Bco114 Accounting I Task Brief Rubricstask Assignment 3 33 Of C ✓ Solved
BCO114 Accounting I Task brief & rubrics Task: Assignment 3 (33% of course grade) You are asked to answer all the questions in the proposed exercises. This task assesses the following learning outcomes: • Understand uncollectible receivables and how to account for uncollectible receivables • Apply acquired knowledge and skills to prepare the income statement • Demonstrate understanding of merchandising activities and financial assets LAUNCH: WEEK 4 Friday January 15th, 2021 / DELIVERY: WEEK 4 Sunday January 17th, 2021, 23:59hrs ON MOODLE Submission file format: Word document with all the answers. EXERCISE 1 (20 points) On September 1, 2019, Dental Equipment Corporation sold equipment priced at €350,000 in exchange for a six-month note receivable with an annual interest rate of 12%, all due at maturity. (a) Prepare the entry on 1 September 2019 made by Dental to record the receipt of this note receivable. (b) Prepare the December 31, 2019 (fiscal year-end), adjusting entry made by Dental with regard to this note receivable. (c) Prepare the entry made by Dental on March 1, 2020 (maturity date of note), to record collection of note and interest.
General Journal Date Account Titles and Explanation Debit Credit (a) (b) (c) EXERCISE 2 (20 points) (1) The general ledger controlling account for Accounts Receivable has a balance of €120,500 at year-end before adjustment. The company uses the balance sheet approach to estimate uncollectible accounts. By aging the individual customers' accounts, it was determined that the doubtful accounts amounted to €5,020. Prepare the year-end adjusting entry for uncollectible accounts under each of the following independent assumptions: (a) Allowance for Doubtful Accounts has a credit balance of €2,850. (b) Allowance for Doubtful Accounts has a debit balance of €925. General Journal Date Account Titles and Explanation Debit Credit (a) (b) (2) As of December 31, 2015, Valley Company has ,920 cash in its current bank account, as well as several other items listed below: What amount should be shown in Valley's December 31, 2015, balance sheet as "Cash and cash equivalents"?
EXERCISE 3 (30 points) (1) Miracle Corporation had gross sales revenue of €1,700,000; cost of goods sold of €950,000; sales returns of €52,500; and sales discounts of €30,000. Compute for the year: (a) What is the net sales? (b) What is the gross profit? (c) What is the gross profit rate? (2) Your store sells computers and software. The average computer sells for €1,350, but the customer buying a computer also buys an average of €750 in software. You earn only 10% gross profit rate on sales of computers, but you make a 40% gross profit rate on software. You currently are selling 150 computers per month.
What is the total amount of your monthly gross profit? (3) Indicate whether you would expect each of the following businesses to maintain a perpetual or a periodic inventory system. Explain the reasoning behind your answers: (a) A jewelry store. (b) A roadside vegetable stand. EXERCISE 4 (30 points) Beech Soda Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows: On January 18, Beech Soda Inc. sold 25 units of this product. The other 28 units remained in inventory at January 31. (1) Determine the cost of goods sold to be recorded at January 18, using each of the following methods.
Show computations. (a) FIFO (b) LIFO (c) Average cost (2) Determine the cost of 28 units of this product in inventory at January 31, using each of the following methods. Show computations. (a) FIFO (b) LIFO (c) Average cost Rubrics Descriptor 9-10 The student demonstrates an excellent understanding of the concepts. 8-8.9 The student demonstrates a good understanding of the concepts. 7-7.9 The student demonstrates a fair understanding of the concepts. 6-6.9 The student demonstrates some, but insufficient understanding of the concepts.
3-5.9 The student demonstrates insufficient understanding of the concepts. They may mention some relevant ideas or concepts, although it is clear that the relationship between them is not understood by the student. 1-2.9 The student demonstrates insufficient understanding of the concepts and does not mention any relevant ideas or concepts. 0 The student leaves the question blank or cheats. Points are stated for each exercise.
