Devry ACCT504 Full Course Latest

Devry ACCT504 Full Course Latest https://hwguiders.com/downloads/devry-acct504-full-course-latest/ Devry ACCT504 Full Course Latest Devry ACCT504 Week 1 Discussion Latest Financial Reporting Environment, Financial Statements, and Ratios (graded) What is the purpose of Accounting? Who are the users of Accounting information? Devry ACCT504 Week 2 Discussion Latest Accounting Equation, Accounting Cycle, and Accrual Accounting (graded) In this area, we will discuss the significance of the accounting equation, the rules of debit and credit, and the steps in the accounting cycle. We will talk about recording of transactions, normal balances, and the creation of the trial balance. Let’s begin by asking this question: What is the role of the accounting equation in the analysis of business transactions? Devry ACCT504 Week 3 Discussion Latest Merchandising Operations, Income Statements, and Inventory Cost-Flow Assumptions (graded) In this area, we will discuss the accounting for inventory transactions of merchandising companies, the two formats of preparing the income statement, and how to evaluate the profitability of a merchandising company. We will also discuss how companies determine the year-end inventory value and cost of goods sold using one of the cost-flow assumptions. Finally, we will also examine the impact of choosing a certain cost-flow assumption on the tax liability and other financial statement numbers of a company. Let’s begin with this question: How is the income statement of a merchandising company different from that of a service company? Devry ACCT504 Week 4 Discussion Latest Internal Control, Reporting Cash, and Accounting for Receivables (graded) In this area, we will talk about the importance of internal control in a business organization and the reporting of cash on the balance sheet as well as managing receivables and estimating uncollectible accounts. What is internal control, and what are the objectives of a well-designed internal control structure in an organization? Devry ACCT504 Week 5 Discussion Latest Plant Assets, Intangibles, and Accounting for Liabilities (graded) Companies have a significant amount of investment in long-lived assets, which include property, plant and equipment (commonly referred to as plant assets), and intangible assets. We will also discuss different types of liabilities and understand how to account for and report those liabilities. Let’s begin by talking about plant assets. Can you tell us what kind of plant assets are used in your company or place of business? Do you have an estimate of the amount invested in those plant assets? Devry ACCT504 Week 6 Discussion Latest Accounting for and Reporting Equity and the Statement of Cash Flows (graded) Stockholders’ equity is an important heading in a corporate Balance Sheet. Let’s begin the discussion of stockholders’ equity by asking: How is the stockholders’ equity section of a corporate Balance Sheet different from that in a single-owner business? Devry ACCT504 Week 7 Discussion Latest Different Tools of Financial Analysis (graded) There are different tools for analyzing the financial statements of a company, such as horizontal analysis, vertical analysis, ratios for measuring financial health and profitability, and so forth. Before we begin using these tools, however, it is important to know the purpose of each tool. Why do we need different tools for analyzing the financial statements? Don’t the numbers in the financial statements speak for themselves? Devry ACCT504 Week 3 Case Study Latest CASE STUDY – THE COMPLETE ACCOUNTING CYCLE Name: ___________________________________ This Case Study is worth 100 points, or 10% of your final course grade. This Case Study relates to TCOs E and F, and Chapters 2 and 3. MAKE SURE TO COMPLETE ALL REQUIREMENTS WHICH ARE LISTED BELOW. There are 10 sheets in the Workbook, including this one. All of the information that you need for the project is located in this Workbook. Requirements Sheet in Workbook Requirement 1—Prepare the Journal Entries in the General Journal Journal Entries Requirement 2—Post Journal Entries to the General Ledger General Ledger Requirement 3—Prepare a Trial Balance Trial Balance Requirement 4—Prepare the Adjusting Entries Adjusting Entries Requirement 5—Post Adjusting Entries to the General Ledger General Ledger Requirement 6—Prepare an Adjusted Trial Balance Adjusted Trial Balance Requirement 7—Prepare the Financial Statements Financial Statements Requirement 8—Prepare the Closing Entries Closing Entries Requirement 9—Post Closing Entries to the General Ledger General Ledger Requirement 10—Prepare the Post Closing Trial Balance Post-Closing Trial Balance Hint for success: Review the Week 2 Lesson prior to starting this project. There are also hints contained within certain cells on some of the Worksheet tabs. You can hover over the