COMPREHENSIVE PROBLEM SUPPLEMENT P2Preparation of a Worksheet,.docx

COMPREHENSIVE PROBLEM SUPPLEMENT P2
Preparation of a Worksheet, Financial Statements, and
Adjusting and Closing Entries
At the end of the fiscal year, Siglo delivery Service, Inc.’s trial
balance appeared as follows:
Siglo Delivery Service, Inc.
Trial balance
August 31, 2014
Cash 10072
Accounts receivable 29314
Prepaid Insurance 5340
Delivery Supplies 14700
Office Supplies 2460
Land 15000
Building 196,000
Accumulated depreciation—Building
53400
Trucks 103,800
Accumulated Depreciation Trucks 30,900
Office Equipment 15,900
Accumulated Depreciation—Office Equipment
10,800
Accounts Payable 9396
Unearned Lockbox fees 8340
Mortgage Payable 72,000
Common Stock 100,000
Retained Earnings 28730
Dividends 30,000
Delivery service revenue 283,470
Lockbox Fee earned 28800

Truck Drivers Wages Expense 120,600
Office Salaries Expense 44,400
Gas, Oil, and Truck Repairs Expense 31050
Interest Expense 7200
____________
625,836 625,836
REQUIRED
1. Enter the trial balance amounts in the Trial Balance columns
of a worksheet and complete the worksheet using the
information that follows:
a. Expired insurance, $3060
b. Inventory of unused delivery supplies, $1430
c. Inventory of unused office supplies, $186
d. Estimated depreciation on the building, $14,400
e. Estimated depreciation on the trucks, $15,450
f. Estimated depreciation on the office equipment, $2,700
g. The company credits the lockbox fees of customer who pay in
advance to the Unearned lockbox fees account. Of the amount
credited, to this account during the year, $5630 had been earned
by August 31.
h. Lockbox fee earned but unrecorded and uncollected at the
end of the accounting period, $816.
i. Accrued but unpaid truck drivers’ wages at the end of the
year, $1920
2. Prepare an income statement, a statement of retained
earnings, and a balance sheet for the company.
3. Prepare adjusting and closing entries from the worksheet.
4. Can the worksheet be used as a substitute for the financial
statement? Explain your answer.

BUS377 WEEK 2, Part 1: The Limits of Established PRM: The
Circored Project
Slide 1
Introduction
Welcome to Managing Project Risk. In this lesson, we will
discuss the limits of established Project Risk Management using
the Circored Project.
Next slide.
Slide 2
Topics
The following topics will be covered in this lesson:
Early design of the Circored technology;
Joint venture and business plan;
The construction phase;
The start-up phase;
A management and design change;
Market turmoil; and
The limits of established PRM: unforeseeable uncertainty.
Next slide.
Slide 3
The Circored Project: Background
Cleveland Cliffs of Cleveland, Ohio is one of the largest iron
ore and iron ore pellet suppliers to blast furnace integrated
steelmakers in the United States.
In the late 1980’s, management observed a demand shift from

blast-furnace-based steelmaking to electric arc furnaces, for
example, mini-mills such as Nucor.
The new mini-mills used mostly scrap as their iron source –
which Cleveland Cliffs did not have product for.
In 1995 they entered into a partnership with German company
Lurgi Metallurgie to develop the product needed using the new
Circored process, which at this time had only been piloted in a
lab
By fall of 1995 a risk assessment had been conducted and they
determined that although the facility would be first-of-its kind,
the technology was straightforward
Next slide.
Slide 4
The Circored Project: Structure
As the project with Lurgi become more concrete, Cliffs pursued
a joint venture structure for the facility and LTV steel signed
up.
After negotiations the shares in Cliffs and Associates Limited
were forty six point five percent each for Cleveland Cliffs and
LTV Steel, and 7 percent for Lurgi. Cleveland Cliffs pressured
Lurgi to take an Ownership interest in the facility because they
felt it would be an incentive for Lurgi to make the plant work.
Cliffs and Associates Limited would be managed by Cleveland
Cliffs would get point 8 percent revenues as a management fee.
A business case was prepared with an upside and a downside
scenario. The analysts forecast the price to be one hundred forty
five dollars per ton delivered with a range of plus or minus ten
dollars per ton. The plan also showed a significant demand for
the product, the biggest stumbling block was the after-tax
Return on Investment of fourteen point three percent. A follow

