Accounting Excel assignment

Project A – Preparing Financial Statements

Sports Apparel Inc. is a new business which started on 1/1/2017. During 2017 and 2018, the company has performed the following transactions:

2017 (Year 1)

Date Transaction 01/01 Borrowed $10,000 from a bank with an APR of 2% and a five-year term. Accrued interest is

payable on the first day on January each year. 01/01 Paid $1,000 in advance to rent an office for 1 year. The office was in use immediately after

the payment. 02/01 Issued 20,000 shares of $1 par value common stock for cash at $3 per share. 03/01 Hired one employee to run the business. The monthly salary is $200 and he is paid semi-

annually (e.g. twice a year). His first day of work is April 1 and his first pay-day is September 30.

03/05 Purchased merchandise on account from Floyd Co., $4,000, terms FOB shipping point, 2/10, n/30. The transportation cost is $120 in cash.

03/30 Purchased merchandise on account from Kramer Co., $8,500, terms FOB destination, 1/10, n/30. The transportation cost is $100.

03/31 Sold merchandise on account to C. F. Howell Co., list price $25,000, terms 2/20, n/30. The cost of the merchandise sold was $9,000.

03/31 Purchased office supplies for cash, $150. 04/01 Returned merchandise purchased on March 30 from Kramer Co., $1,300. 04/01 Purchased a delivery truck for $20,000, paying cash. The truck has a useful life of 10 years.

The double-declining method of depreciation is used. 04/02 Paid Floyd Co. on account for purchase of March 5. 04/08 Paid Kramer Co. on account for purchase of March 30, less return of April 1. 04/15 Received cash on account from sale of March 31 to C. F. Howell Co. 06/01 Paid garage $50 for an oil change to the truck. 09/19 Purchased 5,000 shares of common stock to be held in the treasury for $4 per share. 10/17 Sold 3,000 shares of treasury stock purchased on September 19 for cash at $5 per share. 11/01 Declared a dividend of $0.1 on all current outstanding shares, payable on 12/31. 12/31 Supplies on hand amounted to $100. 12/31 Sold the truck purchased on April 1 for $12,000. 12/31 Received the electricity bill from West Penn Power in the amount of $200. It is not due until

January 15 of next year.

2018 (Year 2)

Date Transaction 01/01 Paid $3,000 in advance to rent an office for three years. The office was in use immediately

after the payment. 01/01 Paid down accrued interest of $200 for the note. 02/01 Split the company's stock 2-for-1. 03/31 Paid and terminated the employee. 03/31 Received cash in advance for merchandise from Vix Co., $10,000. All merchandise is

expected to be shipped to Vix within the next year. 05/31 Used all supplies on hand. 06/30 Lent $10,000 to Brahms Co. with an interest rate of 5% and a five-year term. Accrued

interest is payable on the first day on July each year. 10/01 Shipped merchandise to Vix Co., $5,000, terms FOB destination. The transportation cost

$100 in cash. The cost of the merchandise shipped is $1000. 11/01 Sold the rest merchandise in inventory to customers and made cash sales of $10,000, terms

FOB shipping point. The transportation cost $100 in cash. 12/31 Declared dividend of $0.1 on all current outstanding shares, payable on January 31 of next

year. 12/31 Received the electricity bill from West Penn Power in the amount of $200. It is not due until

January 15 of next year.

Instructions: Please journalize all transactions (including adjusting and closing entries) for Sports Apparel Inc. in 2017 and 2018. Prepare the income statement and balance sheet for the year ended 12/31/2017 and for the year ended 12/31/2018. You may find helpful using T-accounts, but it is not required. You will be provided with the adjusted trial balance for each year in order to help you check your work. Also, you do not need to prepare the statement of changes in shareholders’ equity and the cash flow statement. All adjusting entries should only be made on 12/31 instead of monthly entries. Please submit your results in an Excel spreadsheet on Canvas. Again, I’m looking for the journal entries that take place in 2017 and 2018 along with the balance sheet and income statement for 2017 and 2018.