2019 Sally\'s Ice Cream Parlour Assignment PDF

Preview

Summary

Sally is deciding to open a new business. You need to help her to account the cash movement....

Description

Accompanying material for the ebook Introduction to Financial Accounting in the 21st Century – Gaber & Porporato, 5th Edition McGrawHill

Term Project: Part A Understanding Financial Statements Locate and use an annual report STEP 1: The Company Assigned to you Find the most recent audited annual financial statement online for the Canadian public company assigned to the last digit of your student number as per the version table (or industry) selected by your professor. Example: if your student number is 1234567, the last digit of your student number is 7 and the company assigned to you is Xplore Technologies Corp.

The audited annual financial statement obtained from SEDAR must contain audited financial statements and the MD&A (management's discussion and analysis). In SEDAR you should look for the Audited Annual Financial Statements. If complementary data is needed to answer any of the questions of steps 2 and 3, you can look at any of the following complementary documents: Annual Report, MD&A or Annual Information Form.

Industry: Last digit of your student number 0 1 2 3 4 5 6 7 8 9

Company Assigned Advanced Micro Devices, Inc. Oracle Corporation Shopify Inc. Evolution Blockchain Group Inc. Adobe Systems Incorporated CAE Inc. Pixelworks, Inc. Xplore Technologies Corp. Celestica Inc. Profire Energy, Inc.

IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill 1|P a g e

STEP 2: Write the cover of your report In one page maximum indicate the following: a. the full and legal name of the Company b. the exact website address of the company (URL) c. describe the business or type of activity of the assigned company in your own words (minimum 100 words, maximum 300 words). Do not copy or cut and paste from any document available on the internet; doing so is a breach of intellectual property. d. properly identify the period of the audited annual financial statements. e. the exact website address of all the documents consulted in SEDAR (URL) f. provide your name, student number, course, section and term.

STEP 3: Write the report In your report it is required to copy the questions listed below, provide the answer to each question, and indicate in which page number of the audited annual financial statements the answer you provide is found. Find the data for the most recent year: 1)

Net Income before Income Tax (do not consider comprehensive income)

2)

Total of Depreciation Expense (or Amortization)

3)

Property, Plant and Equipment (net book value)

4)

Diluted Earnings per Share

5)

Current Assets

6)

When was the MD&A dated?

7)

Retained Earnings

8)

Who was the auditor?

9)

Who was the Chair of the Board of Directors at the time the audited annual financial statement was issued?

10) What was the change in total net Revenue during the year from the preceding year?

STEP 4: Prepare the report as a Word Document. Submit it following the instructions of your course/professor IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  2|P a g e 

Accompanying material for the ebook Introduction to Financial Accounting in the 21st Century – Gaber & Porporato, 5th Edition McGrawHill

Term Project: Part B Use accounting software for bookkeeping The objective of this part is to afford students the opportunity to use accounting software so you appreciate the extent to which technology has completely transformed accounting. While the need for judgment and decisions will never disappear, the bookkeeping aspects of accounting have been largely automated. The term project requirements just scratch the surface in terms of showing the capabilities of accounting software. We hope you will take the time to view all the tutorials and do some clicking around to try out even more features. Completion of this part B requires you to identify and use the last digit of your student number. Those that have a 0 (zero) as the last digit, must use a very specific proxy number as the last digit for all transactions in this part B only. The exact number/digit is provided in Step 3.

STEP 1: Acquire access to any commercial accounting software package that you do not have to purchase. STEP 2: Use your software to create a set of books for a fictional company that includes your name and student number with the fiscal year end of December 31st of the current year. Many products have 'wizards' or tutorials to lead you through this process. STEP 3: Post the following transactions using the 'general journal entry' option rather than ‘specialized journal’ option. Hint: If you are being prompted to enter customer or supplier name and address information, most likely you are not using the 'general journal entry' option, and are doing more than is required in this assignment (students with last digit 0 shall use 9 as their last digit): 1. The owner contributes to the company 500 times the last digit of your student number in cash. Example: if your student number is 1234567, the cash contributed by the owner must be $3,500 (students with 0 as the last digit must use 9 as the last digit for all transactions in part B). 2. A purchase in cash of goods for resale for an amount equal to 300 times de last digit of your student number (perpetual inventory method is used). 3. Receive an invoice to pay next month the purchase of a machine that you have been using this period, IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  3|P a g e 

resulting in you owing an amount equal to 100 times the last digit of your student number. 4. Sold on account half of the goods held for resale (inventory) purchased have been used for an amount equal to 200 times the last digit of your student number. 5. Depreciation of the machine for an amount equal to one tenth of the acquisition cost.

