ACCT300: Portfolio Project Option 2 (Link Works, Ace Construction Co & Seminole Co)

| November 24, 2016

Question
ACCT300 Principles of Accounting I

Week 8 Portfolio Project (Link Works, Ace Construction Company and Seminole Company Accounting Cases)

Portfolio Project Option #2: Link Works, Ace Construction Company and Seminole Company

Portfolio Project Option #2 is for accounting students who are intuitive learners by nature. You learn best from abstract materials like theories and concepts, enjoy challenges, and tend to be more innovative. For this assignment, you are required to complete all three accounting cases: Link Works, Ace Construction Company, and Seminole Company. You will then present the journal entries for Parts 1, 2, and 3 in PowerPoint format. Follow the additional instructions provided below.

Part 1:

Karla Tanner opened a web consulting business called Link Works and completed the following transactions during the first month of operations:

April 1: Tanner invested $80,000 cash along with equipment valued at $26,000 in the company.

April 2: Link Works pre-paid $9,000 for 12 months’ rent for their office space.

April 3: Link Works made credit purchases of $8,000 for office equipment and $3,600 for office supplies. Payment is due within 10 days.

April 6: Link Works completed services for a client and immediately received $4,000 cash.

April 9: Link Works completed a $6000 project for a client who must pay within 30 days.

April 13: Link Works paid $11,600 cash to settle the accounts payable created on April 3.

April 19: Link Works paid $2,400 cash for the premium on a 12-month insurance policy.

April 22: Link Works received $4,400 cash as a partial payment for the work completed on April 9.

April 25: Link Works completed work for another client for $2,890 on credit.

April 28: Tanner withdrew $5,500 cash from Link Works for personal use.

April 29: Link Works purchased $600 of additional office supplies on credit.

April 30: Link Works paid $435 cash for this month’s utility bill.

Instructions:

Prepare journals for the above economic transactions. Use the file called “Student Template” in the assignment section for Part #1, Link Works Co. Enter your journals to the general ledger using the same file name.

Part 2:

The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2013 fiscal year. The June 30, 2012 credit balance of the owner’s capital account was $52,900, and the owner invested $27,000 cash in the company during the 2013 fiscal year.

ACE CONSTRUCTION CO.

Unadjusted Trial Balance

June 30, 2013

No. Account Title Debit Credit

101 Cash 19,000

126 Supplies 7,000

128 Prepaid insurance 6,000

167 Equipment 139,290

168 Accumulated Depreciation – Equipment 22,000

201 Accounts payable 6,200

251 Long-term notes payable 21,000

301 V. Ace, equity 79,900

302 V. Ace, withdrawals 26,500

401 Construction fees earned 144,000

623 Wages expense 49,000

633 Interest expense 2,310

640 Rent expense 13,000

683 Property taxes expense 4,100

684 Repairs expense 2,600

690 Utilities expense 4,300

Totals $273,100 $273,100

Instructions:

a) Journalize the following adjusting entries as of fiscal year-end June 30, 2013.

b) Post the adjusting entries to an unadjusted trial balance and prepare the adjusted trial balance.

c) Create financial statements.

Adjustments:

1. The supplies available at the end of fiscal year 2013 had a cost of $2,520.

2. The cost of expired insurance for the fiscal year is $3,780.

3. Annual depreciation on equipment is $8,700.

4. The June utilities expense of $520 is not included in the unadjusted trial balance, because the bill arrived after the trial balance was prepared. The $520 amount owed needs to be recorded.

5. The company’s employees have earned $1,500 of accrued wages at fiscal year-end.

6. The rent expense incurred and not yet paid or recorded at fiscal year-end is $300.

7. Additional property taxes of $800 have been assessed for this fiscal year, but have not been paid or recorded in the accounts.

8. The $210 accrued interest for June has not yet been paid or recorded.

Part 3:

Seminole Company began year 2013 with 23,000 units of product in its January 1 inventory, at a cost of $15 for each unit. It made successive purchases of its product in year 2013, as follows. The company uses a periodic inventory system. On December 31, 2013, a physical count reveals that 40,000 units of its product remain in inventory.

7-Mar 30,000 units @ $18 each

25-May 39,000 units @ $20 each

1-Aug 23,000 units @ $25 each

10-Nov 35,000 units @ $26 each

Show all of your work integrated into a PowerPoint presentation for the following tasks:

1. Compute the number and total cost of the units available for sale in year 2013.

2. Compute the amounts assigned to the 2013 ending inventory, and the cost of goods sold for FIFO, LIFO, and weighted average.

3. The 110,000 units sold are $35 each. Prepare comparative income statements for the three inventory costing methods of FIFO, LIFO, and weighted average, which include a detailed cost of goods sold section as part of each statement. (Round your average cost per unit to 2 decimal places.)

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