Withdrawal |
75,000 |
|
|
Sales Revenue Earned |
1,095,000 |
|
|
Cost of Goods Sold |
645,000 |
|
|
Wages Expense |
525,000 |
|
|
Rent Expense |
210,000 |
|
|
Utilities Expense |
230,000 |
|
|
Depreciation Expense -Furniture and Equipment |
||
|
Store Supplies Expense |
160,000 |
|
|
Bad debt Expense |
||
|
Interest Expense |
45,000 |
|
|
Total |
4,070,000 |
4,070,000 |
The following additional information is available at June 30, 2018:
- Eight (8) months’ rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018
ACCT1002 – Introduction to Financial Accounting Final Assignment Page | 3
- The Furniture and equipment is being depreciated over 10 years on the double-declining balance method of depreciation, down to a residue of $80,000.
- Wages earned by employees NOT yet paid amounted to $35,000 at June 30, 2018.
- A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand.
- On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded.
- The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000.
Required:
- Prepare the necessary
adjusting journal entries on June 30, 2018. [Narrations are not required]
- Prepare the company’s multiple-step income statement for the year ended June 30, 2018.
- Prepare the company’s statement of owner’s equity for the year ended June 30, 2018.
- d) Prepare the company’s classified
balance sheet as at June 30, 2018.
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