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Case Problem Capricorn Inc. is a private company reporting under ASPE. Its unadjusted trial balance at its fiscal year end, December 31, 2023 is shown below: Capricorn Inc. Unadjusted Trial Balance December 31, 2023 Debit Credit Cash $38,000 Inventory 46,500 Supplies 5,000 Building 600,000 Accumulated depreciation building 120,000 Equipment 330,000 Accumulated depreciation equipment $66,000 Accounts payable 34,000 Dividends payable 0 Interest payable 0 Income tax payable 0 Unearned revenue 30,600 Bonds payable (maturity date January 1, 2029) 500,000 Preferred shares ($4 noncumulative, 1,000 issued) 40,000 Common shares (120,000 issued) 60,000 Retained earnings 73,000 Cash dividends preferred 0 Cash dividends common 0 Sales 515,000 Cost of goods sold 159,000 Depreciation expense 20,000 Income tax expense 0 Insurance expense 8,200 Interest expense 1,800 Rent expense 32,600 Salaries expense 185,000 Supplies expense 12,500 TOTALS $1,438,600 $1,438,600 No new shares were issued or reacquired during 2023. The following transactions have not yet been recorded for 2023: 1. On December 31, 2023, the board of directors declared a total cash dividend of $54,000 2. The bonds were issued at par with a contract interest rate of 4%. Interest is paid semi-annually on July 1 and January 1. 3. The income tax rate for 2023 is 20% Required: Using a blank MS Excel workbook, answer the following questions: 1. Prepare the adjusting entries required for December 31, 2023 (7 marks) 2. Prepare the closing entries for December 31, 2023 (5 marks) 3. Prepare an income statement for the year ended December 31, 2023 (11 marks) 4. Prepare a statement of retained earnings for the year ended December 31, 2023 (5 marks) 5. Prepare a classified balance sheet at December 31, 2023 (17 marks) 6. Calculate Capricorns earnings per share for 2023. (3 marks)

Required:

Set up a table in MS Excel with all relevant information. Use the table to answer the following questions in MS Excel. Use Excel formulas to support your calculation whenever possible

1. Were the bonds issued at a discount or premium? How do you know?
2. What is the face value of the bonds?
3. What is the contractual rate of interest?
4. Calculate the missing amounts for items [1] through [5] in the amortization table
5. What was the market interest rate when the bonds were issued?
6. Prepare the journal entry to record the issue the bonds on January 1, 2023
7. Prepare the journal entry to record the first interest payment on July 1, 2023
8. Prepare the journal entry to record the accrual of interest on December 31, 2023
9. What amounts would be reported as current and as noncurrent liabilities on Mansons December 31, 2023 balance sheet?

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