STEP 4: Prepare and print the Income Statement and Balance Sheet for the period and also your general journal showing your journal entries. STEP 5: Organize and submit the document as a PDF document. Follow the submission instructions of your course/professor.

Additional Instructions/guidance (as of 2019): If you are unsure where to start and how to approach this task, we can suggest the following: #1: get a 30-day free trial of Quickbooks online at https://quickbooks.intuit.com/download-quickbooks/ http://www.quickbooksoffer.com/?cid=irp-4337#pricing and select Essentials #2: Quikbooks has 'wizards' and tutorials built in. As an alternative you can check any of the following publicly available resources/tutorials: https://www.youtube.com/watch?v=lJfvqF2TDzw https://www.youtube.com/watch?v=HQwzVJMijkw https://www.youtube.com/watch?v=R247wAd7lko #3: Post the transactions using the 'general journal entry' option rather than ‘specialized journal’ option. #4: Prepare and print the Income Statement and Balance Sheet for the period and also your general journal showing your journal entries. Hint: print them as pdf files #5: Use the Tools menu of Adobe to create one file merging the print outs done in step 4. If titles or headings are needed you can either work in Word and then print in pdf and merge all in one file, or you can add a text box within the pdf file when using the Tools of Adobe. Submit.

IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  4|P a g e 

Accompanying material for the ebook Introduction to Financial Accounting in the 21 Century – st

th

Gaber & Porporato, 5 Edition McGrawHill 

TermProject:PartC Bookkeeping for a small business organization  Sally’sIceCreamParlour* Sally Barnesathird yearAccountingstudent finishedherexams early from York UniversitythisyearandwentbackhometoHuntsvilleOntariotolookforasummer job.IfSallydoesn’tfindajobintownshewouldhavetoworkinthefamiliesIce Cream factory, and outlet store. Barnes Artisan All‐Natural Ice Cream uses milk from Jersey cows which is the best for making ice cream from local farmers to manufacture fresh custom Ice Cream for Restaurants and specialty stores in SouthernOntario. GoingbackandlivingathomewassocomfortingandnicesinceHuntsvilleduring thesummerisahotbedofalltypesofactivities.ShestartedwalkingdownMain Streetwithherresumeinhandlookingandapplyingforasummerjob.Thetown of Huntsville has over 20,000 plus residence and another 25,000 from the surroundingcottages.Itisbusyforthreeseasonsayearwithsomethinggoingon everyFriday,SaturdayandSunday.Alothaschangedwiththe“HuntsvilleFestival oftheArts”runningdailyfortheentiremonthsofJulyandAugusttoLabourDay weekend.“ConcertsintheParkandontheDocks”everyWednesdayatnoonand night,startinginMayuntiltheendofAugust,andherfavoritegrowingupaschild wasThursdayNightmoviesintheParkallsummerlong.  *CasecontributedbyJohnKucharczuk,usedwithpermission.

IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  5|P a g e 

SallywalkedintothecornerDrugStorelocatedonMainStreetbesidetheSwing BridgeandtheParkwerealloftheSummeractivitieshappen,whereshehadher firstParttimejobwhenshewasahighschoolstudent.Dr.BobWilderownsthe drugstorewhichhasbeeninthefamilyforover80years.Intheearly1940’sBob’s grandfatherbuiltafullyfunctionalIceCreamParlorinthefronthalfofthestore withacounterandsixicecreamparlortypestools.Dr.WilderwastalkingtoTed LeethelocalhandymanaboutredesigningthestoreandwantedtomaketheIce CreamParlorsmallersinceitwasseasonal,takingtoomuchofhistimemanaging thestaffattheIceCreamstand,handlingdifferentoperationalissuesandtaking uptoomuchofthefloorspaceinthestoreyearround. ItwasperfecttimingwhenSallywalkedintotheDrugStore.Sallyoverheardthe conversationbetweenDr.WilderandTedabouttheredesigningoftheIceCream parlorandtheproblemshehadmakingitwork. Sallywasthinkingoutloudandsaidthissoundedlikearealbusinessopportunity. ShecouldpurchasetheIceCream,cups,spoons,cones,andothermaterialfrom thefamilybusiness,rentthefloorspaceatthedrugstore,hireherownstaff,and havedifferenthoursthantheDrugStoresothebusinesscanbeopenforbusiness whentheactivitiesintownareon. SheapproachedbothDr.WilderandTedto bringupheridea.Afterhearingthe details,Tedsuggestedthatthiscanbedonebyplacingamovablewallbetweenthe DrugstoreandtheIceCreamParlorsectionofthestore,placingwheelsontheIce CreamfreezersforscoopingIceCream,byaddinganotherdoortothefrontofthe store, and then placing the movable wall between the two doors and the wall wheretheIceCreamParloris.Tedsaidthatthisdesignwouldallowonetogointo eitherstorewhentheotherisnotopen,alsobyplacingthewheelsonthefreezers thencanbemovedtothewalltosaleIceProductsinthewintersinceIceCream ParlorwouldbeopenfromtheMay1sttoOctober31st.     IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  6|P a g e 

