accounting

assessment_4.xls

T-Accounts Beg

Worksheet 1 of 9. Template for requirement 1: Set up T-accounts for the accounts on the trial balance and enter beginning balances.
Learner:
PA Engineering, Inc.
	Cash				Accounts Receivable			Prepaid Office Supplies
B. Bal	10,000.00	10,000.00			60,000.00	40,000.00	B. Bal	20,000.00
	20,000.00	40,000.00
	140,000.00	8,000.00			60,000.00	40,000.00		20,000.00	- 0
	4,600.00				20,000.00			20,000.00
	174,600.00	58,000.00
	116,600.00			Prepaid Expenses	Computers			Miscellaneous Other Assets
				B. Bal	80,000.00		B. Bal	5,000.00
	Land							8,000.00
	10,000.00							13,000.00
					Accounts Payable
								Notes Payable
	Interest Payable								20,000.00
		1,000.00			- 0	- 0
						- 0
								Supplies Expense
	Income Tax Payable				Salaries and Wages Payable
								Wages Expense
	Contributed Capital				Accumulated Depreciation
		115,000.00	B. Bal
		4,600.00
		119,600.00						Depreciation Expense
	Dividends Declared				Service Revenue
						200,000.00
	Remaining Expenses				Interest Expense			Income Tax Expense
					1,000.00
					Retained Earnings
End of worksheet

Worksheet 2 of 9. Template for requirements 2 and 3, journal entries: Prepare journal entries for transactions (a) through (k) in columns A through D. Journal the adjusting entries (l) through (p) in columns G through I.
Learner:
PA Engineering, Inc.
	Transactions during 2012	DR	CR		Adjusting entries	DR	CR
	Debit is always first and credit is indented
a.	Cash	20,000.00		l.	Supplies expense
	Note Payable		20,000.00		Prepaid Office Supplies
	Borrowed cash				(20000+25000-18000)
b.	Land	10,000.00		m.	Depreciation expense
	Cash		10,000.00		Accumulated depreciation
	Purchased land
c.	Cash	140,000.00		n.	Interest expense
	Accounts Receviable	60,000.00			Accrued Interest payable
	Service Revenue		200,000.00		($20,000 x .1 x (6/12))
	Earned revenues for 2012
				o.	Wages expense
d.	Cash	4,600.00			Salaries and Wages payable
	Contributed Capital		4,600.00
	(4,000 shares @1.15 - market value)
				p.	Income tax expense
e.	Remaining Expenses				Income tax payable
	Cash	100,000.00
	Accounts Payable	20,000.00			Debits must equal Credits	- 0	- 0
	Incurred remaining expenses		120,000.00
f.	Cash	40,000.00
	Accounts Receivable		40,000.00
	Collected on Accounts Receivable
g.	Other Assets	8,000.00
	Cash		8,000.00
	Purchased other assets
h.	Accounts Payable
	Cash	18,000.00
	Paid accounts payable		18,000.00
i.	Prepaid Office Supplies
	Accounts Payable	25,000.00
	Purchased office supplies		25,000.00
j.	No entry contract only
k.	Dividends Declared
	Cash	10,000.00
	Declared and paid cash dividends		10,000.00
	Debits must equal Credits	455,600.00	455,600.00
End of worksheet

Worksheet 3 of 9. Template for requirements 2 and 3, T-accounts: Post transactions (a) through (k) and adjusting entries (l) through (p) to the T-accounts.
Learner:
PA Engineering, Inc.
	Cash				Accounts Receivable				Prepaid Office Supplies
B. Bal	10,000.00	10,000.00	(b)	( c)	60,000.00	40,000.00	(f)	B. Bal	20,000.00	18,000.00	(l)
(a)	20,000.00	100,000.00	(e)					(i)	25,000.00
(c )	140,000.00	8,000.00	(g)		60,000.00	40,000.00			45,000.00	18,000.00
(d)	4,600.00	18,000.00	(h)		20,000.00				27,000.00
(f)	40,000.00	10,000.00	(k)
	214,600.00	146,000.00
	68,600.00			Prepaid Expenses	Computers				Miscellaneous Other Assets
				B. Bal	80,000.00			B. Bal	5,000.00
	Land							(g)	8,000.00
(b)	10,000.00
					Accounts Payable
				(h)	18,000.00	20,000.00	(e)		Notes Payable
	Interest Payable					25,000.00	(i)			20,000.00	(a)
		1,000.00	(n)		18,000.00	45,000.00
						27,000.00
									Supplies Expense
	Income Tax Payable				Salaries and Wages Payable			(l)	18,000.00
		10,000.00	(p)			15,000.00	(o)
									Wages Expense
	Contributed Capital				Accumulated Depreicaiton			(o)	15,000.00
		115,000.00	B. Bal			21,000.00	(m)
		4,600.00	(d)
		119,600.00							Depreciation Expense
	Dividends Declared				Service Revenue			(m)	21,000.00
(k)	10,000.00					200,000.00	( c)
	Remaining Expenses				Interest Expense				Income Tax Expense
(e)	120,000.00			(n)	1,000.00			(p)	10,000.00
					Retained Earnings
End of worksheet