Force Sustainment Reading Material (Please google) ADP 4-0 Sustainment ADRP 4-0 - Sustainment ATP 4-0.1 – Army Theater Distribution ATP 4-90 – Brigade Support Battalion ATP 6-0.5 - Command Post Organization and Operations DODD 5101.1 FM 3-96 – Brigade Combat Team FM 6-0 – Commander and Staff Organization and Operations Guidebook for JFLCC (10 February 2006) (See attachment titled “C-5â€) JP 4-0 – Joint Logistics (2013) JP 4-01 – The Defense Transportation System ST 4-1 (June 2016) (See attachment titled “C-6â€) Force Generation Reading Material (Please google) ADP 4-0 Sustainment (2019) ADRP 4-0 Sustainment (2019) AR 40-501 Standards of Medical Fitness (2019) AR 220-1 Army Unit Status Reporting and Force Registration-Consolidated Policies (2010) AR 525-29 Force Generation-Sustainable Readiness (2019) ATP 1-06_2 The Commanders’ Emergency Response Program (2017) ATP 3-35 Army Deployment and Redeployment (2015) ATP 4-93 Sustainment Brigade (2016) FM 1-06 Financial Management Operations (2014) JP 3-0 Joint Operations (2017) JP 4-01 The Defense Transportation System (2017) JP 4-10 Operational Contract Support (2019) TRADOC PAM The US Army Multi-Domain Operations ) Additional Reading : Army accepts Gansler Commission report on contracting; commits to action By Mr.
Paul Boyce (FORSCOM)November 1, 2007 Secretary of the Army Pete Geren accepted Nov. 1 the report of an independent commission citing structural weaknesses and organizational shortcomings in the U.S. Army's acquisition and contracting system used to support expeditionary operations. Dr. Jacques Gansler, former undersecretary of defense for acquisition, technology and logistics, presented "The Commission on Army Acquisition and Program Management in Expeditionary Operations" report to Secretary Geren, who earlier this year formed the commission to assess the Army's acquisition system.
Geren said the report offered the "blunt and comprehensive assessment we asked for and needed, and a plan for the way ahead." Gansler was named chairman of the commission on Sept. 12 by Geren, who determined the Army's acquisition system needed a comprehensive review to examine its role in support of large-scale expeditionary operations. Geren sought an uncompromising, big-picture review of the system. He wanted recommendations addressing how to best ensure that the Army is properly equipped for a future characterized by persistent conflict. Complementing the commission's strategic review, Geren also formed a task force to review current contracting operations and take immediate action where appropriate.
The Army Contracting Task Force, co-chaired by Lt. Gen. N. Ross Thompson, military deputy to the assistant secretary of the Army for acquisition, logistics and technology; and Ms. Kathryn Condon, executive deputy to the commanding general of Army Materiel Command, has already made actionable recommendations and is implementing improvements.
Operations in Iraq and Afghanistan have demonstrated the demand that expeditionary military operations place on the contracting system and contracting personnel, Geren pointed out. The U.S. Army has never fought an extended conflict that required this much to be outsourced. Approximately half of the personnel currently deployed in Iraq are contractor employees, who provide food services, interpreters, communications, equipment repair and other important services. "Contracting and procurement must be an Army core competency," Geren said.
"I deeply appreciate the good work of Dr. Gansler and his commission. We are responding positively and quickly to the commission's findings and recommendations." Gansler's commission and the Army Contracting Task Force's efforts followed investigations and audits which have cited contractors and government contracting officials for corrupt activity related to contingency contracting. The investigations continue. As of Oct.
23, the U.S. Army Criminal Investigation Command is conducting 83 investigations relating to contract fraud in Iraq, Kuwait, and Afghanistan. While the cases vary in severity and complexity, most involve bribery. There are confirmed bribes in excess of million. As of Oct.
24, 23 U.S. government employees, both military and civilian, have been charged or indicted in federal court. Contracts valued at more than billion are affected. The Army reorganized its contracting office in Kuwait, replaced its leaders, increased the size of the staff and provided more ethics training. "The overwhelming majority of our contracting workforce, civilian and military, is doing an outstanding job under challenging circumstances," Geren said. "But, we must do a better job of organizing, resourcing and supporting them in their critical work.
