Accounting Simulation

*Enter your name, access code, and CRN below and then click the Activate button.	This file is NOT to be shared with any person as it is specifically linked with your name.	Date:	Name:	Access Code:	CRN:	Davenport University	ACCT202 Practice Set
*Click the following buttons to go to the corresponding worksheets:	WINTER 2013

Instructions

Academic Integrity

Products

Chart of Accounts - GL

Chart of Accounts - AR

Chart of Accounts - AP

Purchases Journal

Cash Receipts Journal

Cash Payments Journal

General Journal Pg 1

General Journal Pg 2

General Journal Pg 3

General Ledger

A/R Sub-Ledger

A/P Sub-Ledger

Worksheet

Inventory Control Card

Transactions

ACTIVATE

Sales Journal

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! 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. b. You are encouraged to use your textbook’s table of contents (front) or index (back) to locate helpful references. 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. 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. 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. 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. 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. 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.

Company Background & Scenario	Project Overview & Instructions
A. Overview	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.	c. These project instructions will not address every detail of every task. If you have questions, ask your instructor.
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.	C. Submission Requirements
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. 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 2/30, net 45.	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.	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.
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.	i. Update general ledger account balances after posting adjusting journal entries.
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.	a. Before beginning this part of the project, you will find it helpful to review Chapter 17 on financial statement analysis. Page 705, a summary of ratios, will be particularly useful.

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JUNE JOURNAL TRANSACTIONS	June 1	Signed a one-year 18.5%, $180,000 note payable with First Bank.	June 1	Purchased 3,000 GPS units on Credit from Navistar for $35.00 per unit.
June 1	Issued 5,500 shares of common stock for $11 per share (Refer to General ledger for description of common stock).	June 1	Sold 2,000 DVD players on account to Toyota for $75 per units, Invoice #5555.	June 2
Sold 3,500 GPS units on account to Kia for $52 per unit, Invoice #5556.	June 2	Purchases office supplies from Office Max on credit for $1,200.	June 2	Sold 900 docking stations for $64 per unit and 1950 GPS units for $83 per unit on account to Nissan, Invoice #5560.
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 $4,900 for three months rent (June, July, August).	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 $925, 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 $5,400, 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 3,250 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 2,000 DVD players on credit to Fort Motor Co. for $89.00 per unit, Invoice 5557.	June 15
Check # 5284 was issued for payroll: $14,500 for salaried and $4,750 for wages.	June 16	Purchased 1,800 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 $35 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 1,650 docking stations on credit to Kia for $64.50 per unit, Invoice #5559.
June 23	Paid $75,000 of the $162,500 owed to JVC from May 25, Check #5285.	June 23	Received payment from Ford Motor Co. for $175,000 of the $300,000 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 1,250 docking station from Samsung for $41 per unit paying in cash, Check #5288
June 27	Sold 1,500 docking stations on credit to Honda for $61 per unit, Invoice 5558.	June 27	Hired and paid a consultant $75,000 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 $10,000 ($2,000 principal and $8,000 interest), Check #5290.	June 29	Received payment in full from Honda for the June 25th transaction.	June 29	Paid in full for the purchase from Magellan on May 31st, Check #5291.
June 29	Check #5292 was issued for payroll: $14,500 for salaries and $4,750 for wages.	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 $350,000	*All purchases on account terms of 2/15, n/30	**All credit sales have terms of 2/30, n/45	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 - $2,465	( 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 2.5% of accounts receivable.	( D )	The Company took a physical inventory count on June 30 and found the following inventory on hand:	Merchandise Inventory - $122,221	( 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 $10,000. These assets have a 5-year life, an expected salvage value of $1,000, and are depreciated using the straight-line method.	2. The furniture and equipment for the office was purchased last year for $8,500. these assets have a 7 year life, an expected salvage value of $1,500, and are depreicated using stright-line method.