Worksheet 4 of 9. Template for requirement 4: Prepare an income statement (including earnings per share).
Learner:
PA Engineering, Inc.
Income Statement
For the Year Ended December 31, 2012
Service Revenue		$ 200,000.00
Less: Expenses
Depreciation expense	$ 21,000.00
Supplies expense	$ 18,000.00
Wages expense	$ 15,000.00
Interest expense	$ 1,000.00
Remaining expense	$ 120,000.00
Total expense		175,000.00
Net Income before taxes		25,000.00
Less: Income Taxes		$ 10,000.00
Net Income		$ 15,000.00
End of worksheet

Worksheet 5 of 9. Template for requirement 4: Prepare a statement of stockholders' equity.
Learner:
PA Engineering, Inc.
Statement of Stockholder's Equity
For the Year Ended December 31, 2012
Contributed Capital: December 31, 2011, 100,000 shares	$ 115,000.00
Add: January 3, 2012 issue of 4,000 shares	4,600.00
Total Contributed Capital at December 31, 2012	119,600.00
Retained Earnings:
Balance December 31, 2011	119,600.00
Add: Net Income	15,000.00
Less Dividends	(10,000.00)
Balance December 31, 2012	5,000.00
Total Stockholder's Equity	$ 124,600.00
End of worksheet

Worksheet 6 of 9. Template for requirement 4: Prepare a balance sheet.
Learner:
PA Engineering, Inc.
Balance Sheet
At December 31, 2012
Assets			Liabilities
Current Assets			Current Liabilities
Cash	$ 68,600.00		Accounts Payable	$ 27,000.00
Accounts Receivable	20,000.00		Salaries and Wages Payable	15,000.00
Prepaid Office Supplies	27,000.00		Interest Payable	1,000.00
			Income Tax Payable	10,000.00
Total Current Assets		115,600.00	Total Current Liabilities		53,000.00
			Long-Term Notes Payable		20,000.00
Long-Term Assets
Land	10,000.00
Computers	80,000.00		Contributed Capital		119,600.00
Less: Accumulated Depreciation (enter as -)	(21,000.00)		Retained Earnings		5,000.00
Miscellaneous Other Assets	13,000.00				124,600.00
Total Long-Term Assets		82,000.00
			Total Liabilities and Owners' Equity		$ 197,600.00
Total Assets		$ 197,600.00
End of worksheet

Worksheet 7 of 9. Template for requirement 4: Prepare a statement of cash flows.
Learner:
PA Engineering, Inc.
Statement of Cash Flows
For the Year Ending December 2012
Cash flows from operating activities
Cash collected from customers	180,000
Cash paid to suppliers	(18,000)
Cash paid for remaining expenses	(100,000)
Net cash flows from operating activities	62,000
Cash flows from investing activities
Cash paid for land	(10,000)
Cash paid for other assets	(8,000)
Net cash flows from investing activities	(18,000)
Cash flows from financing activities
Cash received from issuing stock to owners	4,600
Cash received from note payable	20,000
Cash paid for dividends	(10,000)
Net cash flows from financing activities	14,600
Net increase in cash during the month	58,600
Cash and cash equivalents, January 1	10,000
Cash and cash equivalents, December 31	68,600
Ending Cash balance should agree to Balance Sheet balance of $68,600. If agrees to Balance Sheet, next cell will be zero.	$ - 0
End of worksheet

Worksheet 8 of 9. Template for requirement 5: Journal closing entries.
Learner:
PA Engineering, Inc.
Closing Entries	DR	CR
Service Revenue		200,000.00
Income Summary
Income Summary
Depreciation Expense	21,000.00
Supplies Expense	18,000.00
Wages Expense	15,000.00
Interest Expense	1,000.00
Income Tax Expense	10,000.00
Remaining Expense	120,000.00
Income Summary
Retained Earnings
Retained Earnings	5,000.00
Dividends Declared	10000
Debits must equal credits	200,000.00	200,000.00
End of worksheet

Worksheet 9 of 9. Template for requirement 6: Compute the current ratio, asset turnover, and net profit margin for 2012 and explain what the results suggest about PA Engineering, Inc.
Learner:
Ratios
Current Ratio = Current Assets ÷ Current Liabilities
Current Assets	115,600.00	=	2.18
Current Liabilities	53,000.00
Current ratio results compared to industry average (2.2 to 1.0): it is within the industry average. It is favourable.
Asset Turnover = Sales ÷ Assets
Sales	200,000.00	=	1.01
Assets	197,600.00
Asset turnover results compared to industry average (3 times per year):it is below the industry expectation.
Net Profit Margin = Net Income ÷ Sales
Net Income	15,000.00	=	8%
Sales	200,000.00
Net profit margin results compared to industry average (%5.00): it is favourable since it is above the industry average.
End of worksheet