Project Part 2Howie Stars produces starts for elementary teachers to reward their students. Howie Stars' trial balance on June 1 follows:HOWIE STARS Trial Balance June 1, 2012BalanceAccount TitleDebitCreditCash$14,000Accounts receivable155,000Inventories: Materials5,700 Work in process39,400 Finished goods20,400Plant assets200,000Accumulated depreciation$72,000Accounts payable127,000Wages payable1,700Common stock142,000Retained earnings91,800Sales revenue—Cost of goods sold—Manufacturing overhead—Marketing and general expenses—Total$434,500434,500June 1 balances in the subsidiary ledgers were as follows:– Materials subledger: Paper, $4,700; indirect materials, $1,000– Work in process subledger: Job 120, $39,400; $0 for Job 121 – Finished goods subledger: Large Stars, $9,400; Small Stars, $11,000June transactions are summarized as follows:a. Collections on account, $152,000.b. Marketing and general expenses incurred and paid, $28,000.c. Payments on account, $36,000.d. Materials purchases on credit: Paper, $22,900; indirect materials, $3,800.e. Materials used in production (requisitioned): – Job 120: paper , $850 – Job 121: paper, $7,650 – Indirect materials, $1,000 f. Wages incurred and assigned during June, $35,000. Labor time records for the month: Job 120, $3,500; Job 121, $16,600; indirect labor, $14,900.g. Wages paid in June include the balance in the Wages payable account at May 31 and $32,200 of wages incurred during June.h. Depreciation on plant and equipment, $2,600.i. Manufacturing overhead was allocated at the predetermined rate of 50% of direct labor cost.j. Jobs completed during the month: Job 120, 300,000 Large Stars at total cost of $45,500.k. Credit sales on account: all of Job 120 for $111,000.l. Closed the Manufacturing overhead account to Cost of goods sold.Requirements:1. Journalize the transactions for the company. Howie uses a perpetual inventory system.2. Open T-accounts for the general ledger, the Materials ledger, the Work in process ledger, and the Finished goods ledger. Insert each account balance as given, and use the reference Bal. Post the journal entries to the T-accounts using the transaction letters as a reference.3. Prepare a trial balance at June 30, 2012.4. Use the Work in process inventory T-account to prepare a schedule of cost of goods manufactured for the month of June.5. Prepare an income statement for the month of June. AC1320: Project Page 1 PROJECT DESCRIPTION In order to assess your knowledge of the fundamentals of financial and managerial accounting, two projects have been included in the course. These chapters will give you an opportunity to apply your knowledge and improve your proficiency in performing routine accounting procedures and managerial tasks. The project aims at simulating the main managerial accounting concepts, principles, and procedures covered in the prescribed text and encountered in practice. Project Part 1 Introduction: Yo ...

1. Project Part 2Howie Stars produces starts for elementary
teachers to reward their students. Howie Stars' trial balance on
June 1 follows:HOWIE STARS
Trial Balance
June 1, 2012BalanceAccount
TitleDebitCreditCash$14,000Accounts
receivable155,000Inventories: Materials5,700 Work in
process39,400 Finished goods20,400Plant
assets200,000Accumulated depreciation$72,000Accounts
payable127,000Wages payable1,700Common
stock142,000Retained earnings91,800Sales revenue—Cost of
goods sold—Manufacturing overhead—Marketing and general
expenses—Total$434,500434,500June 1 balances in the
subsidiary ledgers were as follows:– Materials subledger: Paper,
$4,700; indirect materials, $1,000– Work in process subledger:
Job 120, $39,400; $0 for Job 121 – Finished goods subledger:
Large Stars, $9,400; Small Stars, $11,000June transactions are
summarized as follows:a. Collections on account, $152,000.b.
Marketing and general expenses incurred and paid, $28,000.c.
Payments on account, $36,000.d. Materials purchases on credit:
Paper, $22,900; indirect materials, $3,800.e. Materials used in
production (requisitioned):
– Job 120: paper , $850
– Job 121: paper, $7,650
– Indirect materials, $1,000 f. Wages incurred and
assigned during June, $35,000. Labor time records for the
month: Job 120, $3,500; Job 121, $16,600; indirect labor,
$14,900.g. Wages paid in June include the balance in the Wages
payable account at May 31 and $32,200 of wages incurred
during June.h. Depreciation on plant and equipment, $2,600.i.
Manufacturing overhead was allocated at the predetermined rate
of 50% of direct labor cost.j. Jobs completed during the month:
Job 120, 300,000 Large Stars at total cost of $45,500.k. Credit
sales on account: all of Job 120 for $111,000.l. Closed the