Notetostudents: Some invoices, payments and taxes will require you to use a part of your student number. For example: the owner contributes to the company 300 times the last digit of your student number in a piece of equipment. If your student number is 1234567, the owner’s contribution is $2,100 ($300 times 7 = $2,100), for the students with 0 as the last digit must use 3 as the last digit for all transactions.

  Sally had a meeting with the Accountant and explained in great detail what happenedduringthefirstmonthofthebusinessfromherpersonaldailydiary. She also gave the Accountant a shoe box full of Invoices and receipts she has collectedduringthemonth. Thefollowingarethe Accountantsnotesfromthe meetingat10:00amJune 1, 2018. Sallycalled hermother about thisbusinessventure whocongratulated her on a greatidea.Mrs.BarnessuggestedtoSallythatthefamilyIceCreambusinesscould supplyIceCreamproductsinthefreezerunderconsignmentforNovembertoApril sincethefreezerscanmoveagainstthewall.

IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  7|P a g e 

ThenextdaySallymetwithDr.Wildertoworkoutthedetails.Themeetingwas veryproductive,andtheyagreedtothefollowing:  Dr.Wilderwouldpayforthedesignwork,themovablewall,plumbing,doors, wheelsonthefreezerthatisownedbyDr.Wilder,installationofsignstothe store,andanyotherforthenewIceCreamParlor.  Sallywouldpayrentof$600permonthbeforethestartofeachmonthfor thenextmonthtoDr.Wilder.Therentincludedthefrontofthestorewhere theIceCreamParlourisandasmallsupplyroomforstorageandtoplace anotherfreezerforextraIceCream.  Afeeof4%ofmonthlygrosssaleswillbepaidtoDr.Wilderforthecleaning oftheIceCreamParlorarea,electricity,water,internet,useoftheIceCream freezersownedbytheDrugstore,andgarbageremoval.Thisistobepaidon thefirstdayofthemonthonlastmonth’ssales.  AllotherexpensesfortheParlorwillbepaidbySally. April22‐29,2018 Ordered three signs from Huntsville Sign Company for the business, one to be placedoverthecounterthathasthepricelist,asandwichboardsignwillbeplaced outsidewhenthestoreisopenforbusiness,theothertobeplacedontheoutside ofthebuilding,thesesignswillbeusedallyearroundsinceIceCreamwillbesold in the Drug store on consignment from November to April. Purchase price of all signsis$1,000plus100timesthelastdigitofyourstudentnumber.Thesignswill lastthreeyearsbeforeneedingreplacement.Tobepaidinfullupondelivery. Conducted interviews and hire students that will make $16.00 per hour, an assistant manager will make $20.00 an hour to work when Sallyis not working. Sincethestudentswillbeworkinglessthan20hoursperweek,withholdtaxesand othersourcedeductionsarekepttoaminimum.TheIceCreamParlourwillbeopen sevendaysaweekfromMay1sttoOctober30th,payrollwagecostwillbe$675.00 perdayfromMay1sttoSeptember6th.AfterSeptember6ththeIceCreamParlour will require only one person to operate and two people on the weekends. All studentshiredwillstartworkingMay1st.Theemployerwillbepaying10%plusthe IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  8|P a g e 

