061113 Project: Ice Cream Systems Cost Accounting : Project: Ice Cream Systems Lesson 5 Overview The goal of this graded project is to create the following financial statements for Ice Cream Systems...

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061113 Project: Ice Cream Systems Cost Accounting : Project: Ice Cream Systems Lesson 5 Overview The goal of this graded project is to create the following financial statements for Ice Cream Systems (ICS): Balance sheet Income statement Post-closing trial balance The financial statements must be created in one Word document (.doc or .docx file). Alternatively, an Excel workbook may be used (.xls or .xlsx file). A Rich Text Format (.rtf file) may be used by Mac users. The Word, Excel, or Rich Text Format file will be uploaded for grading. 5.1 Prepare a balance sheet, an income statement, and post-closing trial balance for Ice Cream Systems (ICS) Graded Project: Ice Cream Systems READING ASSIGNMENT Once you’ve completed the project and your one file is ready to be submitted, follow the instructions below. Be sure to check your work and to upload the correct file. Your project will be individually graded by your instructor and therefore may take up to five to seven days to grade. Be sure that each of your files contains the Cost Accounting (v2) : Lesson 5 : Page 1© 2019 Penn Foster Inc. following information: Your name Your student ID number The exam number Your email address To submit your graded project, follow these steps: Log in to your student portal. Click on Take Exam next to the lesson you’re working on. Find the exam number for your project at the top of the Project Upload page. Follow the instructions provided to complete your exam. Be sure to keep a backup copy of any files you submit to the school! Project Goal The goal of this graded project is to create the following financial statements for Ice Cream Systems (ICS): Balance sheet Income statement Post-closing trial balance The financial statements must be created in one Word document (.doc or .docx file). Alternatively, an Excel workbook may be used (.xls or .xlsx file). A Rich Text Format (.rtf file) may be used by Mac users. The Word, Excel, or Rich Text Format file will be uploaded for grading. Project Information Read the following information thoroughly before beginning your work. This will help you become familiar with the project. The material you need Cost Accounting (v2) : Lesson 5 : Page 2© 2019 Penn Foster Inc. to know to complete the project has been covered in the textbook and in the assigned exercises and problems. If you understood the chapters and completed the assigned homework problems, you should have no problem with the project. The project is to be done by hand with a pencil and paper. Use the blank forms provided. (Make as many copies as needed.) At the end of the project, you’ll be given instructions for creating and uploading the financial statements in a Word, Excel, or Rich Text Format file for grading. Note: It’s important to format financial statements properly. They must follow Generally Accepted Accounting Principles (GAAP), which create a uniformity of financial statements for analyzing. This allows for an easier comparison, as all businesses follow GAAP. Therefore, the financial statements you create should replicate those in the textbook. Failure to do so will result in a loss of points. This project references “debits equaling credits.” This is a fundamental principle of accounting, and violation of this principle is not acceptable under any circumstance. If debits don’t equal credits, it suggests that someone has “cooked the books” or presented false information. It also allows for embezzlement. If debits don’t equal credits, the cause may be a lack of understanding of accounting principles or carelessness when making journal entries, posting to the general ledger accounts, or completing the math. Remember that instructors are available to help you! If your mistakes are careless, go back over the work slowly until the error is found. Cost Accounting (v2) : Lesson 5 : Page 3© 2019 Penn Foster Inc. The accounting equation must balance on the balance sheet. This is another fundamental principle of accounting that can’t be violated. Unbalanced equations are completely unacceptable. When the equation doesn’t balance, it’s easily detectable by someone who knows accounting, and it suggests the numbers have been “fudged.” If your debits equal your credits and you understand which general ledger accounts belong on which financial statements, then the