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Product Name	Description	GPS	In vehicle GPS unit	DVD Player
In vehicle DVD player	Docking Station	Cell phone / Mobile Communications Docking Station

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AC Speed Corporation	Chart of Accounts - General Ledger	BALANCE SHEET ACCOUNTS	Assets	Current Assets
Acct #	Account Name	100	Cash	102
Accounts Receivable	103	Allowance for Doubtful Accounts	104	Merchandise Inventory
105	Office Supplies	106	Prepaid Insurance	Property, Plant and Equipment
140	Land	145	Building	146
Accumulated Depreciation - Building	151	Equipment & Furniture - Warehouse	152	Accumulated Depreciation - Equip & Furn. - Warehouse
153	Equipment & Furniture - Office	154	Accumulated Depreciation - Equip & Furn. - Office	Liabilities
Current Liabilities	201	Accounts Payable	202	Wages Payable
203	Interest Payable	204	Dividends Payable	205
Unearned Rent	Long-Term Liabilities	250	Notes Payable	251
Bonds Payable	252	Mortgage (Warehouse) Payable	Capital (Equity)	300
Common Stock, $1 Par, 100,000 Authorized; 60,000 shares Issued/Outstanding	301	Paid In Capital - Excess of Par	330	Retained Earnings
340	Treasury Stock	INCOME STATEMENT ACCOUNTS	Revenue	500
Sales	510	Sales Discounts	511	Sales Returns & Allowances
Cost of Goods Sold	600	Cost of Goods Sold	Operating Expenses	700
Wage Expense (hourly workers)	701	Salaries Expense (Exempt Staff)	702	Marketing Expense
703	Travel and Entertainment Expense	704	Bad Debt Expense	705
Property Tax Expense	706	Office Maintenance & Repair Expense	707	Legal Expenses
708	Insurance Expense	709	Utilities Expense	710
Office Supplies Expense	711	Telecommunications Expense	712	Depreciation Expense - Equip & Furniture - Warehouse
713	Depreciation Expense - Equip & Furniture - Office	Other Income	800	Rent Income
Other Expenses	900	Interest Expense	Other	1000
Income Summary

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AC Speed Corporation	Chart of Accounts - Accounts Receivable Ledger	Account Name	General Motors	Ford Motor Co.
Toyota	Honda	Kia	Nissan

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AC Speed Corporation	Chart of Accounts - Accounts Payable Ledger	Account Name	Garmin	JVC
Magellan	Michigan Utility Company	Motorola	Navistar	Samsung

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AC Speed Corporation	Sales Journal	Date	Invoice No.	A/R Account Debited	Post Ref
A/R - DR Sales - CR	CGS - DR Inv - CR

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AC Speed Corporation	Purchases Journal	Date	Creditors Account Credited	Other Account - Debited	Post Ref	A/P - CR	Inventory - DR
Office Supplies - DR	Other - DR

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AC Speed Corporation

Cash Receipts Journal

Date

Acct - CR Customer Acct Other Acct

Post Ref

Sales - CR

A/R - CR

Other - CR

Sale Discount - DR

Cash - DR

CGS - DR Inv - CR

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AC Speed Corporation	Cash Payments Journal	Date	Check #	Payee	Account Debited	Post Ref	Cash - CR	Inventory - CR
Other - DR	A/P - DR

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AC Speed Corporation	General Journal	Date	Accounts	Post Ref
DEBIT	CREDIT

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AC Speed Corporation	General Journal	Date	Accounts	Post Ref	DEBIT
CREDIT

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AC Speed Corporation	General Journal	Date	Accounts	Post Ref
DEBIT	CREDIT

