1) You have been asked to temporarily take over the duties of the accountant at AC Speed Company, a wholesaler in the auto parts industry, while they are away for a month or more due to a family emergency. You will gain valuable experience completing the accounting cycle tasks and financial statements for the company.
2) The project has two parts - the first involves recording transactions, closing the accounting records, and preparing financial statements for the month. The second part analyzes the company's ratios over a three year period to assess its financial position and help with future decisions.
3) You will calculate key financial ratios using the trial balance data, compare them over time and to industry averages, and write a memo to
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Davenport university acct 202 homework help
1. Davenport University ACCT 202
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ACCT 202 SimulationSS2014_Project
CompanyBackground& ScenarioThe AC SpeedCompanyisawell-established,publicly-held
corporation,operatingasa wholesalerinthe autoparts industry.Specifically,ACSpeedpurchasesauto
parts frommanufacturersandsellsthemtolarge businesscustomers.Mostpurchasesandsalesare on
account,withtrade creditterms(specifiedbelow).
You’re a DavenportUniversitystudentpursuingabachelor’sdegreeinbusinessandemployedatthe AC
SpeedCompanythissemesterasanintern.You’ve workedinvariousdepartmentsandonseveral
projectssofar, learningalotabout the company’sbusinessoperations.
Managementseemsimpressedwithyourenthusiasmandthe qualityof yourwork.The company’s
accountanthas justbeencalledawayfora familyemergencyandwill likelybe absentforamonthor so.
The General Manager asksyou to take overthe accountant’sregulardutiesonan interimbasis.You’re
nervousaboutdoingso,but are confidentthatwhatyou’ve learnedinaccountingclass,plus your
personal problem-solvingskills,will make thisasuccessful experience.
What a greatlearningopportunity,nottomentionanenhancementtoyourresume!ProjectOverview
& Instructions
A. Overview
a. Part 1 isa financial accountingactivitythatrequiresyoutorecordvariousbusinesstransactions
duringthe month,close the accountingrecordsat the endof the month,and prepare the financial
statements.These tasksrelate tothe stepsinthe accountingcycle thatyoulearnedinyourfirst
accountingcourse.`
2. b. Part 2 is an activitythatrequiresyoutoanalyze the company’syear-endfinancialstatementstoassist
managementinassessingthe company’spositionandmakingdecisionsaboutitsfuture direction.
c. This isan individual,notateam,project.While youmaydiscussthisprojectwithothers,youmust
prepare andsubmityourown work.Refertothe academicintegritystatementinthe projectworkbook.
d. Before startingwork,reviewthe entire project:all instructions,businesstransactionsdescriptions,
workbooksections,checkfigures,due dates,andsubmissionrequirements.
B. General Instructions
a. The partsof thisproject,includingspecificbusinesstransactionsandstepsinthe accountingcycle,
mustbe completedinsequence.Thisisparticularlyimportantwithbusinesstransactionsrelatingto
purchasesandsalesof inventory.
b. You are alsoencouragedtouse your textbook’stableof contents(front)orindex (back) tolocate
helpful references.
c. These projectinstructionswillnotaddresseverydetail of everytask.If youhave questions,askyour
instructor.
d. Most of yourworkfor thisprojectwill be accomplishedinExcel.A basicskill levelinthisapplicationis
expected.Thatis,youshouldbe able tosuchthingsas move aroundin a workbook,enterdataincells,
use the sum function,compose basicformulas,andsave yourwork.
e.If roundingisrequired,roundtothe nearestcent.
For example,$96.835 wouldbe enteredas$96.84.
f.Use the checkfiguresprovidedtocheckyourwork as youprogressthroughthe project.Investigate
any discrepanciesandcorrectthemas you go along.
g. Referto the projectrubricto determine how componentsof the projectwill be assessed.
h. Appearance counts!Payattentiontothe format,to spelling,andtootherdetailsof appearance.This
reflectsonmanagement’sperceptionof youasa professional.
C. SubmissionRequirements
a. Final submissionof all partsof thisprojectmustbe in electronic(notpaper) form.Thatis,youwill
submityourcompletedworkviaanassignmentlinkinaBlackboardcourse site orvia an email
attachment.Followyourinstructor’sdirections.
3. b. Save backupcopiesof your work.If you have multiple versionsof the project,clearlylabel themfor
your ownreference andtoensure thatyousubmitthe appropriate versiontoyourinstructor.
c. You must readthe academicintegritystatementinthe projectworkbookandenteryourstudentID
numberonthe formto signifyyouragreementwithandadherence tothatstatement.Final project
submissionswill notbe acceptedwithoutthis.
d. Due datesfor the parts of thisprojectwill be providedbyyourinstructorinthe course syllabus,inthe
Blackboardcourse site,orin a designatedhandout.Be sure toenterthese onyourpersonal calendar
and planyourwork on thisprojectaccordingly.
D. CreditTerms& InventoryAccounting
a. WhenAC Speedpurchasesmerchandise (inventoryonly) fromasupplierorvendoronaccount, they
receive credittermsof 2/15, net30.
b. WhenACSpeedsellsmerchandise toacustomeronaccount, theyofferthatcustomercredittermsof
2/30, net45.
c. AC Speedaccountsforthe specifictypesof merchandiseintheirinventorywithasetof subsidiary
ledgers(inventorycontrol cards).The balancesinthese subsidiaryledgerrecords,intotal,mustequal
the balance inthe Merchandise Inventoryaccountinthe general ledger.
d. ACSpeedusesa perpetual inventoryaccountingsystemanda last-in,first-out(LIFO) inventorycosting
method.
e.Subsidiaryledgerrecordsare keptforeach customerandfor each vendor.The balancesinthe
customersubsidiaryledgerrecords,intotal,mustequal the AccountsReceivable accountbalance inthe
general ledger.The balancesinthe vendorsubsidiaryledgerrecords,intotal,mustequal the Accounts
Payable accountbalance inthe general ledger.