We will take the steps necessary to ensure that we execute our responsibility effectively, efficiently and consistently with Army values." The commission outlined four areas as critical to future success: (1) increased stature, quantity and career development for contracting personnel - both military and civilian, particularly for expeditionary operations; (2) restructure of the organization and responsibility to facilitate contracting and contract management; (3) training and tools for overall contracting activities in expeditionary operations; and (4) obtaining legislative, regulatory, and policy assistance to enable contracting effectiveness - important in expeditionary operations. Commission members include David J.
Berteau, former principal deputy assistant secretary of defense (resource management & support); retired Gen. Leon Salomon, former commander, Army Materiel Command; retired Gen. David M. Maddox, former commander, U.S. Army Europe; and retired Rear Adm.
David R. Oliver Jr., former director, Office of Management and Budget, Coalition Provisional Authority, Iraq. The Gansler report traced many of the difficulties to post-Cold War cuts in the Army acquisition budget, which led to an undersized acquisition workforce in the face of an expanding workload. "This workforce has not been properly sized, trained, structured, or empowered to meet the needs of our warfighters, in major expeditionary operations," Geren said. "We also need to do a better job in training our commanders on their responsibilities for requirements definition and contractor performance." ESSAY TITLE 2 Full Essay Title Student Name School Class Instructor Date Full Essay/Paper Title This begins the introduction section of the essay.
Indent the first line 0.5†and limit the introduction to 1-2 paragraphs. Double space throughout the document and place two spaces after sentences in the body of the paper. The last sentence of the introduction will be your thesis statement. This is your opinion or position on the topic of your essay (THESIS). First Main Point (USE THE TITLE OF YOUR POINT) DO NOT USE the exact words “First Main Point†as Level I heading.
Your main point or idea for the first section serves as the Level I heading. Use discussion and substantive evidence from the research for your first key point that supports your thesis. This section should contain multiple paragraphs and will likely be approximately 30% of the assigned length of the essay (@ 1.5 – 2 pages for a 5 – 8-page essay). End by using a transition sentence to introduce your second main point. Second Main Point (USE THE TITLE OF YOUR POINT) DO NOT USE the exact words “Second Main Point†as Level I heading.
Your main point or idea for the second section serves as the Level I heading. Use discussion and substantive evidence from the research for your second key point that supports your thesis. This section should contain multiple paragraphs and will likely be approximately 30% of the assigned length of the essay. End by using a transition sentence to introduce your third main point. Third Main Point (USE THE TITLE OF YOUR POINT) DO NOT USE the exact words “Third Main Point†as Level I heading.
Your main point or idea for the third section serves as the Level I head. Use discussion and substantive evidence from the research for your third key point that supports your thesis. This section should contain multiple paragraphs and will likely be approximately 30% of the assigned length of the essay. End by transitioning to your conclusion. Conclusion Restate the thesis statement (copy and paste) to remind readers of the controlling idea / position of your essay.
Summarize each of your main points and illustrate the connection between your supporting evidence and your opinion (rationale, typically, five to seven complete sentences). Should End with a broad closing statement (big picture). I do not mind if the conclusion is 500 words. References Author, J. B. (2012).
Book title italicized using sentence case . City Published, ST: Publishing Company. Johnson, R. L. (n.d.). Webpage from a reputable and well-known organization website with no publication date.
Retrieved from Stewart, M. D. (2015, November 11). Article title from a published magazine in sentence case. Magazine Title Italicized , Vol#(Issue#), page #s the article appears . Term Reflective Essay Instructions/Writing Requirements Purpose : Demonstrate an understanding of the Department of Force Management (DFM).
List your ELO’s here. Assignment Instructions : Write a 4 - 5-page substantive essay. Refer to Purdue Owl APA Style, 6th Edition format ( not including the title page and reference page ). Please make sure to: 1. Demonstrate an understanding of what was learned during this term (DFM) based upon the ELOs above.
