The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows

The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows:

Assets June 30, 2010 June 30, 2009
Cash----- 41600 28200
A/R (Net) ----121900 110700
Inventories---------- 175600 170500
Investments---------- 0 60000
Land -------174000 0
Equipment---------- 258000 210600
Accumulated Depreciation--------- -58300 -49600
Total------------ 712800 530400


Liabilities & Stockholders Equity
A/P (Merchandise Creditors) ----------121000 114200
Accrued Expense Payable (Operating Expense)------------ 18000 15800
Dividends Payable--------------- 15000 12000
Common Stock, $1 Par--------------- 67200 60000
Paid-In Capital In Excess Of Par - Common Stock------- 264000 120000
Retained Earnings ------------227600 208400
Total---------- 712800 530400

The following additional information was taken from the records of House Construction Co.:

A. Equipment and land were acquired for cash.
B. There were no disposals of equipment during the year.
C. The investments were sold for $54,000 cash.
D. The common stock was issued for cash.
E. There was a $79,200 credit to Retained Earnings for net income.
F. There was a $60,000 debit to Retained Earnings for cash dividends declared.

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

B. Prepare ratios as required

Check: Net Cash Flow from Operating Activities $86,600

Click here for the solution: The comparative balance sheet of House Construction Co. for June 30, 2010 and 2009, is as follows

The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below

E4-1 The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below.

Other data:
A physical count reveals $300 of supplies on hand.
$100 of the unearned revenue is still unearned at month-end.
Accrued salaries are $280.

Instructions
Complete the worksheet

Click here for the solution: The trial balance columns of the worksheet for Briscoe Company at June 30, 2008, are below

Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow

E1-18 Using the accounting equation to analyze business transactions

Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow:

May 31, 2012 June 30, 2012
Total assets $177,000 $213,000
Total liabilities $ 122,000 $144,000

Requirement
1. Following are three situations about stockholders’ investments and dividends of
the business during June. For each situation, compute the amount of net income
or net loss during June 2012.

a. The company issued $6,000 of common stock and paid no dividends.
b. The company issued no common stock. It paid dividends of $10,000.
c. The company issued $18,000 of common stock and paid dividends of $20,000.

Click here for the solution: Great City Builders, Inc., balance sheet data at May 31, 2012, and June 30, 2012, follow

Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2011, for $426,000

Problem 7-7 Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2011, for $426,000. On that date, Shea Company had retained earnings in the amount of $60,000, and the fair value of its recorded assets and liabilities was equal to their book value. The excess of implied over the fair value of the recorded net assets was attributed to an unrecorded manufacturing formula held by Shea Company, which had an expected remaining useful life of five years from June 30, 2011.

Financial data for 2013 are presented here:
Parsons Company Shea Company
Sales $2,555,500 $1,120,000
Dividend Income 54,000 -0-
Total Revenue 2,609,500 1,120,000
Cost of Goods Sold 1,730,000 690,500
Expenses 654,500 251,000
Total Cost and Expenses 2,384,500 941,500
Net Income $ 225,000 $ 178,500
1/1 Retained Earnings $ 595,000 $ 139,500
Net Income 225,000 178,500
Dividends Declared (100,000) (60,000)
12/31 Retained Earnings $ 720,000 $ 258,000
Cash $ 119,500 $ 132,500
Inventory 362,000 201,000
Other Current Assets 40,500 13,000
Land 150,000 -0-
Investment in Shea Company 426,000 -0-
Property and Equipment 825,000 241,000
Accumulated Depreciation (207,000) (53,500)
Total Assets $2,058,000 $ 659,000
Accounts Payable $ 295,000 $ 32,000
Other Liabilities 43,000 19,000
Capital Stock 1,000,000 300,000
Additional Paid-in Capital -0- 50,000
Retained Earnings 720,000 258,000
Total Liabilities and Equity $2,058,000 $ 659,000

On December 31, 2011, Parsons Company sold equipment (with an original cost of $100,000 and accumulated depreciation of $50,000) to Shea Company for $97,500. This equipment has since been depreciated at an annual rate of 20% of the purchase price. During, 2012 Shea Company sold land to Parsons Company at a profit of $15,000.

The inventory of Persons Company on December 31, 2012, included goods purchased from Shea Company on which Shea Company recognized a profit of $7,500. During 2013, Shea sold goods to Parsons Company for $375,000, of which $60,000 was unpaid on December 31, 2013. The December 31, 2013, inventory of Persons Company included goods acquired from Shea Company on which Shea Company recognized a profit of $10,500.

Required:
A. Prepare a consolidated financial statement workpaper for the year ended December 31, 2013.
B. Prepare a schedule to calculate consolidated retained earnings on December 31, 2013, using an analytical or t-account approach. (Hint: Due to rounding, you may be out of balance by $1. To avoid this, you should carry decimal until the final calculation.)

Click here for the solution: Parsons Company acquired 90% of the outstanding common stock of Shea Company on June 30, 2011, for $426,000

On January 1, 2011, Lowry Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, payable semiannually on June 30 and December 31

On January 1, 2011, Lowry Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, payable semiannually on June 30 and December 31. The bonds were sold to yield 10%. Table values are:

Present value of 1 for 10 periods at 8% 0.46319
Present value of 1 for 10 periods at 10% 0.38554
Present value of 1 for 20 periods at 4% 0.45639
Present value of 1 for 20 periods at 5% 0.37689
Present value of annuity for 10 periods at 8% 6.71008
Present value of annuity for 10 periods at 10% 6.14457
Present value of annuity for 20 periods at 4% 13.59033
Present value of annuity for 20 periods at 5% 12.46221

Instructions
(a) Calculate the issue price of the bonds.

Click here for the solution: On January 1, 2011, Lowry Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, payable semiannually on June 30 and December 31