on facility would be built later after ramping up the first facility
and it was this facility that was expected to provide the real
money. The technical plan was approved with a capital
expenditure of one hundred seventy million dollars.
Next slide.
Slide 5
Circored Project: Construction Phase
For the construction phase, Cliffs selected Bechtel Canada as
the Engineering, procurement, and construction management
contractor. Lurgi was to supply the entire core of the plant as a
subcontractor. Lurgi wanted the contract to manage the whole
project, Cliffs trusted their technology, but did not know if they
were good construction managers.
Next slide.
Slide 6
Circored Project: Clashes
Tensions between Lurgi and Bechtel started immediately
because first, Lurgi saw the plant as their baby, second, Bechtel
exerted cost pressure on Lurgi, and finally, neither one trusted
the other.
Lurgi and Bechtel had different problem-solving skills, Bechtel
emphasized procedures and signoffs. Lurgi emphasized
decentralization and local problem solving.
Cliff’s project manager largely remained in Cleveland which
meant that reactions to problems were slow.
Next slide.
Slide 7
Circored Project: Startup Phase
The plant started up in May 1999 and the problems came in
quick succession. The team lost morale from all of the “We
have solved this problem, now we are almost there, and we are
going to make it” statements, only to encounter another problem

the next day. Many felt that the pressure on individuals was too
high.
Next slide.
Slide 8
Circored Project: Changes
At the end of 1999, a new management team was appointed over
the project. An audit was performed on every piece of
equipment to identify the most important problems. This
resulted in one hundred twenty reliability improvement projects,
which essentially summarized the remaining problems after the
effects of the previous year.
In parallel to the audit, Lurgi produced a new design to
overcome earlier problems. This design was successfully piloted
at the labs of two external engineering companies.
Another blow to the project came in June 2000 when LTV
exited the joint venture. They had suffered severe financial
problems since 1999 and were close to declaring bankruptcy.
Cliffs now owned eighty two percent and Lurgi eighteen
percent.
They used stringent project management methods and completed
the changes on time, by March 2001. The following months saw
a steady improvement of plant operations.
Next slide.
Slide 9
Circored Project: Changes, continued
By October 2001, the plant had become a technical success.
However, following the terrorist attacks on September 11, 2001,
the economy slumped into a world recession. In October prices
dropped to seventy five dollars per ton. At those prices, the
plant could not operate profitably. Rather than close the plant
altogether, they decided to cold idle the plant for a cost of ten

million dollars a year. The cold idle strategy was considered a
better alternative to long-term shutdown while waiting for the
market to recover. The cold idle meant they kept 90 key
personnel on staff.
Lurgi was sold in November 2001 , the new owners were
unwilling to share the cold idling costs.
Cliffs sold the facility to International Steel Group in August
2004. There were able to operate the facility profitably.
Thus, the Circored plant seems to have achieved success and
may yet have a significant influence on how the industry
converts iron ore into pure iron. As is often the case with
breakthrough technologies, the original owner lost out
financially and got out. In addition, several competent people
had their careers damaged by the events. The project manager
and the board were surprised when the problem-solving
activities turned out different than what had been predicted, and
surprise turned into frustration and disappointment. The
question is what was missing and what we can learn from this
project that is applicable to Project Risk Management more
generally.
Next slide.
Slide 10
PRM and the Circored Project
In the Circored project even though the project management
errors were avoidable, they only added four months to the
overrun. The majority of the overrun, twenty-two months, was
related to the difficulty of getting the process to run. The
project team of the Circored project had performed competent
risk management. They used experts to diagnose risk, the
project plan included contingencies, the residual risks were
tackled, and risk analysis was refined over the duration of the
project.
Next slide.
Slide 11
The Limit of PRM