accounting equation should balance. It’s really all about understanding the concepts and applying that understanding. The following financial statements are provided for ICS: 1. Chart of Accounts 2. Post-Closing Trial Balance 3. Schedule of Accounts Receivable 4. Schedule of Accounts Payable 5. Schedule of Employer Payroll Taxes Allocation 6. Format for the Income Statement 7. Format for the Balance Sheet 8. Job Cost Record Chart of Accounts Assets (1000–1999) 1100 Cash 1200 Accounts Receivable 1300 Direct Materials Cost Accounting (v2) : Lesson 5 : Page 4© 2019 Penn Foster Inc. 1350 Indirect Materials and Factory Supplies 1400 Work in Process 1500 Finished Goods 1600 Prepaid Advertising 1650 Prepaid Insurance 1700 Office Supplies 1800 Factory Equipment 1800.1 Accumulated Depreciation—FactoryEquipment 1850 Office Equipment 1850.1 Accumulated Depreciation—OfficeEquipment Liabilities (2000–2999) 2100 Accounts Payable 2200 Salaries Payable 2300 Federal Withholding Tax (FWT) Payable 2325 FICA Tax Payable 2350 FUTA Tax Payable 2375 SUTA Tax Payable 2500 Unearned Revenue Owner's Equity (3000–3999) 3100 Common Stock ($10 Par) Cost Accounting (v2) : Lesson 5 : Page 5© 2019 Penn Foster Inc. 3150 Paid-In Capital in Excess of Par—CommonStock 3700 Retained Earnings 3900 Income Summary Revenues (4000–4999) 4100 Sales 4200 Sales Discounts Expenses (5000–5999) 5100 Cost of Goods Sold 5150 Factory Overhead 5200 Sales Salaries Expense 5225 Officers' Salaries Expense 5250 Office Salaries Expense 5300 Rent Expense 5350 Advertising Expense 5400 Utilities Expense 5450 Office Supplies Expense 5500 Postage Expense 5550 Telephone Expense 5575 Insurance Expense 5600 Depreciation Expense 5700 Payroll Tax Expense Cost Accounting (v2) : Lesson 5 : Page 6© 2019 Penn Foster Inc. 5800 Bad Debt Expense 5900 Miscellaneous Expense ICE CREAM SYSTEMS Post-Closing Trial Balance January 1, 20— ACCOUNT NUMBER DESCRIPTION DEBIT CREDIT 1100 Cash $117,964.23 1200 Accounts Receivable 51,484.00 1300 Direct Materials 64,350.00 1350 Indirect Materials & Factory Supplies 18,772.00 1400 Work in Process 142,695.00 1500 Finished Goods 27,696.00 1600 Prepaid Advertising — 1650 Prepaid Insurance — 1700 Office Supplies 342.25 1800 Factory Equipment 246,875.00 1800.1 Accumulated Depreciation—Factory Equipment 99,653.35 1850 Office Equipment 38,567.00 1850.1 Accumulated Depreciation—Office Equipment 18,845.66 2100 Accounts Payable 9,814.00 Cost Accounting (v2) : Lesson 5 : Page 7© 2019 Penn Foster Inc. 2200 Salaries Payable — 2300 FWT Payable 1,613.11 2325 FICA Tax Payable 822.68 2350 FUTA Tax Payable 1,032.39 2375 SUTA Tax Payable 1,871.20 2500 Unearned Revenue — 3100 Common Stock ($10 Par) 350,000.00 3150 Paid-In Capital in Excess of Par—Common 32,500.00 3700 Retained Earnings 192,575.09 TOTALS $708,727.48 $708,727.48 ICE CREAM SYSTEMS Schedule of Accounts Receivable January 1, 20— Name Balance Horsfield Happy Ice Cream $17,345.00 Messina Missions 9,458.00 Ashman Alcove Designs 24,681.00 Day Dreamer's Ice Cream 0.00 Total Accounts Receivable $51,484.00 Cost Accounting (v2) : Lesson 5 : Page 8© 2019 Penn Foster Inc. ICE CREAM SYSTEMS Schedule of Accounts Payable January 1, 20— Name Balance O-Ring Enterprises $6,941.00 Smith Synthetics 0.00 Rockaway Metal 2,873.00 OfficeMax 0.00 Total Accounts Payable $9,814.00 ICE CREAM SYSTEMS Schedule of Employer Payroll Tax Allocation January 31, 20— Employer Payroll Taxes Job Wages FWT(15%) FICA (7.65%) FUTA (0.8%) SUTA (1.45%) Total Employer Taxes Net Pay Cost Accounting (v2) : Lesson 5 : Page 9© 2019 Penn Foster Inc. Direct Labor Totals Sales Salaries Officers' Salaries Office Salaries Totals To obtain the Schedule of Employer Payroll Tax Allocation, go to the Financial Accounting (pflibrary.pennfoster.edu/c.php?g=904823&p=65133 73) section of the Penn Foster Library and select the Blank Forms tab. EXAMPLE COMPANY Income Statement For the Period Ending January 1, 20— Operating Revenue Sales $ XX,XXX.XX Less: Sales Discounts XXX.XX Total Operating Revenue $ XX,XXX.XX Cost Cost Accounting (v2) : Lesson 5 : Page 10© 2019 Penn Foster Inc. https://pflibrary.pennfoster.edu/c.php?g=904823&p=6513373 COGS—Cost of Goods Sold XX,XXX.XX Total Cost XX,XXX.XX Gross Profit XX,XXX.XX Expenses Sales Salaries Expense XX,XXX.XX Officers' Salaries Expense XX,XXX.XX Office Salaries Expense XX,XXX.XX Rent Expense XX,XXX.XX Advertising Expense XX,XXX.XX Utilities Expense XX,XXX.XX Office Supplies Expense XX,XXX.XX Postage Expense XX,XXX.XX Telephone Expense XX,XXX.XX Insurance Expense XX,XXX.XX Depreciation Expense XX,XXX.XX