E. Financial AccountingSteps:
a. Recordeach businesstransaction,insequencebydate,inthe appropriate special journalorthe
general journal.Also,immediatelyrecordanytransactioninvolvinginventory,acustomer,ora vendorin
the appropriate subsidiaryledgerrecord.
b. Atthe endof the month,posteachentryin the general journal tothe general ledger.
c. At the endof the month,total each columnineachspecial journal andpostthat total to the general
ledger.EXCEPTforentriesinthe “Other”columns,whichmustbe postedindividuallytothe general
ledger.
4. d. Whenpostingiscompleted, bringthe balance ineachgeneral ledgeraccountupto date.
e.Whenpostingiscompleted,bringthe balance ineachsubsidiaryledgeraccountupto date.
f. At thispointinthe closingprocess,the balancesof all subsidiaryledgeraccountswouldbe totaled
and that total comparedto the balance of the correspondingcontrol accountinthe general ledger.That
is,the total of inventorycontrol cardswouldbe comparedtothe Merchandise Inventorybalance;the
customersubsidiaryledgertotal tothe AccountsReceivablebalance;andthe vendorsubsidiaryledger
total to the Accounts Payable balance.
Anydiscrepancieswouldbe investigatedandcorrected.Giventhe limitedscope of thisprojectscenario,
reconciliationbetweensubsidiaryledgersandcontrol accountsisnotpossible.
g. List all general ledgeraccountbalancesinthe unadjustedtrial balance columnsof the worksheet.Use
the sum functioninExcel tototal the debitand creditcolumns.These totalsshouldbe equal.
h. Prepare the end-of-monthadjustingentries.Recordtheseentriesinthe general journalandpost
themto the general ledger.Alsorecordthe adjustingentriesinthe designatedcolumnsinthe
worksheetandtotal the debitandcreditcolumns.These totalsshouldbe equal.
i. Update general ledgeraccountbalancesafterpostingadjustingjournalentries.
j. Complete the unadjustedtrial balancecolumnsonthe worksheet.Use Excel formulastocarry
balancesfromthe unadjustedtrial balance columns,adjustingasnecessarybyentriesinthe
adjustmentscolumns.Checkyourresultsagainstthe balancesrecordedinthe general ledger.
k. Sort the dollarsrecordedinthe adjustedtrial balance columnsintoeitherthe income statementor
the balance sheetcolumns.Total these columns.The entryof netincome shouldcause the debitand
creditcolumnstoequal one another.
l. Use the income statementinformationonthe worksheettoprepare amulti-stepincomestatementin
goodform.Look at examplesof thisincome statementformatinyour textbook,suchasthe one onpage
220.
m. Prepare a statementof retainedearningsingoodform.Lookat examplesof thisstatementinyour
textbook.Rememberthatnetincome fromyourjust-completedincomestatementisanecessary
componentof thisstatement.
n. Use the balance sheetinformationonthe worksheettoprepare aclassifiedbalancesheet,similarin
formatto the example onpage 711. Rememberthatthe endingretainedearningsbalance fromthe just-
completedstatementisanecessarycomponentof the equitysectionof the balance sheet.
o. Prepare the end-of-monthclosingentries.Recordtheseentriesinthe general journalandpostthem
to the general ledger.Update balancesinthe generalledgeraccounts.
5. p. Listthe general ledgeraccountsthathave balancesotherthanzeroon the post-closingtrial balance.
The totalsof the debitcolumnandthe creditcolumnshouldbe equal.
F. Part 2 of thisprojectrequiresyoutoanalyze the company’syear-endfinancialstatementstoassist
the managementof ACSpeedinassessingthe company’sfinancialpositionandmakingdecisionsabout
itsfuture direction.
a. Before beginningthispartof the project,youwill findithelpful toreview Chapter18 on financial
statementanalysis.Page 809, a summaryof ratios,will be particularlyuseful.
b. Tabs inthe projectworkbookprovide trial balance dataforthe currentand twoprecedingyearsfor
AC Speedanda locationtocalculationaselectionof ratios.Use the trial balance data andthe formulas
inChapter18 tocompute the ratios listedforeachof the three years.
YOU MUST STRUCTURE YOUR RATIO CALCULATIONSASFORMULAS ANDLINKSTO APPROPRIATECELLS
ON THE TRIAL BALANCETAB. You will lose pointsbysimplytypingthe final rationumbersor
percentages.
c. Afteryoucalculate the ratios,considerwhetherthere isatrendoverthe three-yearperiod.Also
compare the ratios youcalculatedforACSpeedwiththose listedasindustryaverages.Review the
informationinChapter18 to helpyoudeterminewhatthe ratiosare tellingyouaboutvariousaspectsof
AC Speed’sbusinessoperations.
d. Use Word to prepare a memo(minimum500words) to ACSpeed’sgeneral manager,addressingthe
three questionslistedatthe bottomof the ratiostab. Thisshouldbe formattedasa businessmemo,not
an APA paper.
Be sure to include abrief introductionandconclusioninthe memo.Eachquestionshouldbe addressed
inone or twoparagraphs inthe bodyof the memo.Rememberthatthe general managerwillexpect
details/facts/ratiostosupportstatementsyoumaymake aboutthe statusof the business.
Your writingshouldbe concise,clear,andreadable,withafairlyformal tone (since it’saddressedtoAC
Speed’sgeneral manager,whoislikelytoshare itwithothermembersof management).Yourinstructor
will provide the due date andsubmissionrequirementsforthispartof the project.
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