The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007

E15-15 (Dividend Entries) The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007.

Current Assets $540,000
Investments $624,000
Common Stock (par value $10) $500,000
Paid in Capital in excess of par $150,000
Retained Earnings $840,000

Instructions
Prepare the required journal entries for the following unrelated items.
a.) A 5% stock dividend is declared and distributed at a time when the market value of the shares is $39 per share.
b.) The par value of the capital stock is reduced to $2 with a 5-for-1 stock split.
c.) A dividend is declared January 5, 2008, and paid January 25, 2008 in bonds held as an investment. The bonds have a book value of $100,000 and a fair market value of $135,000.

Click here for the solution: The following data were taken from the balance sheet accounts of Masefield Corporation on December 31, 2007

At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following

E2-9 At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following.
1. May 1 inventories-finished goods $12,600, work in process $14,700, and raw materials $8,200.
2. May 31 inventories-finished goods $9,500, work in process $17,900, and raw materials $7,100.
3. Debit postings to work in process were: direct materials $62,400, direct labor $32,000, and manufacturing overhead applied $40,000.
4. Sales totaled $200,000.

Required:
a) Prepare a condensed cost of goods manufactured schedule.
b) Prepare an income statement for May through gross profit.
c) Indicate the balance sheet presentation of the manufacturing inventories at May 31, 2008.

Click here for the solution: At May 31, 2008, the accounts of Hannifan Manufacturing Company show the following

An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts of Conard Corp

An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts of Conard Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary. Indicate how each item should be classified in the statement of cash flows using the four major classifications listed to the right.

a. Payment of interest on notes payable
b. Exchange of land for patent
c. Sale of building at book value
d. Payment of dividends
e. Depreciation
f. Receipt of dividends on investment in stock
g. Receipt of interest on notes receivable
h. Issuance of capital stock
i. Amortization of patent
j. Issuance of bonds for land
k. Purchase of land
l. Conversion of bonds into common stock
m. Loss on sale of land
n. Retirement of bonds

Click here for the solution: An analysis of comparative balance sheets, the current year’s income statement, and the general ledger accounts of Conard Corp

Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009

P10-2 (Classification of Acquisition Costs) Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009, had the following balances.

Land $ 300,000
Land improvements 140,000
Buildings 1,100,000
Machinery and equipment 960,000

During 2010 the following transactions occurred.
1. A tract of land was acquired for $150,000 as a potential future building site.
2. A plant facility consisting of land and building was acquired from Mendota Company in exchange for 20,000 shares of Lobo’s common stock. On the acquisition date, Lobo’s stock had a closing market price of $37 per share on a national stock exchange. The plant facility was carried on Mendota’s books at $110,000 for land and $320,000 for the building at the exchange date. Current appraised values for the land and building, respectively, are $230,000 and $690,000.
3. Items of machinery and equipment were purchased at a total cost of $400,000. Additional costs were incurred as follows.
Freight and unloading $13,000
Sales taxes 20,000
Installation 26,000
4. Expenditures totaling $95,000 were made for new parking lots, streets, and sidewalks at the corporation’s various plant locations. These expenditures had an estimated useful life of 15 years.
5. A machine costing $80,000 on January 1, 2002, was scrapped on June 30, 2010. Double-declining balance depreciation has been recorded on the basis of a 10-year life.
6. A machine was sold for $20,000 on July 1, 2010. Original cost of the machine was $44,000 on January 1, 2007, and it was depreciated on the straight-line basis over an estimated useful life of 7 years and a salvage value of $2,000.

Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.
Land
Land improvements
Buildings
Machinery and equipment
(Hint: Disregard the related accumulated depreciation accounts.)

(b) List the items in the fact situation that were not used to determine the answer to (a), showing the pertinent amounts and supporting computations in good form for each item. In addition, indicate where, or if, these items should be included in Lobo’s financial statements.
(AICPA adapted)

Click here for the solution: Selected accounts included in the property, plant, and equipment section of Lobo Corporation’s balance sheet at December 31, 2009

At the end of its first year of operations on December 31, 2010, CNU Company's accounts show the following

P12-2A At the end of its first year of operations on December 31, 2010, CNU Company's accounts show the following.

