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 o
.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 co
ect
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
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following information:
Your name
Your student ID numbe
The exam numbe
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 o
.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
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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 easie
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, o
completing the math. Remember that instructors are available to help you!
If your mistakes are careless, go back over the work slowly until the e
o
is found.
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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 you
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
XXXXXXXXXXCash
1200 Accounts Receivable
1300 Direct Materials
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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)
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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
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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
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2200 Salaries Payable —
2300 FWT Payable 1,613.11
2325 FICA Tax Payable XXXXXXXXXX
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 XXXXXXXXXX192,575.09
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
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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
Employe
Taxes
Net
Pay
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Direct
Labor
Totals
Sales
Salaries
Officers'
Salaries
Office
Salaries
Totals
To obtain the Schedule of Employer Payroll Tax Allocation, go to the
Financial Accounting (pfli
ary.pennfoster.edu/c.php?g=904823&p=65133
73) section of the Penn Foster Li
ary 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 XXXXXXXXXXXXX.XX
Total Operating Revenue $ XX,XXX.XX
Cost
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https:
pfli
ary.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