lastdigitofyourstudentnumber(1X%)inbenefitsforeachemployeeoftheirgross wage.Withholding incometaxesare collectedby theemployeron behalf of the employee.Employerwillbecollectinga%equaltothelastdigitofyourstudent numberofincometax.TheseBenefitsandIncometaxesarepayable45daysafter dateonpaycheque.TheemployeesfirstpaychequewillbedatedMay14thforthe firstweekofwork(7days)andeverytwoweeksafterthat. Madearrangementswithherparentsforthepurchaseofsuppliesandicecream, Sallywillpaywholesaleprice(itisestimatedtobecostplus10%),itmustbepaid infull10daysafterreceived,allpurchaseswillbeinvoicedattheactualwholesale pricewhenreceived.Sincesheisfamily,herfatherwouldgivehernextmorning deliverybeforetheParlouropens.Herfathersuggestedforinventorykeepingthat alloftheIceCreamrelatedinventoryitemscanbekepttogetherasoneamount (thevalueofalltheIceCream,Cones,spoons,andsyrupbeonelumpsum).Barnes Ice Cream does this for the Factory store and makes inventory record keeping easier. May1,2018 Borrowed$10,000fromhermotherattherateofX%whereXisthelastdigitof yourstudentnumberperannum.Tohavemoneytostartthebusiness.Tobepaid December1st2018withallinterest.ThisloanwasusedtoOpenedaBankaccount forthebusiness. TheBankgaveSally100ChequesforopeningtheBusinessBankaccount.Sallyalso negotiatedfortheuseofCreditcarddeviceandprocessing,oncethecreditcard sales aredeposited to thebank there will bea charge of 5% forthe credit card deposit.Thebankalsooffereda$25,000LineofCreditat8%ifthebusinessneeded it. WhileatthebankSallywithdraw$200.00tobethefloatforthePettyCashBox. ShewillpurchasetheLockBoxlaterintheweek. Wrote cheque #1 to pay Dr. Wilder the first and last month’s rent. As per the agreement. IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  9|P a g e 

HuntsvilleSignCompanydeliveredthesign,asperagreement. May2,2018 Sally’sfirstorderwasreceivedasfollows:16drumsofIceCream@$38.00each, 800cones@$0.25each,600wafflecones@$0.70eachwafflecones,500sample spoons@$0.08each,Chocolatedippingsyrup3drums@$33.00each,200sundae cups@$0.05each,200sundaespoons@$0.02each,and5packagesofsundae toppings@$17.00each,fromBarnesIceCream(thefamilybusiness). Purchasedandpaidbychequeausedcashregister(fouryearsold)fromHuntsville UsedBusinessEquipment.Whennewthecashregistercostpricewas$8,400with expectedlifeof10years,thecashregisterisestimatedtohavea6‐yearlife.The chequewaswrittentoHuntsvilleUsedBusinessEquipmentthatday. Sallyneededacomputerforthebusiness,soshegavethebusinesshercomputer, monitor,andcolourprinter,whenshepurchaseditAugust2,2017atBestBuy’s BacktoSchoolsalethepackagewasonsalefor$1,500regularpricewas$2,100. TheComputerGeekatBestBuysaidthenewcomputer,monitor,andprinterwould last5yearswhenitwaspurchased.  May3,2018 PaidoutofPettyCash$179.00toStaplesforofficesupplies–1,000sheetspaper for$10.00,twoprintertonersfor$130.00,6rollsofpaperforcashregister$6.00, $21.00for LockBoxfor PettyCash andassortedofficesupplies ofpens, pencils, paperclips,andpost‐it‐notesfor$12.00 May4,2018 Sallyprintedfromherprinter500flyerstoadvertisingtheNewIceCreamParlour withitshoursofoperationsforMayandJune.SheusedpaperacquiredatStaples for$5.00andonecolourcartagefor$65.00. Purchased a freezer from Leon’s furniture, paid by cheque, and delivered the freezertostorethatafternoon.Thecostofthefreezerwas250timesthelastdigit IntroductiontoFinancialAccountinginthe21stCentury–Gaber&Porporato,5thEdition©McGrawHill  10|P a g e 

of your student number, and expected to last 10 years. Since Sally knows the manager of Leon’s Furniture, they accepted a cheque for the payment of this purchase. Purchasedadvanceadvertisingtotaling$1,080fortwiceamonthadplacementin MuskokaRegionalnewspaperforsixmonths$90perissue.Firstnewspaperadto appearMay14th. May5,2018 Businessinsuranceforsixmonthsprepaidfor30timesthelastdigitofyourstudent numberplus$1,000. Cellphone$75.00permonthandpaidfirstandlastmonthaspre‐two‐yearcontract, thispackageincludedalllong‐distancecallsinCanadaandunlimiteddayandnight calling,and6Gofdata. Ma...