Assignment - The assignment can be done INDIVIDUALLY OR in groups of TWO (2) students MAX - no exceptions. YOU must list both names on your submission or marks will not be awarded after the fact (regardless of reason). Only 1 submission per group of 2 is necessary. The assignment can also be done individually.
The assignment MUST be done using either MS Excel or MS Word. NO hand-written submissions.
The Infiti Company started business on January 1, 2013. The following transactions took place during the six-months January 1, 2013 - June 30, 2013.
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DATE
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TRANSACTION
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1.
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January 1
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Issued 100, 000 shares at a price of $8 per share
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2.
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Feb 1
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Purchased manufacturing equipment for $180,000. Paid cash
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3.
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Feb 15
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Purchased inventory for $135,000 on account.
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4.
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March 1
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Purchased a building for $140,000. They paid $40,000 in cash and borrowed the balance. The loan is due in five years and has an interest rate of 8% per annum. Interest payments are due quarterly.
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5.
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March 20
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Paid suppliers on account $40,000.
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6.
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March 30
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Paid cash expenses: salaries $20,000, operating expenses $7,000.
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7.
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April 1
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Purchased an insurance policy with 5 years coverage. They paid cash today of $8,000 for the first year's coverage. Equal annual payments of $8,000 are due on April 1.
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8.
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May 1
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Signed a 4 year lease with SL Company to rent out the top floor of the building. SL is required to make quarterly rental payments of $12,000. The first rental payment was received today for the first 3 months (May 1 - July 31). The next rent payment is due Aug 1, and every 3 months subsequently for the next 4 years.
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9.
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May 15
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Received $38,000 cash and billed customers on account $85,000 for total sales of $123,000. Cost of goods sold: $52,000
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10.
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June 1
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Paid interest on loan.
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11.
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June 15
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Received $14,000 from customers on account.
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12.
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June 30
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Paid cash expenses: salaries $22,000, operating expenses $5,000.
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13.
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June 30
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Declared a dividend of 2 cents per share ($0.02 per share)
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Other Information -
The equipment is depreciated straight-line over 8 years. The estimated residual value is $0.
The building is depreciated straight line over 10 years. The estimated residual value is $40,000.
Operating expenses related to the period which will be paid in July are: 1,900.
Income tax rate: 30%. Income taxes are due on Nov 15, 2013.
REQUIRED
1) Analyze the transactions 1 - 13 within the framework of the Basic Accounting Equation using a spreadsheet.
2) Prepare Journal Entries to record the transactions entered into during the six-months ended June 30, 2013.
3) Prepare an unadjusted Trial Balance at June 30, 2013.
4) Prepare ADJUSTING Journal Entries or June 30, 2013.
5) Prepare CLOSING ENTRIES.
6) Prepare the following Financial Statements:
i) Income Statement for the six-months ended June 30, 2013.
ii) Statement of Retained Earnings for the six-months ended June 30, 2013.
iii) The Classified Statement of Financial Position (i.e., classify by liquidity, listing current assets and liabilities separately from non-current) as at June 30, 2013.