Major problems in the Circored project were missed, not
because of lack of diligence but because of a fundamental lack
of knowledge. The Cliffs and Associates Limited people were
forced into a trial-and-error mode.
Based upon the nature of the uncertainty, the traditional Project
Risk Management methodologies were insufficient. The
traditional Project Risk Management approach rests on the
fundamental assumption that the project team is operating on
known terrain. Thus, the Project Risk Management methodology
was not able to predict the major potential problems.
When the management changes occurred at the end of the
project, the nature of the project’s uncertainty had changed
from unforeseeable to structured, so Project Risk Management
methods now worked.
Next slide.
Slide 12
Check Your Understanding
Slide 13
Summary
We have now reached the end of this lesson. Let’s take a look
at what we’ve covered.
First, we looked at the Circored project. We considered how the
project started, the process involved in the construction phase,
some of the key challenges to the project, the changes to the
project, market turmoil and how the project was finally
completed.
Finally, we considered why traditional project risk management
methods did not work for this project. Traditional project risk
management approaches assume that the project team is
operating in known terrain with a known range of things that
could happen. In projects with high uncertainty, traditional

approaches are insufficient and may have destructive effects.
This completes this lesson.
Due Date
Monday, January 23, 2017
9:00 AM
Points Possible
120
Click the link above to submit your assignment.
Assignment 1: Selecting Projects
Write a one to two (1–2) page paper in which you discuss the
single most important factor that
must be considered when selecting a project.
The format of the paper is to be as follows:
Typed, double-spaced, New Times Roman font (size 12), one-
inch margins on all sides. APA
format.
In addition to the one to two (1–2) pages required, a title page
is to be included. The title
page is to contain the title of the assignment, your name, the
instructor’s name, the course
title, and the date.

Note: You will be graded on the quality of your answers, the
logic/organization of the report, your
language skills, and your writing skills.
The assignment will be graded using the following rubric:
Outcomes
Assessed
Analyze the factors that go into project selection.
Use technology and information resources to research issues in
managing project teams.
Grading Rubric for Assignment 1 — Selecting Projects
Criteria
0
Unacceptable
40
Developing
60
Competent
80
Exemplary
1. Discuss the
single most
important factor
that must be
considered when
selecting a

project.
Did not complete
the assignment or
did not discuss the
single most
important factor
that must be
considered when
Partially discussed
the single most
important factor
that must be
considered when
selecting a project;
omitted some key
Sufficiently
discussed the
single most
important factor
that must be
considered when
selecting a project.
Fully discussed the
single most
important factor
that must be
considered when
selecting a project.
Completed with
CancelCancel Save DraftSave Draft SubmitSubmit

A S S I G N M E N T I N F O R M AT I O N
selecting a project;
omitted key
information and/or
included irrelevant
information.
Completed with
less than 60%
accuracy,
thoroughness, and
logic.
information.
Completed with
60-79% accuracy,
thoroughness, and
logic.
Completed with
80-89% accuracy,
thoroughness, and
logic.
90-100%
accuracy,
thoroughness, and
logic.
Criteria
0
Unacceptable
10

Developing
15
Competent
20
Exemplary
2. Clarity. Did not complete
the assignment, or
explanations are
unclear and not
organized.
(Major issues)
Explanations
generally unclear
and not well
organized.
(Many issues)
Explanations
generally clear
and/or organized.
(Minor issues)
Explanations very
clear and well
organized.
(Added helpful
details)
3. Writing –
Grammar,
sentence

structure,
paragraph
structure, spelling,
punctuation, APA
usage.
Did not complete
the assignment or
had 8 or more
different errors in
grammar, sentence
structure,
paragraph
punctuation, or
APA usage. (Major
issues)
Had 6–7 different
errors in grammar,
sentence structure,
paragraph
punctuation, or
APA usage. (Many
issues)
Had 4–5 different
errors in grammar,
sentence structure,
paragraph
punctuation, or
APA usage. (Minor
issues)