2. Think about the major takeaways from the ELO's and the applicability of the course as a future graduate. Important Note 1 : Please see attachment sample_a, which is an example of the Purdue Owl APA Style, 6th Edition essay format. Important Note 2 : Need a strong thesis statement in the last line of the opening paragraph and the first line in the conclusion paragraph (see attachment sample_a). Also, each ELO listed above will be a level one heading.
Important Note 3 : Please make sure to have transitional sentences (see attachment sample_a). Important Note 4 : Please use attached rubrics. Important Note 5 : Please use attachment t2_rm, which are sources/references for this assignment. These sources/references were also used during this course.
Paper for above instructions
Accounting Practices in Notes Receivable and Uncollectible AccountsIntroduction
In the ever-vibrant world of accounting, understanding the nuances of financial statements is crucial for any business endeavor. Accurate records are indispensable for determining a company’s financial position. This essay delves into essential accounting principles related to notes receivables, uncollectible accounts, and inventory systems, grounded in practical applications. This exploration will not only demonstrate how to accommodate such transactions through financial statements but also highlight the importance of strategic inventory management.
Notes Receivable Accounting
1. Recording Notes Receivable
Transactions involving notes receivable are essential to understanding a firm’s short-term financing. As highlighted by the scenario involving Dental Equipment Corporation, the sale of equipment worth €350,000 on a six-month note at a 12% annual interest rate illustrates how companies recognize these financial instruments.
The initial entry to record the note receivable made on September 1, 2019, is as follows (Author, Year):
| Date | Account Titles and Explanation | Debit | Credit |
|-----------------|---------------------------------------|-------------|-------------|
| September 1, 2019 | Notes Receivable €350,000 | €350,000 | |
| | Sales Revenue | | €350,000 |
This entry reflects an increase in assets (Notes Receivable) and revenue recognition.
2. Adjusting Entries for Interest
As the financial year ends on December 31, 2019, an adjusting entry is necessary to record the accrued interest on the note. The interest for four months (September to December) is calculated as follows:
\[
\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} = €350,000 \times 12\% \times \frac{4}{12} = €14,000
\]
The adjusting entry on December 31, 2019, is therefore:
| Date | Account Titles and Explanation | Debit | Credit |
|--------------------|--------------------------------------|-------------|-------------|
| December 31, 2019 | Interest Receivable | €14,000 | |
| | Interest Revenue | | €14,000 |
This adjustment fortifies the income statement, representing revenue earned but not yet received.
3. Collection of Note Receivable
Upon reaching maturity on March 1, 2020, the collection of the note and interest results in the following entry:
\[
\text{Total Amount} = \text{Principal} + \text{Interest} = €350,000 + €14,000 = €364,000
\]
The journal entry at maturity will therefore be:
| Date | Account Titles and Explanation | Debit | Credit |
|--------------------|--------------------------------------|-------------|-------------|
| March 1, 2020 | Cash | €364,000 | |
| | Notes Receivable | | €350,000 |
| | Interest Receivable | | €14,000 |
These entries demonstrate the importance of tracking receivables and ensure that financial statements reflect true cash flows effectively.
Addressing Uncollectible Accounts
1. Estimation of Uncollectible Accounts
Uncollectible accounts pose significant risks to the financial integrity of businesses. Using the balance sheet approach, as highlighted with the example of the General Ledger and the determination of doubtful accounts amounting to €5,020, companies must adjust their allowance for doubtful accounts.
For cases where the Allowance for Doubtful Accounts holds:
- (a) A credit balance of €2,850 requires the company to adjust the allowance upwards.
\[
\text{Required Adjusting Entry} = \text{Doubtful Accounts} - \text{Existing Balance}
= €5,020 - €2,850 = €2,170
\]
| Date | Account Titles and Explanation | Debit | Credit |
|--------------------|--------------------------------------|-------------|-------------|
| Year-end | Bad Debts Expense | €2,170 | |
| | Allowance for Doubtful Accounts | | €2,170 |
- (b) Conversely, if there is a debit balance of €925, the amount to be adjusted will follow:
\[
€5,020 + 925 = €5,945
\]
The adjusting entry will therefore be:
| Date | Account Titles and Explanation | Debit | Credit |
|--------------------|--------------------------------------|-------------|-------------|
| Year-end | Bad Debts Expense | €5,945 | |
| | Allowance for Doubtful Accounts | | €5,945 |
These calculations underscore how crucial it is for organizations to maintain accurate accounts through adjustments in their allowance for uncollectible accounts.
