| Dec | 1 | Cash | 60000 | |||
| Common Stock | 60000 | |||||
| 2 | Property, Plant and Equipments | 17500 | ||||
| Cash | 17500 | |||||
| 2 | Prepaid Rent | 18000 | ||||
| Cash | 18000 | |||||
| 3 | Office Supplies | 1500 | ||||
| Accounts Payable | 1500 | |||||
| 10 | Prepaid Insurance | 3600 | ||||
| Cash | 3600 | |||||
| 14 | Salaries and Wages Expenses | 10750 | ||||
| Cash | 10750 | |||||
| 24 | Cash | 54000 | ||||
| Commission Revenue | 54000 | |||||
| 28 | Salaries and Wages Expenses | 12125 | ||||
| Cash | 12125 | |||||
| 29 | Repairs Expenses | 350 | ||||
| Cash | 350 | |||||
| 30 | Utilities Expenses | 450 | ||||
| Cash | 450 | |||||
| 30 | Dividends | 3000 | ||||
| Cash | 3000 | |||||
| Trap Adventures, Inc. | |||||
| Unadjusted Trial Balance | |||||
| December 31, 2015 | |||||
| Cash | $ 48225 | ||||
| Office Supplies | 1500 | ||||
| Prepaid Rent | 18000 | ||||
| Prepaid Insurance | 3600 | ||||
| Property, Plant and Equipments | 17500 | ||||
| Accounts Payable | 1500 | ||||
| Common Stock | $ 60000 | ||||
| Dividends | 3000 | ||||
| Commission Revenue | 54000 | ||||
| Salaries and Wages Expenses | 22875 | ||||
| Utilities Expenses | 450 | ||||
| Repairs Expenses | 350 | ||||
| Totals | $ 115500 | $ 115500 | |||
| Dec | 31 | Insurance Expenses | 300 | |||
| Prepaid Insurance | 300 | |||||
| 31 | Rent Expenses | 3000 | ||||
| Prepaid Rent | 3000 | |||||
| 31 | Supplies Expenses | 900 | ||||
| Office Supplies | 900 | |||||
| 31 | Depreciation Expenses | 325 | ||||
| Accumulated Depreciation | 325 | |||||
| 31 | Salaries and Wages Expenses | 525 | ||||
| Salaries and Wages Payable | 525 | |||||
| Trap Adventures, Inc. | ||||||
| Adjusted Trial Balance | ||||||
| December 31, 2015 | ||||||
| Cash | $ 48225 | |||||
| Office Supplies | 600 | |||||
| Prepaid Rent | 15000 | |||||
| Prepaid Insurance | 3300 | |||||
| Property, Plant and Equipments | 17500 | |||||
| Accumulated Depreciation | 325 | |||||
| Accounts Payable | 1500 | |||||
| Salaries and Wages Payable | 525 | |||||
| Common Stock | $ 60000 | |||||
| Dividends | 3000 | |||||
| Commission Revenue | 54000 | |||||
| Salaries and Wages Expenses | 23400 | |||||
| Utilities Expenses | 450 | |||||
| Repairs Expenses | 350 | |||||
| Insurance Expenses | 300 | |||||
| Rent Expenses | 3000 | |||||
| Supplies Expenses | 900 | |||||
| Depreciation Expenses | 325 | |||||
| Totals | $ 116350 | $ 116350 | ||||
| Trap Adventures, Inc. | NOTE that there are THREE Statements included on this sheet. | ||||||||||||||||||||
| Income Statement | |||||||||||||||||||||
| For the year ended December 31, 2015 | |||||||||||||||||||||
| Revenue: | |||||||||||||||||||||
| Comission | $ 54000 | ||||||||||||||||||||
| Expenses | |||||||||||||||||||||
| Salaries and Wages Expenses | 23400 | ||||||||||||||||||||
| Utilities Expenses | 450 | ||||||||||||||||||||
| Repairs Expenses | 350 | ||||||||||||||||||||
| Insurance Expenses | 300 | ||||||||||||||||||||
| Rent Expenses | 3000 | ||||||||||||||||||||
| Supplies Expenses | 900 | ||||||||||||||||||||
| Depreciation Expenses | 325 | ||||||||||||||||||||
| Total Expenses | 28725 | ||||||||||||||||||||
| Net Income | $ 25275 | ||||||||||||||||||||
| Trap Adventures Inc, | |||||||||||||||||||||
| Statement of Equity | |||||||||||||||||||||
| For December 31 | |||||||||||||||||||||
| Common Stock | Retained Earnings | Total | |||||||||||||||||||
| Beginning balance | 0 | 0 | 0 | ||||||||||||||||||
| Introduced | 60000 | $ 60000.00 | |||||||||||||||||||
| Net Income for year | 25275 | $ 28725.00 | |||||||||||||||||||