red pointer at the top right-hand corner of the cell to read the hint. Hints are provided for the following balances: 1) The debits for the journal entries are on the Journal Entries tab. 2) The credits for the journal entries are on the Journal Entries tab. 3) The cash balance is on the General Ledger tab. 4) The debits for the trial balance are on the Trial Balance tab. 5) The credits for the trial balance are on the Trial Balance tab. 6) The debits for the adjusted trial balance are on the Adjusted Trial Balance tab. 7) The credits for the adjusted trial balance are on the Adjusted Trial Balance tab. 8) Net income for the income statement is on the Financial Statements tab. 9) Retained earnings as of July 31 are on the Financial Statements tab. 10) Total assets for the balance sheet are on the Financial Statements tab. 11) Total liabilities and shareholders’ equity for the balance sheet are on the Financial Statements tab. 12) The debits for the post-closing trial balance are on the Post-Closing Trial Balance tab. 13) The credits for the post-closing trial balance are on the Post-Closing Trial Balance tab. Requirement #1: During its first month of operation, the Melvin Plumbing Corporation, which specializes in residential plumbing, completed the following transactions. July 1 Began business by making a deposit in a company bank account of $90,000, in exchange for 9,000 shares of $10 par value common stock. July 3 Paid the current month’s rent, $5,500. July 5 Paid the premium on a 1-year insurance policy, $4,800 July 7 Purchased supplies on account from Little Company, $900. July 10 Paid employee salaries, $3,300 July 14 Purchased equipment from Lake Company, $11,500. Paid $1,500 down and the balance was placed on account. Payments will be $500.00 per month for 20 months. The first payment is due 8/1. Note: Use accounts payable for the balance due. July 15 Received cash for plumbing revenue for the first half of July, $7,700 July 19 Made payment on account to Lake Company, $500. July 31 Received cash for plumbing revenue for the last half of July, $8,505 July 31 Declared and paid cash dividends of $600 Prepare journal entries to record the July transactions in the General Journal below. Use the following account names for journal entries. General Journal Chart of Accounts: Account Title (Normal Balance) Date Description(Account Name) Debit Credit Assets Cash (Debit) Prepaid Insurance (Debit) Supplies (Debit) Equipment (Debit) Accumulated Depreciation – Equipment (Credit) Liabilities Accounts Payable (Credit) Income Tax Payable (Credit) Stockholders’ Equity Common Stock (Credit) Retained Earnings (Credit) Dividends (Debit) Revenue Revenue (Credit) Expenses Rent Expense (Debit) Salaries Expense (Debit) Insurance Expense (Debit) Supplies Expense (Debit) Depreciation Expense (Debit) Income Tax Expense (Debit) 0 0 Note: Remember that debits must equal credits—All of your journal entries should balance. Devry ACCT504 Week 7 Course Project Latest Course Project: A Financial Statement Analysis A Comparative Analysis of Nike, Inc. and Under Armour, Inc. Below is the link for the financial statements for Nike, Inc. for the fiscal year ending 2014. First, select 2014using the drop-down arrow labeled Year, and then select Annual Filings using the drop-down arrow labeled All. You should select the 10k dated 7/25/2014,and choose to download in PDF, Word, or Excel format. http://investors.nike.com/investors/news-events-and-reports/?toggle=filings Below is the link for the financial statements for Under Armour, Inc. for the fiscal year ending 2014. First, select Annual using the drop-down arrow labeled View, and then select 2015 using the drop-down arrow labeled Year. You should select the 10k dated 2/20/2015, and choose to download it in PDF or Excel format. http://www.uabiz.com/sec.cfm A sample project template is available for download from the Course Resources page’s Course-Specific Resources section.The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2014 financial statements of Tootsie Roll and Hershey provided at their websites. Description This course contains a Course Project, where you will be required to submit one draft of the project at the end of Week 5, and the final completed project at the end of Week 7. Using the financial statements for Nike, Inc. and Under Armour, Inc.,respectively, you will calculate and compare the financial ratios listed further down this documentfor the fiscal year ending 2014, and prepare your comments about the two companies’performancesbased on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in Week 7, and one grade will be assigned for the entire project. Overall Requirements For the Final Submission: Your final Excel workbook submission should contain the following. You cannot use any other software but Excel to complete this project. 1. 