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Account:	Cash	Account No.	100	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	Balance	75000	Account:	Accounts Receivable	Account No.	102	Transaction	Account Balance	Date	Item	Post Ref
DEBIT	CREDIT	DEBIT	CREDIT	Balance	490000	Account:	Allowance for Doubtful Accounts	Account No.	103	Transaction	Account Balance
Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	15000	Account:	Merchandise Inventory	Account No.
104	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	334000
Account:	Office Supplies	Account No.	105	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	Balance	2000	Account:	Prepaid Insurance	Account No.	106	Transaction	Account Balance	Date	Item	Post Ref
DEBIT	CREDIT	DEBIT	CREDIT	14000	Account:	Land	Account No.	140	Transaction	Account Balance	Date
Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance Carried Forward	2000600	2000600	Account:	Building	Account No.
145	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance Carried Forward	1500000
1500000	Account:	Accumulated Depreciation - Building	Account No.	146	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT
DEBIT	CREDIT	Balance Carried Forward	1500000	1500000	Account:	Equipment & Furniture - Warehouse	Account No.	151	Transaction	Account Balance	Date
Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	10000	Account:	Accumulated Depreciation - Equip & Furn. - Warehouse	Account No.	152
Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	1900	Account:
Equipment & Furniture - Office	Account No.	153	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT
Balance	8500	Account:	Accumulated Depreciation - Equip & Furn. - Office	Account No.	154	Transaction	Account Balance	Date	Item	Post Ref	DEBIT
CREDIT	DEBIT	CREDIT	Balance	1600	Account:	Accounts Payable	Account No.	201	Transaction	Account Balance	Date
Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	948600	Account:	Wages Payable	Account No.	202
Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Interest Payable	Account No.
203	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Dividends Payable
Account No.	204	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:
Unearned Rent	Account No.	205	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT
Account:	Notes Payable	Account No.	250	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	Account:	Bonds Payable	Account No.	251	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT
DEBIT	CREDIT	Account:	Mortgage (Warehouse) Payable	Account No.	252	Transaction	Account Balance	Date	Item	Post Ref	DEBIT
CREDIT	DEBIT	CREDIT	200000	Account:	Common Stock, $1 Par, 100,000 Authorized; 60,000 shares Issued/Outstanding	Account No.	300	Transaction	Account Balance	Date	Item
Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance	60000	Account:	Paid In Capital - Excess of Par	Account No.	301	Transaction
Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	1341000	Account:	Retained Earnings	Account No.
330	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Balance Brought Forward	366000
Account:	Treasury Stock	Account No.	340	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	Account:	Sales	Account No.	500	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT
DEBIT	CREDIT	Account:	Sales Discounts	Account No.	510	Transaction	Account Balance	Date	Item	Post Ref	DEBIT
CREDIT	DEBIT	CREDIT	Account:	Sales Returns & Allowances	Account No.	511	Transaction	Account Balance	Date	Item	Post Ref
DEBIT	CREDIT	DEBIT	CREDIT	Account:	Cost of Goods Sold	Account No.	600	Transaction	Account Balance	Date	Item
Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Wage Expense (hourly workers)	Account No.	700	Transaction	Account Balance	Date
Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Salaries Expense (Exempt Staff)	Account No.	701	Transaction	Account Balance
Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Marketing Expense	Account No.	702	Transaction
Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Travel and Entertainment Expense	Account No.	703
Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Bad Debt Expense	Account No.
704	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Property Tax Expense
Account No.	705	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:
Office Maintenance & Repair Expense	Account No.	706	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT
Account:	Legal Expenses	Account No.	707	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	Account:	Insurance Expense	Account No.	708	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT
DEBIT	CREDIT	Account:	Utilities Expense	Account No.	709	Transaction	Account Balance	Date	Item	Post Ref	DEBIT
CREDIT	DEBIT	CREDIT	Account:	Office Supplies Expense	Account No.	710	Transaction	Account Balance	Date	Item	Post Ref
DEBIT	CREDIT	DEBIT	CREDIT	Account:	Telecommunications Expense	Account No.	711	Transaction	Account Balance	Date	Item
Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Depreciation Expense - Equip & Furniture - Warehouse	Account No.	712	Transaction	Account Balance	Date
Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Depreciation Expense - Equip & Furniture - Office	Account No.	713	Transaction	Account Balance
Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Rent Income	Account No.	800	Transaction
Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Interest Expense	Account No.	900
Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Income Summary	Account No.
1000	Transaction	Account Balance	Date	Item	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT

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Account:	General Motors	Transaction	Account Balance	Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT
123	5000	Account:	Ford Motor Co.	Transaction	Account Balance	Date	Post Ref	DEBIT	CREDIT
DEBIT	CREDIT	300000	300000	Account:	Toyota	Transaction	Account Balance	Date	Post Ref
DEBIT	CREDIT	DEBIT	CREDIT	185000	185000	Account:	Honda	Transaction	Account Balance
Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Kia	Transaction	Account Balance
Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:	Nissan	Transaction	Account Balance
Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT

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Account:	Garmin	Account No.	Transaction	Account Balance	Date	Post Ref	DEBIT	CREDIT	DEBIT
CREDIT	18000	Account:	Magellan	Account No.	Transaction	Account Balance	Date	Post Ref	DEBIT
CREDIT	DEBIT	CREDIT	30000	Account:	Motorola	Account No.	Transaction	Account Balance	Date
Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	58000	Account:	Navistar	Account No.	Transaction
Account Balance	Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	50000	Account:	Samsung
Account No.	Transaction	Account Balance	Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT	Account:
JVC	Account No.	Transaction	Account Balance	Date	Post Ref	DEBIT	CREDIT	DEBIT	CREDIT
162500	162500

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Unadjusted

Adjusted

Income

Bal. Sheet

Trial Balance

Adjustments

Trial Balance

Statement

Stmt. Own. Equity

Acct. No.