| Dividends | (3000) | $ (3000.00) | |||||||||||||||||||
| Balance at end | $ 60000 | $ 22275 | $ 82275 | ||||||||||||||||||
| Trap Adventures Inc, | |||||||||||||||||||||
| Balance Sheet | |||||||||||||||||||||
| For December 31 | |||||||||||||||||||||
| Assets | Liabilities | ||||||||||||||||||||
| Current Assets | Current Liabilities | ||||||||||||||||||||
| Cash | $ 48225 | 48225 | $ 48225 | ||||||||||||||||||
| Office Supplies | $ 600 | 600 | $ 600 | ||||||||||||||||||
| Prepaid Rent | $ 15000 | Total current liabilities | $ 15000 | ||||||||||||||||||
| Prepaid Insurance | $ 3300 | Stockholder’s equity | |||||||||||||||||||
| Total current assets | $ 67125 | Common Stock | 60000 | ||||||||||||||||||
| Property, Plant and Equipments | 17500 | Retained Earnings | $ 17500 | ||||||||||||||||||
| Accumulated Depreciation | $ (325) | Total stockholder’s equity | $ 82275 | ||||||||||||||||||
| Total Assets | $ 84300 | Total liabilities and stockholder’s equity | $ 84300 | ||||||||||||||||||
| Dec | 31 | Commission Revenue | 54000 | |||
| Income Summary | 54000 | |||||
| Income Summary | 27500 | |||||
| Salaries and Wages Expenses | 0 | |||||
| Utilities Expenses | 0 | |||||
| Repairs Expenses | 23400 | |||||
| Insurance Expenses | 450 | |||||
| Rent Expenses | 350 | |||||
| 31 | Supplies Expenses | 300 | ||||
| Depreciation Expenses | 3000 | |||||
| 31 | Income Summary | 25275 | ||||
| Retained earnings | 25275 | |||||
| Retained Earnings | 3000 | |||||
| Dividends | 3000 | |||||
| Trap Adventures, Inc. | |||||
| Post-Closing Trial Balance | |||||
| December 31, 2015 | |||||
| Cash | $ 48225 | ||||
| Office Supplies | 600 | ||||
| Prepaid Rent | 15000 | ||||
| Prepaid Insurance | 3300 | ||||
| Property, Plant and Equipments | 17500 | ||||
| Accumulated Depreciation | 325 | ||||
| Accounts Payable | 1500 | ||||
| Salaries and Wages Payable | 525 | ||||
| Common Stock | $ 60000 | ||||
| Retained Earnings | 22275 | ||||
| Totals | $ 84625 | $ 84625 | |||
| 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 | 67,125 / 2,025 = 33.1481 | ||||||||||||||||||||
| Return on equity | 25,275 / 84,300 = 0.2998 = 29.98 % | ||||||||||||||||||||
| Company is in a better position to offset its current liabilities with its current assets available. The result shows that current assets of the said company are 33 times greater than its liabilities. The results are positive for Trap Adventures, Inc. | |||||||||||||||||||||
| For each ratio, provide the calculation and an explanation of the meaning. | |||||||||||||||||||||
| Is this a positive or negative result for the Trap Adventures, Inc.? | |||||||||||||||||||||
| As the result is 29% which shows that company management is doing good job to generate profits by efficient use of stockholder’s equity. The results are positive for 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? | |||||||||||||||||||||
| Net profit of the company has the greatest percentage i.e. 47% of the total sale / revenue. | |||||||||||||||||||||
| However, Insurance expanse has the lowest percentage that is 0.56% of the sale / revenue. | |||||||||||||||||||||
| Moreover, net income of Trap Adventures, Inc can be increased by reducing the salaries and wages expenses which have the 2nd largest percentage in the common-size income statement. | |||||||||||||||||||||
| 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 $25,000 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? | |||||||||||||||||||||
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