Excel Answer Template for the Unit 5 IP Assignment

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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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