Partner Drawings Capital
Reese Caplin 23,000 48,000
Phyllis Newell 14,000 30,000
Betty Uhrich 10,000 25,000

The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2010 has not been closed to the partners' capital accounts.

 a. Journalize the entry to record the division of net income for the year 2010 under each of the following independent assumptions.
1. Net income is $30,000. Income is shared 6 : 3 : 1.
2. Net income is $37,000. Caplin and Newell are given salary allowances of $15,000 and $10,000, respectively. The remainder is shared equally.
3. Net income is $19,000. Each partner is allowed interest of 10% on beginning capital balances. Caplin is given a $12,000 salary allowance. The remainder is shared equally.

b. Complete the schedule showing the division of net income under assumption (3) above.

c. Complete the partners' capital statement for the year under assumption (3) above.

Click here for the solution: At the end of its first year of operations on December 31, 2010, CNU Company's accounts show the following

At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet

P10-1 (Classification of Acquisition and Other Asset Costs) At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet had the following balances.

Land $230,000
Buildings 890,000
Leasehold improvements 660,000
Machinery and equipment 875,000

During 2010 the following transactions occurred.
1. Land site number 621 was acquired for $850,000. In addition, to acquire the land Reagan paid a $51,000 commission to a real estate agent. Costs of $35,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for $13,000.

2. A second tract of land (site number 622) with a building was acquired for $420,000. The closing statement indicated that the land value was $300,000 and the building value was $120,000. Shortly after acquisition, the building was demolished at a cost of $41,000. A new building was constructed for $330,000 plus the following costs.

Excavation fees $38,000
Architectural design fees 11,000
Building permit fee 2,500
Imputed interest on funds used during construction (stock financing) 8,500

The building was completed and occupied on September 30, 2010.

3. A third tract of land (site number 623) was acquired for $650,000 and was put on the market for resale.

4. During December 2010 costs of $89,000 were incurred to improve leased office space. The related lease will terminate on December 31, 2012, and is not expected to be renewed. (Hint: Leasehold improvements should be handled in the same manner as land improvements.)

5. A group of new machines was purchased under a royalty agreement that provides for payment of royalties based on units of production for the machines. The invoice price of the machines was $87,000, freight costs were $3,300, installation costs were $2,400, and royalty payments for 2010 were $17,500.

Instructions
(a) Prepare a detailed analysis of the changes in each of the following balance sheet accounts for 2010.

Land Leasehold improvements
Buildings Machinery and equipment

Disregard the related accumulated depreciation accounts.

(b) List the items in the situation that were not used to determine the answer to (a) above, and indicate where, or if, these items should be included in Reagan's financial statements.

Click here for the solution: At December 31, 2009, certain accounts included in the property, plant, and equipment section of Reagan Company's balance sheet

The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows

The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows.

Preferred Stock (8%, $100 par noncumulative, 5,000 shares authorized) $300,000
Common Stock ($5 stated value, 300,000 shares authorized) 1,000,000
Paid-in Capital in Excess of Par Value - Preferred Stock 15,000
Paid-in Capital in Excess of Stated Value - Common Stock 480,000
Retained Earnings 688,000
Treasury Stock - Common (5,000 shares) 40,000

During 2010 the corporation had these transactions and events pertaining to its stockholders' equity.

Feb. 1 Issued 5,000 shares of common stock for $30,000.
Mar. 20 Purchased 1,000 additional shares of common treasury stock at $7 per share.
Oct. 1 Declared a 8% cash dividend on preferred stock, payable November 1.
Nov. 1 Paid the dividend declared on October 1.
Dec. 1 Declared a $0.50 per share cash dividend to common stockholders of record on December 15, payable December 31, 2010.
Dec. 31 Determined that net income for the year was $280,000. Paid the dividend declared on December 1.

Instructions
(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)
(b) Enter the beginning balances in the accounts and post the journal entries to the stockholders’ equity accounts. (Use T accounts.)
(c) Prepare the stockholders’ equity section of the balance sheet at December 31, 2010.
(d) Calculate the payout ratio, earnings per share, and return on common stockholders’ equity ratio. (Note: Use the common shares outstanding on January 1 and December 31 to determine the average shares outstanding.)

