Journal Entriesdec1cash60000common Stock600002prepaid Rent18000cash180 ✓ Solved

Journal Entries Dec 1 Cash 60000 Common Stock Prepaid Rent 18000 Cash Office Equipment 17500 Cash Office Supplies 1500 Accounts Payable Prepaid Insurance 3600 Cash Salaray Expense Cash 24 Cash 54000 Commission Revenue Salaray Expense 12125 Cash Repair Expense 350 Cash Telephone Expense 450 Cash Dividends 3000 Cash Unadjusted Trial Balance Trap Adventures, Inc. Unadjusted Trial Balance December 31, 2015 Cash $ 48,225 Prepaid Rent 18,000 Prepaid Insurance 3,600 Office Supplies 1,500 Office Equipment 17,500 Accounts Payable $ 1,500 Common Stock 60,000 Dividends 3,000 Commission Revenue 54,000 Salary Expense 22,875 Repair Expense 350 Telephone Expense 450 Totals $ 115,500 $ 115,500 Adjusting Entries Dec 31 Insurance Expense 300 Prepaid Expense Rent Expense 3000 Prepaid Rent Office Supplies Expense 900 Office Supplies Depreciation Expense 325 Accumulated Depreciation Salary Expense 525 Salary Payable 525 Adjusted Trial Balance Trap Adventures, Inc.

Adjusted Trial Balance December 31, 2015 Cash $ 48,225 Prepaid Rent 15,000 Prepaid Insurance 3,300 Office Supplies 600 Office Equipment 17,500 Accumulated Depreciation 325 Accounts Payable $ 1,500 Salary Payable $ 525 Common Stock 60,000 Dividends 3,000 Commission Revenue 54,000 Salary Expense 23,400 Repair Expense 350 Telephone Expense 300 Insurance Expense 450 Rent Expense 3,000 Office Supplie Expense 900 Depreciation Expense 325 Totals $ 116,350 $ 116,350 Financial Statements Trap Adventures, Inc. NOTE that there are THREE Statements included on this sheet. Income Statement For the year ended December 31, 2015 Revenues: Commissions Revenue $ 60,000.00 Expenses: Salary Expense $ 23,400.00 Repair Expense 350 Telephone Expense 450 Insurance Expense 300 Rent Expense 3000 Office Supplies Expense 900 Depreciation Expense 325 Total Expenses 28,725 Net Income $ 31,275 Trap Adventures, Inc.

Statement of Stockholder's Equity For the year ended December 31, 2015 Common Stock Retained Earnings Totral Stockholder's Equity Beginning Balance, December 1, 2015 $ - 0 $ - 0 $ - 0 Add issuance of common stock 60,,000 Add net income 31,,275 Less dividends (3,,000) Ending Balance, December 31, 2015 $ 60,000 $ 28,275 $ 88,275 Trap Adventures, Inc. Balance Sheet December 31, 2015 Assets Liabilities Current Assets: Current Liabilities: Cash $ 48,225 Accounts Payable $ 1,500 Prepaid Rent 15,000 Salary Payable 525 Prepaid Insurance 3,300 Total Current Liabilities $ 2,025 Ofiice Supplies 600 Total Current Assets $ 67,125 Long-term Assets: Office Equipment $ 17,500 Less Accumulated Depreciation (325) Stockholder's Equity Total Long-term Assets $ 17,175 Common Stock $ 60,000 Retained Earnings 28,275 Total Stockholder's Equity 88,275 Total Assets $ 84,300 Total Liabilities and Stockholder's Equity $ 90,300 Closing Entries Dec 31 Retained Earnings 28725 Salary Expense 23400 Repair Expense 350 Telepohone Expense 450 Insurance Expense 300 Rent Expense 3000 Office Supplies Expense 900 Depreciation Expense Commission Revenue 54000 Retained Earnings Retained Earnings 3000 Dividends 3000 Post-Closing Trial Balance Trap Adventures, Inc.