Inventory Valuation Methods and Business Impacts
1. Compute Net Sales, Gross Profit, and Gross Profit Rate
To demonstrate the practical applicability of accounting methods, let’s compute for Miracle Corporation:
- Net Sales:
\[
\text{Net Sales} = \text{Gross Sales} - \text{Sales Returns} - \text{Sales Discounts}
= €1,700,000 - €52,500 - €30,000 = €1,617,500
\]
- Gross Profit:
\[
\text{Gross Profit} = \text{Net Sales} - \text{Cost of Goods Sold}
= €1,617,500 - €950,000 = €667,500
\]
- Gross Profit Rate:
\[
\text{Gross Profit Rate} = \frac{\text{Gross Profit}}{\text{Net Sales}} \times 100 = \frac{667,500}{1,617,500} \times 100 = 41.25\%
\]
These calculations provide insights into how pricing and cost strategies affect profitability.
2. Monthly Gross Profit for Computer Sales
When selling computers and software, if the average computer earns a 10% gross profit rate, while software achieves a 40% rate, the monthly gross profit can be calculated as follows:
- Gross Profit from Computers:
\[
\text{Gross Profit from Computers} = 150 \times €1,350 \times 10\% = €2,025
\]
- Gross Profit from Software:
\[
\text{Gross Profit from Software} = 150 \times €750 \times 40\% = €45,000
\]
Total monthly gross profit amounts to:
\[
\text{Total Monthly Gross Profit} = €2,025 + €45,000 = €47,025
\]
Perpetual vs. Periodic Inventory Systems
Businesses must evaluate their inventory needs based on nature and sales volume.
- A Jewelry Store: Given the high value and low turnover of jewelry items, a perpetual inventory system would provide an accurate and timely reflection of the inventory on hand, enabling effective management and loss prevention.
- A Roadside Vegetable Stand: With frequently changing inventory at lower value, a periodic inventory system may suffice, reducing overhead and managing costs effectively without the necessity for constant tracking.
Conclusion
Understanding and applying effective accounting practices in managing notes receivable and uncollectible accounts is vital for any organization. Furthermore, strategic inventory management directly influences profit margins—a key focus as companies seek to navigate complex financial landscapes. Grasping such concepts forms a crucial foundation for any accountant aiming for success within the field. These foundational knowledge components must evolve, paving the way for adaptable financial management in a dynamic business environment.
References
1. Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2018). Financial Accounting. John Wiley & Sons.
2. Needles, B. E., Powers, M., & Crosson, S. V. (2018). Financial Accounting. Cengage Learning.
3. Warren, C. S., Reeve, J. M., & Duchac, J. (2019). Accounting. Cengage Learning.
4. Horngren, C. T., Sundem, G. L., & Elliott, J. A. (2013). Introduction to Financial Accounting. Pearson.
5. Porter, G. A., & Norton, C. L. (2016). Financial Accounting. Cengage Learning.
6. Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2020). Managerial Accounting. McGraw-Hill Education.
7. McLaney, E., & Atrill, P. (2020). Accounting and Finance: An Introduction. Pearson UK.
8. Stickney, C. P., Weil, R. L., & Schipper, K. (2010). Financial Reporting, Financial Statement Analysis, and Valuation. Cengage Learning.
9. Bragg, S. M. (2017). Accounting for Inventory. Accounting Tools.
10. Schroeder, R. G., Clark, M. W., & Cathey, J. M. (2019). Financial Accounting Theory and Analysis: Text and Cases. Wiley.