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In addition to presenting the computed answers, please also discuss how you arrived at each answers the accounting problem asks. The accounting problem presents a company’s balance sheet and income statement. The Diamond Gem Cleaning and Maintenance Service Company is in the business of contracting its cleaning and maintenance services to office buildings. The balance sheet and income statement have blank lines. Determine the values that would be appropriate for each blank line. Provide a narrative of how you arrived at each value. In doing so, explain the account being valued and its relationship to the other financial data. For example, if the accounts payable line was missing, explain that you can derive its value based on knowing all the other values of the current liabilities section. Then explain what an account liability is, as well as why it would belong in the current liabilities section of the balance sheet

Please refer to the income statement and balance sheet of the Diamond Gem Cleaning and Maintenance Service Company available down:

Superior papers will mention and explain the following elements when responding to the assignment question:

Provide correct balances for the blank financial account lines.

Provide a narrative about how the values were determined.

Provide a definition and explanation of each account line that was completed

Balance sheet
ASSETS
CURRENT ASSETS
Cash 225,971
Contracts receivables [__A____]
Other assets 162,847
Total current assets 893,868
LONG TERM ASSETS
Equipment [___B____]
TOTAL ASSETS 1,180,660
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable [__C____]
Line of credit 85,000
Accrued expenses 72,495
Income tax payable 46,660
Current portion of notes payable 31,747
Deferred income taxes 78,460
Total current liabilities 571,697
LONG TERM LIABILITIES
Notes payable (long term) 172,467
TOTAL LIABILITIES 744,164
STOCKHOLDERS' EQUITY
Common stock 62,000
Additional paid-in capital 63,862
Retained Earnings [___D___]
Total stockholders' equity 436,496
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY [___E___]
Income sheet
Contract Revenues 5,146,862
Contract Costs [___F____]
Gross Profit 614,343
General and Administrative Expenses 322,356
Operating Income 291,987
Other Expense 25,770
Income Before Provision for Income Taxes 266,217
Provision for Income Taxes [__G____]
Net Income 150,767
Retained Earnings, Beginning Balance [__H____]
Net Income 150,767
Retained Earnings, Ending Balance 310,634

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28 Sep 2019

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PROJECT SUBMISSION PLAN

Project Part

Description/Requirements of Project Part

Evaluation Criteria

1

Title: Creating a Balance Sheet and Evaluating Inventory
You will be provided with financial information about a fictionalcompany. You will have to determine what information is relevantfor Project Parts 1 and 2.

Task 1: Create a balance sheet from a trial balance for a givenscenario. Make sure you classify the accounts appropriately ascurrent or non-current. Click here to download the trialbalance.

Page 1

AC1420: Project

Project Part

Description/Requirements of Project Part

Evaluation Criteria

Task 2: Perform inventory valuations using LIFO, FIFO, andweighted average methods based on the following information.Explain the impact of each method on the cost of goods sold andending inventory.

The company imports microwaves from a supplier in China for theUS market. At the end of the first quarter, 100 microwaves are instock. The company purchased a total of 400 microwaves during thequarter at various prices: January: 100 units @ $75

February: 250 units @ $83
March: 50 units @ $87
The company had no inventory at the beginning of the quarter.
Task 3: If the company’s goal is to maximize net income, whichevaluation method will you use and why?

Project Part 1 -Task 2:
Purchases Cost per Unit Total Cost
January
February
March
Ending Inventory =
Value of Ending Inventory of100 Units
Weighted AVG LIFO FIFO
Cost of Goods Sold (300 UnitsSold)
Weighted AVG LIFO FIFO
Create a BalanceSheet from the trial balance:
Debits Credits Classification
Cash 300,000.00 Current asset
Sales (10,000,000.00) Income statement
Cost of Goods Sold 7,000,000.00 Income statement
Selling Expenses 500,000.00 Income statement
Other income (50,000.00) Income statement
Administrative expenses 350,000.00 Income statement
Interest Expenses 12,500.00 Income statement
Land 300,000.00 non-current asset
Building 2,000,000.00 non-current asset
Long Term bond payable (550,000.00) non-current liability
Accrued Liabilities (50,000.00) current- liability
Accumulated Depreciation Buildings (250,000.00) non-current asset
Equipment 750,000.00 non-current asset
Receivables 100,000.00 current asset
Allowance for doubtful accounts (7,500.00) current asset
Accumulated depreciation equipment (125,000.00) non-current asset
Common Stock (200,000.00) equity
Payables (115,000.00) current Liability
Inventories 200,000.00 current asset
Prepaid Expenses 50,000.00 current asset
Retained Earnings (215,000.00) equity
11,562,500.00

(11,562,500.00)


Assets Equity and Liabilities
Current Assets Current Liabilities
Total Current Assets - Total Current Liabilities -
Total long term Liabilities -
Total property plant andequipment -
Total Equity -
Total Assets - Total Equity and liabilities -