Click here for the solution: The stockholders' equity accounts of Sigma Corporation on January 1, 2010, were as follows

Accounts are listed below for a foreign subsidiary that maintains its books in its local currency

Exercise 13-1 Identifying the Exchange Rate

Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming that the functional currency was identified (a) as the U.S. dollar and (b) as the foreign entity’s local currency. Use the following letters to identify the exchange rate:

H—historical exchange rate
C—current exchange rate
A—average exchange rate for the current period
Exchange Rate if the
Functional Currency Is:
Account U.S. Dollar Local Currency

Cash _____ __________
Accounts receivable _____ __________
Inventory carried at cost _____ __________
Inventory carried at market _____ __________
Prepaid rent _____ __________
Property, plant, and equipment _____ __________
Goodwill _____ __________
Accounts payable _____ __________
Bonds payable _____ __________
Unamortized premium on bonds payable _____ __________
Preferred stock carried at issuance price _____ __________
Common stock _____ __________
Sales _____ __________
Cost of goods sold _____ __________
Depreciation expense

Click here for the solution: Accounts are listed below for a foreign subsidiary that maintains its books in its local currency

(Case-It Co) The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010

PR 6-1A The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010:

Cash $37,700 Sales Returns and Allowances $37,800
Accounts Receivable 111,600 Sale Discounts 19,800
Merchandise Inventory 180,000 Cost of Merchandise Sold 1,926,000
Office Supplies 5,000 Sales Salaries Expense 378,000
Prepaid Ins. 12,000 Advertising Expense 50,900
Office Equipment 115,200 Depreciation Exp - Store Equip 8,300
Accumulated Depreciation - Office Equip 49,500 Misc Selling Expense 2,000
Store Equipment 311,500 Office Salaries Expense 73,800
Accumulated Depreciation - Store Equip 87,500 Rent Expense 39,900
A/P 48,600 Insurance Expense 22,950
Salaries Payable 3,600 Depreciation Expense - Office Equip 16,200
Note Payable (final payment due 2025) 54,000 Office Supplies Expense 1,650
Gina Hennessy, Capital 454,800 Misc Admin Exp 1,900
Gina Hennessy, Drawing 45,000 Interest Expense 4,400
Sales 2,703,600

1. Prepare a multiple-step income statement.
2. Prepare a statement of owner's equity.
3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $8,000
4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report form and account form balance sheets differ.

Click here for the solution: The following selected accounts and their current balances appear in the ledger of Case-It Co. for the fiscal year ended November 30, 2010

At the beginning of 2012, the Jeater Company had the following balances in its accounts

Problem 3-25 Comprehensive Cycle Problem

At the beginning of 2012, the Jeater Company had the following balances in its accounts:

Cash $4,300
Inventory 9,000
Common Stock 10,000
Retained Earnings 3,300

During 2012, the economy experienced the following events:
1. Purchased inventory that cost $2,200 on account from Blue Company under terms 1/10, n/30. The merchandise was delivered FOB shipping point . Freight costs of $110 were paid in cash.
2. Returned $200 of the inventory that it had purchased because the inventory was damaged in transit. The freight company agreed to pay the return freight cost.

3. Paid the amount due on its accounts payable to blue company within the cash discount period.

4. Sold inventory that had cost $3,000 for $5,500 on account under terms 2/10 n/45

5. Received merchandise returned from a customer . The merchandise originally cost $400 and was sold to the customer for $710 cash during the previous accounting period. the coustomer was paid $710 cash for the returned merchandise.
6. Delivered goods FOB destination in event 4. Freight cost of $60 were paid in cash.
7. Collected the amount due on the account receivable within the discount period.
8. Took a physical count indicating that $7,970 of inventory was on hand at the end of the accounting period.

A. Identify these events as asset source (as) asset use (ua) asset exchange (ae) or claims exchange (ce)

B. Record each event in a statements model like the following one.

balance sheet income statement

[event] assets = liab. = equity rev.-exp.= net inc. [statement of cash flows]

cash +accts. rec + mdse.inv = accts pay. + ret earn.

c. Prepare an income statement, a statement of changes in stockholders equity, a balance sheet and a statement of cash flows.

Click here for the solution: At the beginning of 2012, the Jeater Company had the following balances in its accounts

Grider Company's chart of accounts includes the following selected accounts

Grider Company's chart of accounts includes the following selected accounts.

101 Cash 401 Sales
112 Accounts Receivable 414 Sales Discounts
120 Merchandise Inventory 505 Cost of Goods Sold
301 O. Grider, Capital

On April 1 the accounts receivable ledger of Grider Company showed the following balances: Ogden $1,550, Chelsea $1,200, Eggleston Co. $2,900, and Baez $1,800.The April transactions involving the receipt of cash were as follows.