Had 0–3 different
errors in grammar,
sentence structure,
paragraph
punctuation, or
APA usage.
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Week 3 Assignment 1 Submission
If you are using the Blackboard Mobile Learn iOS App, please
click "View in Browser”.
Click the link above to submit this assignment.
Students, please view the "Submit a Clickable Rubric
Assignment" video in the Student Center.
Instructors, training on how to grade is within the Instructor
Center.
Assignment 1: Circored Project
Due Week 3 and worth 150 points
Review your readings and discussions on the Circored Project
first introduced in Week 2. These will help
you complete this assignment.
Write a two to three (2-3) page paper in which you:
1. Summarize the key points of the project.
2. Determine how the risks were managed.
3. Recommend at least three (3) lessons learned for a project
manager to know for future
projects.
4. Use at least two (2) quality resources in this assignment.
Note: Wikipedia and similar
Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size
12), with one-inch margins on
all sides; citations and references must follow APA or school-
specific format. Check with your
professor for any additional instructions.
Include a cover page containing the title of the assignment, the
student’s name, the
professor’s name, the course title, and the date. The cover page
and the reference page are
not included in the required assignment page length.
The specific course learning outcomes associated with this
assignment are:
Analyze the project risk identification and assessment
processes.
Examine the various types of project risks.
Use technology and information resources to research issues in
managing project risk.
Write clearly and concisely about managing project risk using
proper writing mechanics.
Grading for this assignment will be based on answer quality,
logic / organization of the paper, and
https://blackboard.strayer.edu/webapps/assignment/uploadAssig
nment?content_id=_20785546_1&course_id=_205277_1&assign
_group_id=&mode=view
language and writing skills, using the following rubric found
here.

https://blackboard.strayer.edu/bbcswebdav/institution/BUS/377/
1134/Week3-
1134/Week%203%20Assignment%201%20Grading%20Rubric.ht
ml
COMPREHENSIVE PROBLEM ALTERNATIVE P9
Determining Adjustments
At the end of the first three month of operation, Evergreen
Repair, Inc.’s trial balance is as follows.
Evergreen Repair, Inc.
Trial Balance
March 31, 2014
--------------------------------------------------------------------------
----------------------------------------------------------------
Cash 7983
Accounts Receivable 5872
Office Supplies 970
Prepaid Rent 1500
Equipment 5200
Accounts Payable 2629
Unearned Repair Revenue 1146
Common Stock 5000
Retained Earnings 6314
Dividends 1800
Repair Revenue 12,236
Wages Expense 3580
Office Cleaning Expense 420

27,325 27,325
Evergreen has hired an accountant to prepare financial
statements to determine how well the company is doing after the
three months. Upon examining the accounting records, the
accountant finds the following items of interest:
a. An inventory of office supplies reveals supplies on hand of
$469.
b. The prepaid rent account includes the rent for the first three
months plus a deposit for April’s rent.
c. Depreciation on the equipment for the first three months is
$560.
d. The balance of the Unearned Repair Revenue Account
represents a 12-month service contract paid in advance on
February 1.
e. On March 31, accrued wages total $168.
f. Federal income taxes for the three months are estimated to be
$1250.
REQUIRED
All adjustments affect one balance sheet account and one
income statement account. For each of these situations, show
the accounts affected, the amount of the adjustment (using a +
or – to indicate an increase or decrease), and the balance of the
account after the adjustment in the following format.
Balance Amount of Balance Income Amount
of Balance
Sheet Adjustment After Statement
Adjustment After

Account (+ or -) Adjustment Account (+ or -)
Adjustment

COMPREHENSIVE PROBLEM SUPPLEMENT P2Preparation of a Worksheet,.docx

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