2. Manufacturing overhead account to Cost of goods
sold.Requirements:1. Journalize the transactions for the
company. Howie uses a perpetual inventory system.2. Open T-
accounts for the general ledger, the Materials ledger, the Work
in process ledger, and the Finished goods ledger. Insert each
account balance as given, and use the reference Bal. Post the
journal entries to the T-accounts using the transaction letters as
a reference.3. Prepare a trial balance at June 30, 2012.4. Use the
Work in process inventory T-account to prepare a schedule of
cost of goods manufactured for the month of June.5. Prepare an
income statement for the month of June.
AC1320: Project
Page 1
PROJECT DESCRIPTION
In order to assess your knowledge of the fundamentals of
financial and managerial accounting,
two projects have been included in the course. These chapters
will give you an opportunity to
apply your knowledge and improve your proficiency in
performing routine accounting
procedures and managerial tasks. The project aims at simulating
the main managerial
accounting concepts, principles, and procedures covered in the
prescribed text and

3. encountered in practice.
Project Part 1 Introduction:
You need to research two corporations using the ITT Tech
Virtual Library. Once you have
identified the two corporations, you will have to find the
financial statements, income
statement, balance sheet, and statement of cash flows. You will
then identify from the
statement of cash flows if the corporation uses the indirect or
direct method. You will also
identify how much cash was generated from operations,
financing, and investing. You should
also specify how much free cash flow each corporation has
generated. You should then
calculate the current ratio, inventory turnover, gross profit
percentage days’ sales in
receivables, and debt ratio. You must choose which corporation
you would invest in and why.
Project Part 2 Introduction:
You will be given a set of transactions for a company, based on
which you will have to prepare
journal entries, open T-accounts, and post the journal entries to
the accounts. You will then

4. prepare a trial balance for the end of the month. Using the
work-in-process T-account, you will
prepare a schedule for cost of goods sold manufactured for the
month. You will also prepare an
income statement for the month and post any corrections that
may be needed for under/over
allocated manufacturing overhead.
Course Objectives Tested:
1. Identify characteristics of a corporation, record issuance of
stock, and illustrate retained
earnings transactions.
2. Prepare and analyze the income statement, balance sheet, and
statement of cash flows.
AC1320: Project
Page 2
3. Distinguish between managerial accounting and financial
accounting and apply ethical
standards to decision making.
4. Differentiate between job order costing and process costing.
5. Perform Cost-Volume-Profit (CVP) analysis and calculate

5. break-even point; describe a
Just-In-Time production system and develop activity-based
costs (ABC).
6. Examine relevant factors for making short-term special
business decisions.
Please refer to the Project Submission Plan for project details.
PROJECT SUBMISSION P LAN
Project
Part
Description/Requirements of Project Part
1 Task 1: Statement of Cash Flows
Use ITT Tech Virtual Library and research two public
companies. Review the
statements of cash flows and report on how much cash was
generated
from operating, investing, and financing activities. Remember
to cite the
source where you found the required information.
Task 2: Calculating Financial Ratios
Calculate a set of financial ratios for each of the two public

6. companies you
researched. Also, calculate the following set of ratios:
Current ratio
Inventory turnover
Gross profit percentage
Days’ sales in receivables
Debt ratio
Task 3: In 50-75 words, explain which corporation you would
invest in and
why.
Submission Requirements:
AC1320: Project
Page 3
Project
Part
Description/Requirements of Project Part
Complete Task 2 in an MS Excel worksheet and submit it on
Questa to

7. your instructor.
Complete Task 1 and Task 3 in an MS Word document and
submit it on
Questa to your instructor.
Due: Week 3
Grading Weight: 12.5%
2 Refer to Project_Part 2.xlsx to view the complete project.
Then do the
following:
Prepare journal entries for the transactions
Open T-accounts for the general ledger
Post the journal entries to the accounts
You will then prepare a trial balance for the end of the month.
Using the
work-in-process T-account, you will prepare a schedule for cost
of goods
sold and manufactured for the month.
You will then prepare an income statement for the month and
post any
corrections that may be needed for under/over allocated
manufacturing

8. overhead.
Submission Requirements:
Complete the required tasks in an MS Excel worksheet and
submit the
worksheet on Questa to your instructor.
Due: Week 6
Grading Weight: 12.5%
(End of Project Description)
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0/Project_Part_2.xlsx