Account Title

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

Dr.

Cr.

100

Cash

102

Accounts Receivable

103

Allowance for Doubtful Accounts

104

Merchandise Inventory

105

Office Supplies

106

Prepaid Insurance

140

Land

145

Building

146

Accumulated Depreciation - Building

151

Equipment & Furniture - Warehouse

152

Accumulated Depreciation - Equip & Furn. - Warehouse

153

Equipment & Furniture - Office

154

Accumulated Depreciation - Equip & Furn. - Office

201

Accounts Payable

202

Wages Payable

203

Interest Payable

204

Dividends Payable

205

Unearned Rent

250

Notes Payable

251

Bonds Payable

252

Mortgage (Warehouse) Payable

300

Common Stock, $1 Par, 100,000 Authorized; 60,000 shares Issued/Outstanding

301

Paid In Capital - Excess of Par

330

Retained Earnings

340

Treasury Stock

500

Sales

510

Sales Discounts

511

Sales Returns & Allowances

600

Cost of Goods Sold

700

Wage Expense (hourly workers)

701

Salaries Expense (Exempt Staff)

702

Marketing Expense

703

Travel and Entertainment Expense

704

Bad Debt Expense

705

Property Tax Expense

706

Office Maintenance & Repair Expense

707

Legal Expenses

708

Insurance Expense

709

Utilities Expense

710

Office Supplies Expense

711

Telecommunications Expense

712

Depreciation Expense - Equip & Furniture - Warehouse

713

Depreciation Expense - Equip & Furniture - Office

800

Rent Income

900

Interest Expense

Total

Net Income (Loss)

Total

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AC Speed Corporation

Income Statement

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AC Speed Corporation

Statement of Retained Earnings

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AC Speed Corporation

Balance Sheet

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AC Speed Corporation	Post-closing Trial Balance	For Month Ended June 30, 2010	DEBIT	CREDIT
Cash	Accounts Receivable	Allowance for Doubtful Accounts	Merchandise Inventory	Office Supplies
Prepaid Insurance	Land	Building	Accumulated Depreciation - Building	Equipment & Furniture - Warehouse
Accumulated Depreciation - Equip & Furn. - Warehouse	Equipment & Furniture - Office	Accumulated Depreciation - Equip & Furn. - Office	Accounts Payable	Wages Payable
Interest Payable	Dividends Payable	Unearned Rent	Notes Payable	Bonds Payable
Mortgage (Warehouse) Payable	Common Stock, $1 Par, 100,000 Authorized; 60,000 shares Issued/Outstanding	Paid In Capital - Excess of Par	Retained Earnings	Treasury Stock
Total

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Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	INDUSTRY	Liquidity	Current Ratio (One decimal place)	2.2000000000000002	Acid Test Ratio (One decimal place)
1.5	Receivables Turnover (One decimal place)	10	Inventory Turnover (One decimal place)	9.5	Profitability	Profit Margin (% with two decimal places)	0.035000000000000003
Asset Turnover (two decimal places)	1.8999999999999999	Return on Assets (% one decimal place)	0.105	Return on Common Shareholders' Equity	(One decimal place)	0.183	Earnings per Share (EPS) (Two decimal places)
3.0499999999999998	Price-Earnings (P/E ) Ratio (Two decimal places)	14.800000000000001	Payout Ratio (% One decimal place)	0.14999999999999999	Solvency Ratios	Debt to Total Assets Ratio (% One decimal place)	0.42199999999999999
Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Common Dividends	19200	16130	15000	Weighted Average Common Shares
65000	65000	63750	Market Price per Share	35	34	31	INSTRUCTIONS: (also refer to the Instructions tab in this workbook)
Evaluate the company's performance trend relative to liquidity, profitability and solvency.	Evaluate the company's performance relative to liquidity, profitability and solvency for their industry for the three years.	Use Word to prepare a memo (500 word minimum) to AC Speed's management, addressing the following questions:	1. How efficiently is AC Speed using its assets to produce sales? How does it compare to other firms in the industry in this respect?	2. Is AC Speed able to effectively leverage its profitability? Why or why not?	3. AC Speed's general manager mentioned that the company may be seeking some additional bank financing (both short- and long-term) in the near future. Explain how you think the bank	will view the company's request, based on the evidence of liquidity and solvency ratios.

