Reference no: EM131786428

Assignment

Case: BTown Coach Service

Required

PART I - DUE SEPTEMBER 20TH

1. Prepare all journal entries in good form for the two month period from November 1 through December 31, 2015. Please prepare any adjusting journal entriesin chronological order. The closing entry is not necessary.

2. Using the journal entries and the data provided by Martha, prepare an income statement, for the two months ended December 31, 2015, and balance sheet at December 31, 2015.

3. Prepare all the journal entries in good form for January 2016, including any adjusting journal entries. Record one revenue entry, one entry for the purchase of diesel fuel, and one entry for the compensation to the bus drivers for the entire month.

4. Prepare an income statement for the month ended January 31, 2016, and a balance sheet at January 31, 2016.

5. Calculate the net increase in Cash during the period from the date the company was formed to the balance sheet date of January 31. How much of this increase came from or was used by operating activities, how much from investing activities, and how much from financing activities?

PART II - DUE DECEMBER 1ST

1. Why is BTown's method of accounting for parts inventory appropriate? Discuss.

2. How should BTown account for the software development costs? Show all appropriate journal entries under GAAP. If BTown used IFRS instead of USGAAP, would the accounting for the software be the same or different as of March 31, 2016? Explain.

3. BTown expects the Manchester routes to be at 85% capacity in February. Estimate net income for February. Assume all tickets are round trip and 50% are advance tickets (50% point of purchase) and that none of these 85% riders had a ticket before February (they all purchased their ticket via credit card in February). BTown expects to continue to run only 3 round trips/day in February. In addition,consider all estimable expenses but assume utilities, wi-fi, and parts used are the same as in January (use the same expense for both months).

4. Compute the new depreciation expense for the buses and building for the month of March 2016 and create the new journal entry for March 2016. What is the book value of these assets as of March 31st, 2016?

5. What is the amount that BTown should capitalize (if anything) for the new repair shop completed March 31st, 2016? If an amount should be capitalized, why does BTown capitalize these expenditures as opposed to expensing them immediately?

6. Create a bank reconciliation for the month ended January 31st, 2016. Use your cash balance from the balance sheet created in Part I, Question 4 above as your starting book balance. What is the correct ending book cash balance?

Attachment:- BTown-Coach-Case.rar