Post-Closing Trial Balance December 31, 2015 Cash $ 48,225 Prepaid Rent 15,000 Prepaid Insurance 3,300 Office Supplies 600 Office Equipment 17,500 Accumulated Depreciation $ 325 Accounts Payable $ 1,500 Salary Expense 525 Common Stock $ 60,000 Retained Earnings 22,275 $ 84,625 $ 84,625 Writing Portion NOTE that this tab should be used for the writing portion of the Unit 5 IP Assignment. Answer two of the questions below in 1-2 fully developed paragraphs. A fully developed paragraph should have a major point with 3 to 5 support sentences. One or two sentences is not acceptable or does not discuss the question. Be sure to show what you know!!!

1. Trap Adventures, Inc. is looking for an accountant. In your own words, explain to Trap’s hiring team the role of accountant and accounting within business. Provide examples of the expectations of the accountant. 2.

Discuss the financial position of Trap Adventures, Inc using the following ratios: Current ratio Return on equity For each ratio, provide the calculation and an explanation of the meaning. Is this a positive or negative result for the Trap Adventures, Inc.? 3. Using Trap Adventures, Inc.’s income statement, evaluate the operations for the month of December. Complete a common-size income statement using sales as the base number.

What is the largest percentage? What is the smallest percentage? What recommendations could be made to increase Trap’s net income? 4. Currently, Trap Adventures, Inc. does not own any loans or bank notes (long-term liabilities).

What would happen if Trap decides to obtain a bank loan for ,000 to fund daily operations? How would this transaction impact the financial statements – which accounts would be affected? What is the debt to equity ratio? What does the debt to equity ratio represent? Describe the origins of mathematical induction.

Who were the first people to use it and to which problems did they apply it?Writing Assignments Requirements Each writing assignment is worth 20 pointsshould include the following sections: Background (3 points): This is a discussion of how thenon-â€mathematical and mathematical portions of your topic fit together. You might include a historical background of the topic, definitions of terms, the discrete mathematic sideas that are addressed(e.g. induction, logical fallacy, etc.), and some explanation about why these ideas were useful. Examples (10 points): In most of your writing assignments you are asked to discuss and describe an aspect of discrete mathematics. Give two of three examples or techniques of the topic under discussion.

Give generalinformation and also specific examples of the topic. Bibliography(2 points): List the references you used to complete this report. Just list title and author for any books and articles you used. You should also include a list of people that you consultedor any other form of help that you received. For example, you might obtain some of your information from the internet; in this case, you could include the website.You'll need at least one bookor articleas a reference, preferably two, and a total of at least two references.

You'll notice that there are still 5 points unaccounted for. The remaining 5 points are for style: clarity, neatness, flow, design, organization and creativity-â€-â€it's important to be able to communicate your ideas.Note:you don't haveto put your report in the precise order given above. You may prefer to use the assigned problems to illustrate how the ideas of the subject fit together with the mathematical ideas that you will be using, in which case Background and Exampleswould be interwoven. Just make sure that these aspects appear in your report.

Paper for above instructions

Background

Accounting is a critical function in any business, as it serves to record, report, and analyze financial transactions and is vital for making informed managerial decisions. An accountant's role goes beyond simple record-keeping; it includes ensuring compliance with legal regulations, providing insights into financial performance, and assisting in strategic planning. The discipline encompasses various subfields including financial accounting, management accounting, tax accounting, and audit. This broad framework results in a comprehensive financial picture that stakeholders can utilize (Kimmel, Weygandt, & Kieso, 2019).
Effective accounting requires a structured approach and systematic techniques like double-entry bookkeeping, which ensures that every financial transaction affects at least two accounts and promotes accuracy (Horngren, Sundem, & Stratton, 2014). Accountants also prepare critical financial documents such as income statements, balance sheets, and cash flow statements, which collectively present a company’s financial health. Furthermore, they serve as advisors to management, using data analytics and financial modeling to forecast trends, interpret financial results, and guide resources for optimal performance (Reckers, 2016).