1. A Completed Worksheet Title Page tab, which is really a cover sheet with your name, the course, the date, your instructor’s name, and the title for the project. 2. 2. A CompletedWorksheetProfiles tab which contains a one-paragraph description regarding each company with information about their history, what products they sell, where they are located,and so forth. 3. 3. All 16 ratios for each company with the supporting calculations and commentary on your Worksheet Ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell.The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio.You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.You need to specifically state which company performed better for each ratio. 4. 4. The Summary and ConclusionsWorksheet tab is an overall comparison of how each company compares in terms of the major category of ratios described in Chapter 13 of your textbook.A nice way to conclude is to state which company you think is the better investment and why. 5. 5. The Bibliography Worksheet tab must contain at least your textbook as a reference. Any other information that you use to profile the companies should also be cited as a reference. Required Ratios for Final Project Submission 1. 1. Earnings per Share of Common Stock 2. 2. Current Ratio 3. 3. Gross (Profit) MarginPercentage 4. 4. Rate of Return (Net Profit Margin) on Sales 5. 5. Inventory Turnover 6. 6. Days’ Inventory Outstanding (DIO) 7. 7. Accounts Receivable Turnover 8. 8. Days’ Sales Outstanding (DSO) 9. 9. AssetTurnover 10. 10. Rate of Return on Total Assets (ROA) 11. 11. Debt Ratio 12. 12. Times-Interest-Earned Ratio 13. 13. Dividend Yield[For the purposes of this ratio, use Yahoo Finance to look up current dividend per share and stock price; just note the date that you looked up this information.] 14. 14. Rate of Return on Common Stockholders’ Equity (ROE) 15. 15. Free cash flow 16. 16. Price-Earnings Ratio (Multiple) [For the purpose of this ratio, for Nike, use the market price per share on May 30, 2014,and for Under Armour, use the market price per share on December 31, 2014.] The Excel files uploaded in the Dropboxes should not include any unnecessary numbers or information (such as previous years’ ratios, ratios that were not specifically asked for in the project, etc.). Please upload your final submission to the Week 7 Dropbox by the Sunday ending Week 7. For the Draft: Create an Excel spreadsheet or use the project template to show your computations for the first 10 ratios listed above. The more you can complete regarding the other requirements, the closer you will be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file. Please upload your draft submission to the Week 5 Dropbox by the Sunday at the end of Week 5. Other Helpful Information: If you feel uncomfortable with Excel, you can find many helpful tutorials on Excel by performing a Google search. Chapter 13 contains ratio calculations and comparison comments related to Apple and Dell, so you will likely find this information helpful. BigCharts.com provides historical stock quotes. Either APA or MLA style can be used to complete the references on your Bibliography tab. There is a tutorial for APA and MLA style within the Plagiarism link, which can be accessed through the Syllabus Go to the Course Resources page within the Course-Specific Resources section. The Course Resources page is under Course Home. Complete your Title page on this tab. Please include your name, the course, the date, your instructor’s name, and the title for the project. Complete one paragraph, profiling each company’s business, including information such as a brief history, where they are located, number of employees, the products they sell, and so forth. Please reference any websites that you used for the Profiles on the Bibliography tab. Tootsie Roll Industries began in a small candy store in New York in 1896. Tootsie Roll is now headquartered in Chicago and primarily sells their products in the United States, Canada, and Mexico. According to Yahoo Finance, Tootsie Roll has 2,000 full-time employees. Tootsie Roll sells the following branded candy: Tootsie Roll, Tootsie Roll Pop, Charms Blow Pop, Mason Dots, Andes, Sugar Daddy, Charleston Chew, Double Bubble, Razzles, Caramel Apple Pop, and Junior Mints. Tootsie Roll had 2014 net product sales of $539.9 million. Hershey Company was founded by Milton S. Hershey in 1893 and is headquartered in Hershey, Pennsylvania. According to Yahoo Finance, Hershey has 20,800 full-time employees. Hershey is famous for Good & Plenty, Hershey Bar, Hershey’s Kisses, Hershey’s Bliss, Reese’s, Rolo, Twizzlers, Almond Joy, Kit Kat, and Ice Breakers. Hershey had net product sales of $7.4 billion for 2014. Use this Excel spreadsheet to compute ratios; show your computations for all ratios on this tab, and also include your commentary. The 2014 financial statements used to calculate these ratios are available