Apr. 1 The owner, O. Grider, invested additional cash in the business $7,200.
4 Received check for payment of account from Baez less 2% cash discount.
5 Received check for $920 in payment of invoice no. 307 from Eggleston Co.
8 Made cash sales of merchandise totaling $7,245. The cost of the merchandise sold was $4,347.
10 Received check for $600 in payment of invoice no. 309 from Ogden.
11 Received cash refund from a supplier for damaged merchandise $740.
23 Received check for $1,500 in payment of invoice no. 310 from Eggleston Co.
29 Received check for payment of account from Chelsea.

Instructions
(a) Journalize the transactions above in a six-column cash receipts journal with columns for Cash Dr., Sales Discounts Dr., Accounts Receivable Cr., Sales Cr., Other Accounts Cr., and Cost of Goods Sold Dr./Merchandise Inventory Cr. Foot and crossfoot the journal.
(b) Insert the beginning balances in the Accounts Receivable control and subsidiary accounts, and post the June transactions to these accounts.
(c) Prove the agreement of the control account and subsidiary account balances.


Click here for the solution: Grider Company's chart of accounts includes the following selected accounts

An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Gagliano Corp

ACC 560 Week 9 Assignment

E13-2 An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Gagliano Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary.

(a) Payment of interest on notes payable.
(b) Exchange of land for patent.
(c) Sale of building at book value.
(d) Payment of dividends.
(e) Depreciation.
(f) Receipt of dividends on investment in stock.
(g) Receipt of interest on notes receivable.
(h) Issuance of capital stock.
(i) Amortization of patent.
(j) Issuance of bonds for land.
(k) Purchase of land.
(l) Conversion of bonds into common stock.
(m) Loss on sale of land.
(n) Retirement of bonds.

Instructions
Indicate how each item should be classified in the statement of cash flows using these four major classifications: operating activity (indirect method), investing activity, financing activity, and significant noncash investing and financing activity.


Click here for the solution: An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Gagliano Corp

The three accounts shown below appear in the general ledger of Cesar Corp. during 2008

ACC 560 Week 9 Assignment

E13-6 The three accounts shown below appear in the general ledger of Cesar Corp. during 2008.

Equipment
Date Debit Credit Balance
Jan. 1 Balance 160,000
July 31 Purchase of equipment 70,000 230,000
Sept. 2 Cost of equipment constructed 53,000 283,000
Nov. 10 Cost of equipment sold 49,000 234,000

Accumulated Depreciation-Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on equipment sold 30,000 41,000
Dec. 31 Depreciation for year 28,000 69,000

Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 14,000 91,000
Dec. 31 Net income 67,000 158,000

Instructions
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on sale of equipment was $5,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)


Click here for the solution: The three accounts shown below appear in the general ledger of Cesar Corp. during 2008

The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts

P11-6B The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts.

Preferred Stock (15,000 shares issued) $750,000
Common Stock (250,000 shares issued) 2,500,000
Paid-in Capital in Excess of Par Value-Preferred 250,000
Paid-in Capital in Excess of Par Value-Common 400,000
Common Stock Dividends Distributable 250,000
Retained Earnings 902,000

A review of the accounting records reveals the following.
1. No errors have been made in recording 2011 transactions or in preparing the closing entry for net income.
2. Preferred stock is $50 par, 8%, and cumulative; 15,000 shares have been outstanding since January 1, 2010.
3. Authorized stock is 20,000 shares of preferred, 500,000 shares of common with a $10 par value.
4. The January 1 balance in Retained Earnings was $1,170,000.
5. On July 1, 20,000 shares of common stock were sold for cash at $16 per share.
6. On September 1, the company discovered an understatement error of $90,000 in computing depreciation in 2010. The net of tax effect of $63,000 was properly debited directly to Retained Earnings.
7. A cash dividend of $250,000 was declared and properly allocated to preferred and common stock on October 1. No dividends were paid to preferred stockholders in 2010.
8. On December 31, a 10% common stock dividend was declared out of retained earnings on common stock when the market price per share was $18.
9. Net income for the year was $495,000.
10. On December 31, 2011, the directors authorized disclosure of a $200,000 restriction of retained earnings for plant expansion. (Use Note X.)

Instructions
a. Reproduce the Retained Earnings account for the year.
b. Prepare a retained earnings statement for the year.
(b) Retained earnings $902,000
c. Prepare a stockholders’ equity section at December 31.
(c) Total stockholders’ equity $5,052,000
d. Compute the earnings per share of common stock using 240,000 as the weighted-average shares outstanding for the year.
e. Compute the allocation of the cash dividend to preferred and common stock.


