Cookie Creations Ch. 11 & 14 (EXCEL ONLY)

***PLEASE FOLLOW UPLOADED INSTRUCTIONS & GRADING RUBRIC EXPLICITEDLY!***
*** REFERENCE ALL PREVIOUS COOKIE CREATION UPLOADS***

Assignment
Unit VII Case Study
Weight: 10% of course grade
Grading Rubric
Due: Tuesday, 02/02/2021 11:59 PM (CST)
Instructions
Cookie Creations (Chapters 11 and 15)
This assignment is a continuation of the Cookie Creations case study and focuses on Cookie Creations’ liabilities (current and long-term). From the information gathered from the unit lesson, required unit resources, and suggested unit resources, read the Cookie Creations case study below, which is also available on p.11-37 (Chapter 11) and p. 15-38 (Chapter 15) in the textbook.

The case study allows you to apply what you have learned about liabilities and the accounting process. This assignment will allow you to practice what you have learned so far.

Part I
Recall that Cookie Creations sells fine European mixers that it purchases from Kzinski Supply Company. Kzinski warrants the mixers to be free of defects in material and workmanship for 1 year from the date of original purchase. If the mixer has such a defect, Kzinski will repair or replace the mixer free of charge for parts and labor. The product must be shipped prepaid to an authorized Kzinski service center. The consumer pays the cost to ship the mixer. The cost to return the product to the consumer is paid by Kzinski.

The authorized service center is located in Boston. Because Cookie Creations values serving its customers, it pays the shipping to Boston for any mixers needing repair under Kzinski’s warranty terms. Based on past experience, Kzinski has found that approximately 10% of mixers are returned for repair or replacement. The average cost to ship a mixer to Boston is $60.

The following transactions take place in 2020 and 2021.

A total of 30 mixers are sold in 2020.
Four of the mixers sold in 2020 are returned for repair in 2021. The total shipping cost for returning these four mixers to Boston is $210.
A total of 40 mixers are sold in 2021.
Two of the mixers sold in 2021 are returned for repair in 2021. The total shipping cost for returning these two mixers to Boston is $55.
For Part I of the assignment, complete the tasks listed below using Excel.

Calculate Cookie Creations’ warranty liability for the shipping costs at December 31, 2020.
Record the estimated warranty liability at December 31, 2020.
Prepare the summary journal entry (or entries) to record the shipment of the six mixers (four from the 2020 sales and two from the 2021 sales) for warranty repair in 2021. d.
Calculate Cookie Creations’ warranty liability at December 31, 2021. (Hint: Note that there is no liability outstanding for the mixers sold in 2020. The 1-year warranty period has expired.)
Record the estimated warranty liability at December 31, 2021. (Hint: Similar to accounting for bad debts, consider any existing balance in the warranty liability account when you prepare your entry. You will find it helpful to prepare a general ledger account for the warranty liability and to post the above transactions.)
Part II
Natalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about buying a commercial oven. They know which oven they want and that it will cost $17,000. The company already has $5,000 set aside for the purchase and will need to borrow the rest.

Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2020, for 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,000 on May 1 and November 1 of each year plus 6 months of interest.

For Part II of the assignment, complete the tasks listed below.

Prepare a payment schedule for the life of the note.
Prepare the journal entry for the purchase of the oven and the issue of the note payable on November 1, 2020.
Prepare the journal entries on May 1 and November 1 for the note.
Determine the current portion of the note payable and the long-term portion of the note payable at October 31, 2021.
Parts I and II should be submitted in a single Excel spreadsheet. You will use a new tab to complete each transaction for both Parts I and II for a total of nine separate tabs or sheets. Submit the Excel spreadsheet in Blackboard.

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Unit VII Case Study Grading Rubric
Criteria Achievement Level
Level 1 Level 2 Level 3 Level 4 Level 5
Analysis
(40 points)
0 – 23
Presents an account containing little analysis or relevant argument; interpretation is not well supported. Course concepts and analytical tools are not applied appropriately.
24 – 27
Presents an account that is descriptive but contains little analysis or relevant arguments; interpretation is not well supported. Course concepts and analytical tools are not applied appropriately.
28 – 31
Presents an analysis containing relevant arguments; interpretation is not thoroughly supported and not compelling. Course concepts and analytical tools are sometimes applied appropriately.
32 – 35
Presents a thorough analysis with effective arguments; interpretation is both reasonable and compelling. Course concepts and analytical tools are often applied appropriately.
36 – 40
Presents an insightful and thorough analysis with strong arguments and evidence; interpretation is both reasonable and compelling. Course concepts and analytical tools are expertly applied.
Content
(35 points)
0 – 20
Content is often irrelevant; information may be noticeably incorrect and/or off-topic.
21 – 24
Content is somewhat relevant and informative; may stray off topic a few times.
25 – 27
Content is mostly relevant and informative; may stray off topic one or two times.
28 – 31
Content is relevant and informative; may stray slightly off topic one time.
32 – 35
Content is highly relevant and informative; remains on topic.
Accuracy
(15 points)
0 – 8
Most of the assignment is clearly inaccurate and lacks attention to detail.
9 – 10
Several areas of the assignment may be slightly lacking in accuracy and/or attention to detail.
11 – 11
Most of the assignment is fairly accurate and shows fair attention to detail.
12 – 13
Most of the assignment is accurate and shows good attention to detail.
14 – 15
Accuracy is excellent and close attention to detail is clearly evident in all parts of the assignment.
Writing Mechanics
(10 points)
0 – 5
Writing lacks clarity and conciseness. Serious problems with sentence structure and grammar. Numerous major and/or minor errors in punctuation and spelling.
6 – 6
Writing lacks clarity and/or conciseness. Contains minor problems with sentence structure and some grammatical errors as well as several minor errors in punctuation and spelling.
7 – 7
Writing is mostly clear and concise. Sentence structure and grammar are strong and mostly correct. There may be 3 or 4 minor errors in punctuation and/or spelling.
8 – 8
Writing is clear and concise. Sentence structure and grammar are strong. There may be 1-2 minor punctuation errors and/or spelling errors.
9 – 10
Writing is clear and concise. Sentence structure and grammar are excellent. Correct use of punctuation. No spelling errors.