The objective is to prepare a comprehensive balance sheetpresented in good form and derived from a list of various accounts.The amounts relative to each account will be given and the studentwill learn to determine whether an account is a balance sheetaccount or a temporary account that belongs to the incomestatement. The accounts will be comprised of all the varioussubgroupings in the balance sheet (current assets, investment,fixed assets, intangibles, and other assets, as well as currentliabilities, long-term liabilities, and the equity sections).Guidelines include the following. Obtain the list of accounts underthe section Course Project Listing of Accounts. Determine whichaccounts belong to the balance sheet and which accounts belong tothe income statement. Determine to which subgroup each accountbelongs. Arrange the accounts in proper order and functionality.Prepare a comprehensive balance sheet in good form. Prepare asingle-step income statement in good form. Put the Course Projectin the Dropbox for the project in Week 8. Grading Rubric CategoryPoints % Description Making proper selection of accounts relativeto the balance sheet or the income statement 30 20 From theprovided listing of accounts, determine which accounts are balancesheet accounts and which accounts are income statement accounts.Putting the accounts into the proper subgroup according tofunctionality 15 10 Each account belongs to a particular subgroup.The student is to determine to which subgroup the account belongs.This should be done according to functionality. Prepare the balancesheet in good form 45 30 Proper form is important in thepreparation of the balance sheet. Examples can be found in thetext. Prepare the income statement in good form 45 30 Proper formis important in the preparation of the income statement. Examplescan be found in the text. Ensuring that the balance sheet and theincome statement have been computed correctly 15 10 A quality paperwill meet or exceed all of the above requirements. Total 150 100Course Project Listing of Accounts Accounts Payable 197,532 AccountReceivable 165,824 Accrued Interest on Notes Payable 500 AccruedLiabilities 9,500 Accumulated Depreciations 341,200 AdditionalPaid-In Capital 37,500 Administrative Expenses 350,000 Allowancefor Doubtful Accounts 1,850 Building 975,800 Cash 42,485 CommonStock 400,000 Copyrights 105,000 Cost of Goods Sold 1,000,000Customer Deposits (expected to be paid next year) 420 Deposits WithVendors (based on a long-term purchase contract) 50,000Depreciation Expense (40% Selling, 60% Administrative) 100,000Dividend Income 30,000 Goodwill 100,000 Income Tax Expense 82,250Income Taxes Payable 62,520 Interest Revenue 25,000 Inventories499,493 Investments in Warren Co. 87,500 Land 125,000 MortgagePayable ($1,500 per month) 308,000 Notes Payable to Banks 50,000Notes Receivable (due next year) 23,000 Patents 125,000 PreferredStock, 7% 300,000 Prepaid Expenses 16,252 Rental Income 50,000Retained Earnings 162,582 Selling Expenses 300,000 Salaries Payable52,000 Sales Discounts 120,000 Sales Revenue 2,000,000 Securities(available for sale) at Fair Market Value 28,250 Trademarks 80,000Twenty-year, 12% Bonds, Due 1/1/2013 500,000

Following are comparative balance sheets for Millco, Inc., at January 31 and February 28, 2011: MILLCO, INC.Balance SheetsFebruary 28 and January 31, 2011 Assets February 28 January 31 Cash $ 42,000 $ 37,000 Accounts receivable 64,000 53,000 Merchandise inventory 81,000 94,000 Total current assets $ 187,000 $ 184,000 Plant and equipment: Production equipment 166,000 152,000 Less: Accumulated depreciation (24,000 ) (21,000) Total assets $ 329,000 $ 315,000 Liabilities Accounts payable $ 37,000 $ 41,000 Short-term debt 44,000 44,000 Other accrued liabilities 21,000 24,000 Total current liabilities $ 102,000 $ 109,000 Long-term debt 33,000 46,000 Total liabilities $ 135,000 $ 155,000 Owners' Equity Common stock, no par value, 40,000 shares authorized, 30,000 and 28,000 shares issued, respectively $ 104,000 $ 96,000 Retained earnings: Beginning balance $ 64,000 $ 43,000 Net income for month 36,000 29,000 Dividends (10,000 ) (8,000) Ending balance $ 90,000 $ 64,000 Total owners' equity $ 194,000 $ 160,000 Total liabilities and owners' equity $ 329,000 $ 315,000 Required:(a) Calculate the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (for example, the change in the amount of production equipment is not the result of both a purchase and sale of equipment). (Hints: What is the purpose of the statement of cash flows? How is this purpose accomplished?) Because the retained earnings section of the balance sheet is, in and of itself, an analysis of the change in the retained earnings account for the month, the row for net income and dividends should be entered as the February amount and not the change. Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item. (Negative amount should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.Omit the "$" sign in your response.) MILLCO, INC.Balance SheetsFebruary 28 and January 31, 2011 Assets February 28 January 31 Change Cash $ 42,000 $ 37,000 Accounts receivable 64,000 53,000 Merchandise inventory 81,000 94,000 Total current assets $ 187,000 $ 184,000 Plant and Equipment: Production equipment 166,000 152,000 Less: Accumulated depreciation (24,000 ) (21,000 ) Total assets $ 329,000 $ 315,000 Liabilities: Accounts payable $ 37,000 $ 41,000 Short-term debt 44,000 44,000 Other accrued liabilities 21,000 24,000 Total current liabilities $ 102,000 $ 109,000 Long-term debt 33,000 46,000 Total liabilities $ 135,000 $ 155,000 Owners' Equity Common stock, no par value, 40,000 shares authorized, 30,000 and 28,000 shares issued, respectively $ 104,000 $ 96,000 Retained earnings: Beginning balance $ 64,000 $ 43,000 Net income for month 36,000 29,000 Dividends (10,000 ) (8,000 ) Ending balance $ 90,000 $ 64,000 Total owners' equity $ 194,000 $ 160,000 Total liabilities and owners' equity $ 329,000 $ 315,000 (b) Prepare a statement of cash flows that explains above changes? (Negative amount should be indicated by a minus sign.Omit the "$" sign in your response.)MILLCO, INC.Statement of Cash FlowsFor the Month Ended February 28, 2011 Cash flows from operating activities: Net income $ Add (deduct) items not affecting cash: Net cash by operating activities $ Cash flows from investing activities: Purchases of production equipment Cash flows from financing activities: $ Net cash flows by financing activities Net in cash for the year $

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