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B/S Adjuster	1.1200000000000001	1.1200000000000001	1.0600000000000001	1.0600000000000001	1.1000000000000001	1.1000000000000001	1.0900000000000001	1.0900000000000001	I/S Adjuster	12	12	1.02
1.02	1.02	1.02	1.01	1.01	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007	Adjusted	Adjusted	Adjusted	Adjusted
Adjusted	Trial Balance	Trial Balance	Trial Balance	Trial Balance	Trial Balance	Acct. No.	Account Title	Dr.	Cr.	Dr.	Cr.	Dr.
Cr.	Dr.	Cr.	Dr.	Cr.	100	Cash	294000	311640	342804
373656.36000000004	75000	102	Accounts Receivable	948800	846728	931400.80000000005	1015226.8720000001
490000	103	Allowance for Doubtful Accounts	16800	17808	19588.800000000003	21351.792000000005	15000	104
Merchandise Inventory	601856	637967.35999999999	701764.09600000002	764922.86464000004	334000	105	Office Supplies	2240
2374.4000000000001	2611.8400000000001	2846.9056000000005	2000	106	Prepaid Insurance	15680.000000000002	16620.800000000003
18282.880000000005	20111.168000000005	14000	140	Land	2000600	2000600	2000600
2000600	2000600	145	Building	1500000	1500000	1500000	1500000	1500000	146	Accumulated Depreciation - Building
1500000	1500000	1500000	1500000	1500000	151	Equipment & Furniture - Warehouse	11200.000000000002	11872.000000000002	13059.200000000003
14234.528000000004	10000	152	Accumulated Depreciation - Equip & Furn. - Warehouse	2128	2255.6800000000003	2481.2480000000005	2704.560320000001
1900	153	Equipment & Furniture - Office	9520	10091.200000000001	11100.320000000002	12099.348800000003	8500	154
Accumulated Depreciation - Equip & Furn. - Office	1792.0000000000002	1899.5200000000004	2089.4720000000007	2277.5244800000009	1600	201	Accounts Payable
812432	861177.92000000004	947295.71200000017	978338.32608000026	948600	202	Wages Payable
203	Interest Payable
204	Dividends Payable
205	Unearned Rent
250	Notes Payable	251	Bonds Payable
252	Mortgage (Warehouse) Payable	124000.00000000003
131440.00000000003	144584.00000000006	157596.56000000008	200000	300	Common Stock, $1 Par, 100,000 Authorized; 60,000 shares Issued/Outstanding	65000	65000
65000	65000	60000	301	Paid In Capital - Excess of Par	1545000	1545000	1545000
1545000	1341000	330	Retained Earnings	1166744	1065744	956030	1238479	366000	340	Treasury Stock
500	Sales	8850000
8874000	9051480	9141993.8000000007	725000	510	Sales Discounts
511	Sales Returns & Allowances
600	Cost of Goods Sold	7656000	7661551	7625748.0200000005	7852005.5002000006
638000	700	Wage Expense (hourly workers)	120000	122400	124848	126096.48	10000	701
Salaries Expense (Exempt Staff)	360000	367200	374544	378289.44	30000	702	Marketing Expense	288000
293760	299635.20000000001	302631.55200000003	24000	703	Travel and Entertainment Expense	27600	28152
28715.040000000001	29002.190399999999	2300	704	Bad Debt Expense
705	Property Tax Expense
706	Office Maintenance & Repair Expense	6000	6120	6242.4000000000005	6304.8240000000005	500
707	Legal Expenses	198600	202572	206623.44	208689.67440000002	16550	708	Insurance Expense
24000	24480	24969.600000000002	25219.296000000002	2000	709	Utilities Expense	12000
12240	12484.800000000001	12609.648000000001	1000	710	Office Supplies Expense	3480	3549.5999999999999
3620.5920000000001	3656.79792	290	711	Telecommunications Expense	660	673.20000000000005	686.6640000000001
693.53064000000006	55	712	Depreciation Expense - Equip & Furniture - Warehouse	1980	2019.6000000000001	2059.9920000000002	2080.5919200000003
165	713	Depreciation Expense - Equip & Furniture - Office	1680	1713.6000000000001	1747.8720000000001	1765.3507200000001	140	800
Rent Income	900	Interest Expense
Total	14083896	14083896	14064324.759999998	14064325.120000001
14233548.756000001	14233549.232000001	14652742.923239999	14652742.56288	5159100	5159100

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GPS

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Shoe:

DVD Player

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Shoe:

Docking Station

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56000

56000

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DATE	Test	NAME	Test	Tim
ACCESS CODE	Test	1	CRN	Test
1