Instructions for the Microsoft Excel Templates This workbook (and only this workbook) should be submitted

| November 9, 2018

Instructions for the Microsoft Excel TemplatesThis workbook (and only this workbook) should be submitted for grading.Assignment detail and information is contained within this workbook.You should enter your name into the cell at the top of the page.Each worksheet contains the identification of the problem or exercise.In general, the yellow highlighted cells are the cells which work and effort should be presented.All formatting should have been accomplished to provide satisfactory presentation. See the text for additional assistance informatting.Place the proper account title in the cell where the word "Account title" appears on the template.Place the value in the cell where the word "Value" or "Amount" appears on the template. A formula may be placed in someof these cells.Write a formula into cells where the word "Formula" appears.Place the explanation for the entry in the cell where the word "Text Explanation" appears on the template.The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required.The problem is formatted for whole dollars with comma separations (no cents) except where required.Negative values may be shown as ($400) or -$400.Consider using "Split" panes to assist in copy and paste of data.Much of the exercises and problems can have data entered by the "look to" or "=A34" type formula where cell A34 containsthe data to be entered. This precludes typing and data entry errors.Team #:Exercise:W3-T1 Statement and Note Disclosure, LCM, and Purchase Commitment (Chapter 9)ABC Company manufactures three models of gear shift components for bicyclesthat are sold to bicycle manufacturers, retailers and catalog outlets. Since beginningoperations in 1985, Baileys has used normal absorption costing and has assumed afirst-in, first-out cost flow in its perpetual inventory system. The balances of theinventory accounts at the end of Bailey’s fiscal year, September 30, 2014, are shownbelow. The inventories are stated at cost before any year-end adjustments.Finished goodsWork-in-processRaw materialsFactory supplies$717,000122,500240,00079,000The following information relates to Bailey’s inventory and operations.1) The finished goods inventory consists of the items analyzed below.CostDown tube shifterStandard modelClick adjustment modelDeluxe modelTotal down tube shiftersBar end shifterStandard modelClick adjustment modelTotal bar end shifters$$$$Market77,500 $104,500118,000300,000 $77,00097,000120,000294,00093,000 $109,000202,000 $100,050107,550207,60087,650129,300216,950718,550Head tube shifterStandard modelClick adjustment modelTotal head tube shifters$88,000 $127,000215,000 $Total finished goods$717,000 $$2) One-half of the head tube shifter finished goods inventory is held bycatalog outlets on consignment.3) Three-quarters of the bar end shifter finished goods inventory has beenpledged as collateral for a bank loan.4) One-half of the raw materials balance represents derailleurs acquiredat a contract price 20 percent above the current market price. Themarket value of the rest of the raw materials is$127,4005) The total market value of the work-in-process inventory is$118,7006) Included in the cost of factory supplies are obsolete items with anhistorical cost of $5,200 . The market value of theremaining factory supplies is$75,900 .7) ABC applies the lower-of-cost-or-market method to each of thethree types of shifters in finished goods inventory. For each of thethree inventory accounts, ABC applies the lower-of-cost-ormarket to the total of each inventory account.8) Consider all amounts presented above to be material in relationto ABCs’ financial statements taken as a whole.Instructions:a) Prepare the inventory section of ABC’s balance sheet as ofSeptember 30, 2014, including any required note(s).b) Without prejudice to your answer in (a), assume that the marketvalue of ABC’s inventories is less than cost. Explain how thisdecline would be presented in ABC’s income statement forthe fiscal year ended September 30, 2014.c) Assume that ABC has a firm purchase commitment for thesame type of derailleur included in the raw materials inventoryas of September 30, 2014, and that the purchase commitmentis a contracted price 15% greater than the current marketprice. These derailleurs are to be delivered to Baileys afterSeptember 30, 2014. Discuss the impact, if any, that this.purchase commitment would have on Bailey’s financialstatements prepared for the fiscal year ended September 30, 2014.a)ABC CompanyBalance Sheet (Partial)September 30, 2014Current assets:Inventory SectionDescriptionDescriptionDescriptionDescriptionTotal inventoriesAmountAmountAmountAmountFormulaNote 1:Note 2:Supporting CalculationsFinished Goods Work-in-processItem DescriptionTotalsb) Explanation:c)Amounts$Raw MaterialsFactory SuppliesAmountsAmountsAmounts-$-$-$-Team #:Exercise:W3-T2 Non-Monetary Exchanges (Chapter 10)McGraw Corporation wishes to exchange a machine used in itsoperations. Rogers has received the following offers fromother companies in the industry.1) Hill Company offered to exchange a similar machine plus$46,000 . (The exchange has commercial substance forboth parties.2) Keith Company offered to exchange a similar machine.(The exchange lacks commercial substance for both parties.)3) McBride Company offered to exchange a similar machine, but wanted$16,000 in addition to McGraw’s machine. (The exchangehas a commercial substance for both parties.)In addition, McGraw contacted Jackson Corporation, a dealerin machines. To obtain a new machine, McGraw must pay$186,000 in addition to trading in its old machine.Machine costAccumulated depreciationFair value$McGraw320,000 $100,000184,000Hill240,000 $90,000138,000Keith294,000 $142,000184,000McBrideJackson320,000 $260,000150,000200,000370,000Instructions:For each of the four independent situations, prepare the journalentries to record the exchange on the books of each company.(Round to nearest dollar.)1) McGraw CorporationAccount TitleAccount TitleAccount TitleAccount TitleAccount TitleComputation of gain/loss:DescriptionDescriptionGain/loss2) McGraw CorporationAccount TitleAccount TitleAccount TitleAccount TitleAmountAmountAmountAmountAmountHill CompanyAccount TitleAccount TitleAccount TitleAccount TitleAccount TitleAmountAmountFormulaComputation of gain/loss:DescriptionDescriptionGain/lossAmountAmountAmountKeith CompanyAccount TitleAccount TitleAccount TitleMcGraw CompanyAccount TitleAccount TitleAccount TitleAccount TitleAccount TitleAmountAmountAmountAmountAmountMcBride CompanyAccount TitleAccount TitleAccount TitleAccount TitleAccount TitleComputation of gain/loss:DescriptionDescriptionGain/loss4) McGraw CompanyAmountAmountAmountAmountFormulaAmountAmountAmountAmountComputation of gain/loss:DescriptionDescriptionGain/loss3)AmountAmountAmountJackson CompanyAmountAmountFormulaAmountAmountAmountAmountAmountAmountAmountFormulaAccount TitleAccount TitleAccount TitleAccount TitleAccount TitleAmountAmountAmountAccount TitleAccount TitleAccount TitleAmountAmountAccount TitleAccount TitleAmountAmountAmountAmountAmount

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