Example of Accountant Expectations

In the context of Trap Adventures, Inc., which has displayed transparency and thoroughness in its record-keeping, it is essential to provide an example of the expectations of an accountant. For instance, while assembling the income statement for December, the accountant would need to ensure that revenue from commission is accurately reported and reflect all associated expenses necessary for the operation (Trap Adventures, Inc. Income Statement, 2015). The calculations must be precise, and the accountant would routinely validate the financial adjustments made monthly, analyzing the nature of each expense, such as salary, rent, and supplies, to ensure accuracy.
Additionally, an accountant must demonstrate a high level of ethics, integrity, and professionalism. They are responsible for ensuring that the financial records comply with the Generally Accepted Accounting Principles (GAAP). For example, expenses must be matched with revenues in the income statement to reflect the true performance of the business, which is fundamental for stakeholders assessing the company's viability.

Financial Analysis of Trap Adventures, Inc.

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations. It is calculated as follows:
\[
\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}} = \frac{67,125}{2,025} \approx 33.1
\]
A current ratio of 33.1 indicates that Trap Adventures, Inc. has significantly more current assets than liabilities, suggesting excellent short-term financial health. Typically, a current ratio over 1 is considered positive as it shows that the company can cover its current liabilities comfortably (Brigham & Ehrhardt, 2016). Hence, this reflects positively on the company’s position, making it a safe investment.

Return on Equity (ROE)

The Return on Equity (ROE) is calculated to evaluate how effectively management uses a company’s assets to create profits. The formula for ROE is:
\[
\text{ROE} = \frac{\text{Net Income}}{\text{Shareholder's Equity}} = \frac{31,275}{88,275} \approx 35.4\%
\]
A 35.4% ROE indicates that Trap Adventures is effectively generating a profit relative to its equity. An ROE above 15% is typically favorable for investors, demonstrating that the company is utilizing its capacity to maximize profitability (White, Sondhi, & Fried, 2003). Thus, this strong ROE suggests a promising operational efficiency and attractiveness for potential investors.

Recommendations for Improvement

To enhance Trap’s net income further, the company might consider reducing excess operating expenses without compromising service quality. For example, the largest expense in the income statement, the salary expense, could be reviewed for potential optimization, perhaps entrusting certain non-critical tasks to part-time staff instead of full-time employees (Brealey, Myers, & Marcus, 2011). In addition, increasing commission revenue by expanding marketing efforts or extending services could drive up revenue growth.

Conclusion

As evidenced in the analysis, both the position of an accountant and the financial evaluation of Trap Adventures, Inc. reveal the interconnectedness of accurate accounting and strategic financial management. The company's liquidity and profitability are strong, indicating a healthy operation with room for growth through cost management and revenue enhancement initiatives.

References

1. Brigham, E. F., & Ehrhardt, M. C. (2016). Financial Management. Cengage Learning.
2. Brealey, R. A., Myers, S. C., & Marcus, A. J. (2011). Fundamentals of Corporate Finance. McGraw-Hill.
3. Horngren, C. T., Sundem, G. L., & Stratton, W. O. (2014). Introduction to Management Accounting. Pearson Education.
4. Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2019). Financial Accounting. Wiley.
5. Reckers, P. M. (2016). “The Role of the Accountant in Strategic Operations Management.” Journal of Managerial Issues, 28(2), 35-46.
6. White, G. I., Sondhi, A. J., & Fried, D. (2003). The Analysis and Use of Financial Statements. Wiley.
7. Financial Accounting Standards Board (FASB). “The Role of Accountants in Business.” Retrieved from [www.fasb.org](http://www.fasb.org).
8. American Institute of Certified Public Accountants (AICPA). “Understanding Financial Ratios.” Retrieved from [www.aicpa.org](http://www.aicpa.org).
9. International Accounting Standards Board (IASB). “The Importance of Accountancy in Business.” Retrieved from [www.ifrs.org](http://www.ifrs.org).
10. AccountingTools. "What is the Current Ratio?" Retrieved from [www.accountingtools.com](https://www.accountingtools.com).