in the Investor Relations section of the Tootsie Roll and Hershey websites. Tootsie Roll Hershey Interpretation and comparison between the two companies’ ratios (reading Chapter 13 will help you prepare the commentary). The comparison of the ratios is an important part of the project. A good approach is to briefly explain what the ratio tells us. Indicate whether a higher or lower ratio is better. Then compare the two companies on this basis. Remember—each ratio below requires a comparison. Earnings per Share of Common Stock (basic – common) As given in the income statement ## $ 3.91 Current Ratio Current assets ###### = ## = 1.16 Current liabilities ###### Gross (Profit) Margin Percentage Gross margin ###### = ## = 45.0% Net sales ###### Rate of Return (Net Profit Margin) on Sales Net income ###### = ## = 11.4% Net sales ###### Inventory Turnover Cost of goods sold ###### 5.2 5.6 Average inventory ###### times times Days’ inventory outstanding (DIO) 365 365 = 71 = 65 Inventory turnover 5.2 days days Accounts Receivable Turnover Net sales (assume all sales are credit sales) ###### = ## = 13.8 Average net accounts receivable ###### Days’ Sales Outstanding (DSO) 365 365 = ## = 26.4 Accounts receivable turnover 12.9 days days Asset turnover Net sales ###### = ## = 1.35 Average total assets ###### Rate of Return on Total Assets (ROA) Rate of return on sales times asset turnover = ## = 15.4% Debt Ratio Total Liabilities ###### = ## = 73.0% Total Assets ###### Times-Interest-Earned Ratio Income from operations ###### = ## = 16.6 Interest expense $99 Dividend Yield Dividend per share of common stock (Yahoo Finance 12/24/2015) $0.36 = ## = 2.6% (Please follow the Course Project instructions to calculate the current dividend yield.) Market price per share of common stock (Yahoo Finance 12/24/2015) $32.04 Rate of Return on Common Stockholders’ Equity (ROE) Net income – Preferred dividends ###### = ## = 54.0% Average common stockholders’ equity ###### Free cash flow Net cash provided by operating activities minus cash payments earmarked for investments in plant assets = ## ###### = Price-Earnings Ratio (Multiple) Market price per share of common stock as of 12/31/2014 $30.65 = 29 = 27 (Please see the Course Project instructions for the dates to use for this ratio.) Earnings per share $1.05 Your textbook and any information that you use to profile the companies should be cited as a reference below. Big Charts for Hershey (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default.asp?symb=hsy&closeDate=12%2F31%2F14&x=0&y=0 Big Charts for Tootsie Roll (12/31/2014). Retrieved December 24, 2015 from http://bigcharts.marketwatch.com/historical/default.asp?symb=tr&closeDate=12%2F31%2F14&x=0&y=0 Harrison, W.T., Horngren C.T. & Thomas, C.W. (2015). Financial Accounting, 10th ed. Upper Saddle River, NJ: Pearson Education, Inc. Hershey’s 2014 Annual Report (2015). Retrieved December 24, 2015 from http://www.thehersheycompany.com/pdfs/PDF_Proxy%20Statement_2014.pdf HSY Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=HSY+Profile HSY Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=hsy&ql=1 Tootsie Roll Industries 2014 Annual Report (2015). Retrieved December 24, 2015 from http://tootsie.com/financials/ TR Profile (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q/pr?s=TR+Profile TR Stock Price (2015). Retrieved December 24, 2015 from http://finance.yahoo.com/q?s=TR&ql=1 Devry ACCT504 Week 4 Midterm Latest Question 1. Question : (TCO A) Assets include prepaid insurance and prepaid rent. dividends paid to shareholders. loans obtained by the company. stockholders’ investment in the business. Question 2. Question : (TCO B) For 2014, CAP Corporation reported net income of $96,000; net sales $1,440,000; and weighted average shares outstanding of 9,600. There were no preferred dividends. What was the 2014 earnings per share? $100.00 $150.00 $10.00 $15.00 Question 3. Question : (TCO C) Issuing debt is an example of a(n) operating activity. investing activity. financing activity. noncash investing and financing activity. Question 4. Question : (TCO D) What is the correct order to create the financial statements? Balance Sheet, Income Statement, Statement of Retained Earnings, and Statement of Cash flows. Statement of Cash flows, Balance Sheet, Statement of Retained Earnings, and Income Statement. Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash flows. Income Statement, Balance Sheet, Statement of Retained Earnings, and Statement of Cash flows. Question 5. Question : (TCO E) Which of the following describes the normal balance and classification of the Accumulated Depreciation account? Debit, asset Credit, liability Credit, asset Debit, expense Question 6. Question : (TCO F) Which of the following items is handled as a deferral? Accrued Expenses Accrued Revenues Prepaid Expenses Depreciation Question 7. Question : (TCO A) XYZ Company recorded the following events involving a recent merchandise purchase. – Received goods for $50,000, terms 2/10, n/30. – Returned $1,000 of the shipment for credit due to damaged goods. – Paid $1,500 for freight-in. – Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory increased by $50,500. increased by 49,500. increased by $49,470. increased by $49,520. Question 8. Question : (TCO B) In a period of declining prices, which of the following inventory methods generally results in the highest gross profit figure? Average cost method LIFO FIFO Cannot be determined based on the information given Question 9. Question : (TCO A) On a classified balance sheet, which is the least liquid asset listed below? Inventories Cash and cash equivalents Accounts receivable, net Short-term investments Question 10. Question : (TCO E) Which of the following is an internal control procedure? Control environment Comparisons and compliance monitoring Promote operational efficiency Encourage employees to follow company policies Question 11. Question : (TCOs A and E) Your friend, Lisa, has hired you to evaluate the following internal control procedures. Explain to your friend whether each of the numbered items below is an internal control strength or weakness. You must also state which internal control procedure relates to each of the internal controls For the weaknesses, you also need to state a recommendation for improvement. (1) Paychecks are left on the desk for pick-up. (2) Supervisors count cash receipts daily. (3) Invoices are pre-numbered. (4) Bonding of the cashiers is required. (5) The accountant purchases and pays for supplies. (1) Weakness; limited access; recommend someone personally hand out the checks or require direct deposit. (2) Strength; comparisons and compliance monitoring. (3) Strength; adequate records. (4) Strength; smart hiring practices. (5) Weakness, separation of duties; someone other than the accountant should purchase the supplies and the accountant can pay for them. Question 12. Question : (TCOs E and F) Please prepare the following journal entries. Indicate which account should be debited and which account should be credited, along with the dollar amount of the debit and credit. (1) Investors invest $70,000 in exchange for 1,000 shares of common stock. (2) Company paid a utility bill for $2,000. (3) The unadjusted balance of the Supplies account is $5,200 and the total cost of supplies on hand is $4,000. (4) Company received $5,000 for services performed. (5) The company needs to record $15,000 for depreciation. Question 13. Question : (TCOs B and D) The following items are taken from the financial statements of Butler Company for 2012: Accounts Receivable $20,000 Cost of Goods Sold 95,000 Utilities Expense 3,500 Accounts Payable 7,000 Common Stock 100,000 Rent Expense 5,500 Advertising Expense 9,000 Dividends 10,000 Insurance Expense 2,000 Note Payable (due 2014) 50,000 Depreciation Expense 10,000 Prepaid Insurance 18,000 Accumulated Depreciation 30,000 Retained Earnings (beginning) 33,000 Salaries Expense 40,000 Salaries Payable 4,500 Net sales 170,000 Supplies 3,000 Supplies Expense 2,500 (b) Calculate the balance of Retained Earnings that would appear on a Balance Sheet at December 31, 2012. Retained Earnings, January 1 $33,000 Add: Net Income 2,500 35,500 Less: Dividends 10,000 Retained Earnings, December 31 $25,500 (c) Calculate the gross profit percentage. Net sales $170,000 Less Cost of Goods Sold 95,000 Gross profit 75,000 Gross profit percentage $75,000 divided by $170,000 equals 44.1%. Question 14. Question : (TCO D) The following items are taken from the financial statements of BGS Company for 2012: Cash $500,000 Accounts Receivable 200,000 Supplies 70,000 Accounts Payable 147,300 Unearned Service Revenue 18,000 Equipment, net of accumulated depreciation 212,000 Common Stock 500,000 Retained Earnings 12/31/2011 78,300 Long-term debt 142,400 Service revenue 240,000 Cost of Goods Sold 72,000 Rent expense 36,000 Supplies expense 12,000 Insurance expense 24,000 Instructions (a) Please create a classified balance sheet in good form for the year ended 2012. (25 points) (b) Please calculate the current ratio. (5 points) (a) Please create a classified balance sheet in good form for the year ended 2012. BGS Company Balance Sheet Year Ended December 31, 2012 Current assets: Cash $500,000 Accounts Receivables 200,000 Supplies 70,000 Total current assets 770,000 Equipment, net of accumulated depreciation 212,000 Total assets $982,000 Current liabilities: Accounts payable $147,300 Unearned service revenue 18,000 Total current liabilities 165,300 Long-term debt 142,400 Total liabilities 307,700 Shareholders’ equity: Common Stock 500,000 Retained Earnings 174,300 Total shareholders’ equity 674,300 Total liabilities and shareholders’ equity $982,000 (b) Please calculate the current ratio. Total current assets $770,000 Total current liabilities $165,300 Current ratio equals 4.66 Devry ACCT504 Week 8 Final Exam Latest Question 1. (TCO D) Please describe the purpose of the Income Statement and the interrelationship between the income statement and the other major financial statements that we covered in this class. In your answer, please also address which financial statements should be created before the Income Statement, if any, and which financial statements need to be completed after the Income Statement, if any. Question 2. Question : (TCO E) Your friend, Lisa, plans to open a nail salon. Lisa states that she does not have time to develop and implement a system of internal controls. (a) Explain to Lisa the components of internal control. (10 points) (b) Explain to Lisa at least 5 internal control procedures she must establish to protect herself against fraud. You should state specific internal control procedures from the textbook, and relate your answer to her nail salon business. (15 points) Question 3. Question : (TCO A) The following items are taken from the financial statements of PQR Company for 2013: Cash $100,000 Inventory 150,000 Accounts Payable 123,000 Accounts Receivable 40,000 Supplies 10,000 Salaries Payable 30,000 Unearned Revenue 75,000 Intangible assets 78,000 Property, plant, and equipment, net 156,000 Long term debt 50,000 Common Stock 25,000 Additional Paid in Capital 175,000 Retained Earnings, 12/31/2012 13,000 Service revenue 402,000 Cost of Goods Sold 250,000 Rent expense 48,000 Supplies expense 25,000 Insurance expense 36,000 Instructions: (1) Create a classified balance sheet in good form for the year ended 2013. (30 points) (2) Calculate the current ratio and debt ratio and explain your findings. (6 points) Question 4. Question : (TCO B) The Delta Company gathered the following condensed data for the year ended December 31, 2014: Cost of goods sold $300,000 Net sales 525,000 Administrative expenses 110,000 Interest expense 18,000 Common stock dividends paid 25,000 Selling expenses 52,000 Income tax percentage 33% Instructions: (1) Prepare a multiple-step income statement for the year ended December 31, 2014. (30 points) (2) Compute the gross margin percentage and net profit margin ratio. Delta Company’s assets at the beginning of the year were $800,000, and the total assets were $1,000,000 at the end of the year. To qualify for full credit, you must state the formula you are using, show your computations, and explain your findings. (6 points) Question 5. Question : (TCO C) This is a 2-part question. Part 1) Indicate which section of the statement of cash flows should contain each of the following items, and whether each item would result in an inflow or outflow of cash. The sections are Operating, Investing, and Financing. (30 points) (a) Amortization of a patent (b) Increase in accounts payable (c) Paid cash dividends to common stockholders (d) Purchased equipment with cash (e) Increase in inventory Part 2) Please explain how to calculate free cash flow and the importance of free cash flow to investors. (6 points) Question 6. Question : (TCO F) This is a 2-part question. Part 1) Journalize the adjusting entries below at year-end December 31, XXXX. Please share your supporting calculations for the adjusting entries requiring computations. (a) Beginning prepaid insurance, $500. Payments for insurance during the period are $900. Ending prepaid insurance is $600. (b) Interest revenue of $1,500 has been earned but not yet received. (c) Accrued Service Revenue of $12,000 (d) The weekly payroll is $20,000. Employees are owed for 4 days of a 5-day work week. The unadjusted balance of the Supplies account is $1,200. The total cost of supplies remaining is $300. (f) Equipment was purchased at the beginning of the year for $25,000. The equipment’s useful life is 5 years, and the residual value is $5,000. Record the depreciation for this year. (30 points) Part 2) Calculate the overall overstatement or understatement of net income if the above adjusting entries were not made. Please share your work. (6 points) Question 7. Question : (TCO G) Please review the following 6 ratios for Johnson Company and Lee Enterprises for the year ended 2014, and address the 2 questions below. Ratio Name Johnson Company Lee Enterprises (a) Accounts receivable turnover 6.5 5.3 (b) Days’ inventory outstanding 40 35 (c) Debt ratio 29.3% 25.7% (d) Return on common stockholders’ equity 14.7% 10.5% (e) Current ratio 2.50 3.60 (f) Price/Earnings ratio 10 12 Instructions: This is a 2-part question. (1) Explain the meaning of each of the Johnson Company ratios above. (18 points) (2) State which company performed better for each ratio. (18 points) Instructions: This is a 2-part question. (1) Explain the meaning of each of the Johnson Company ratios above. (18 points) (2) State which company performed better for each ratio. (18 points)