Click here for the solution: The post-closing trial balance of Chen Corporation at December 31, 2011, contains the following stockholders’ equity accounts

The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2008

P 3-2 The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2008. It is presented in scrambled order.

Common stock, no par value, 10,000 shares
authorized, 5,724 shares issued $ 3,180
Retained earnings 129,950
Deferred income tax liability (long term) 24,000
Long-term debt 99,870
Accounts payable 35,000
Buildings 75,000
Machinery and equipment 300,000
Land 11,000
Accumulated depreciation 200,000
Cash 3,000
Receivables, less allowance of $3,000 58,000
Accrued income taxes 3,000
Inventory 54,000
Other accrued expenses 8,000
Current portion of long-term debt 7,000
Prepaid expenses 2,000
Other assets (long term) 7,000

Required
Prepare a classified balance sheet in report form. For assets, use the classifications of current assets, plant and equipment, and other assets. For liabilities, use the classifications of current liabilities and long-term liabilities.


Click here for the solution: The following information was obtained from the accounts of Lukes, Inc., as of December 31, 2008

The accounts of Consolidated Can contain the following amounts at December 31, 2008

P 4-3 The accounts of Consolidated Can contain the following amounts at December 31, 2008:

Cost of products sold $410,000
Dividends 3,000
Extraordinary gain (net of tax) 1,000
Income taxes 9,300
Interest expense 8,700
Other income 1,600
Retained earnings, 1/1 270,000
Sales 480,000
Selling and administrative expense 42,000

Required
Prepare a multiple-step income statement combined with a reconciliation of retained earnings for the year ended December 31, 2008.


Click here for the solution: The accounts of Consolidated Can contain the following amounts at December 31, 2008

These three accounts appear in the general ledger of Tovar Corp. during 2010

These three accounts appear in the general ledger of Tovar Corp. during 2010:

Equipment
Date Debit Credit Balance
Jan. 1 Balance 160,000
July 31 Purchase of equipment 70,000 230,000
Sept.2 Cost of equipment constructed 53,000 283,000
Nov.10 Cost of equipment sold 49,000 234,000

Accumulated Depreciation — Equipment
Date Debit Credit Balance
Jan. 1 Balance 71,000
Nov. 10 Accumulated depreciation on
equipment sold 30,000 41,000
Dec. 31 Depreciation for year 28,000 69,000

Retained Earnings
Date Debit Credit Balance
Jan. 1 Balance 105,000
Aug. 23 Dividends (cash) 19,000 86,000
Dec. 31 Net income 72,000 158,000

From the postings in the accounts, indicated how the information is reported on the statement of cash flows, using the indirect method below. The loss on sale of equipment was $8,000. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,000.)


Click here for the solution: These three accounts appear in the general ledger of Tovar Corp. during 2010

Hachey Company has accounts receivable of $95,100 at March 31, 2007

Hachey Company has accounts receivable of $95,100 at March 31, 2007. An analysis of the accounts shows these amounts.

Balance, March 31
Month of Sale 2007 2006
March $65,000 $75,000
February 12,600 8,000
December and January 10,100 2,400
November and October 7,400 1,100
$95,100 $86,500

Credit terms are 2/10, n/30. At March 31, 2007, there is a $2,200 credit balance in Allowance for Doubtful Accounts prior to adjustment. The company uses the percentage of receivables basis for estimating uncollectible accounts. The company’s estimates of bad debts are as shown below.

Estimated Percentage
Age of Accounts Uncollectible
Current 2%
1–30 days past due 7
31–90 days past due 30
Over 90 days 50

Instructions
(a) Determine the total estimated uncollectibles.
(b) Prepare the adjusting entry at March 31, 2007, to record bad debts expense.
(c) Discuss the implications of the changes in the aging schedule from 2006 to 2007.


Click here for the solution: Hachey Company has accounts receivable of $95,100 at March 31, 2007

Toyco, a retail toy chain, honors two bank credit cards and makes daily deposits of credit card sales in two credit card bank accounts

12-42 Toyco, a retail toy chain, honors two bank credit cards and makes daily deposits of credit card sales in two credit card bank accounts. (Bank A and Bank B). Each day, Toyco batches its credit card sales slips, bank deposit slips and authorized sales return documents and sends them to data processing for data entry. Each week detailed computer printouts of the general ledger credit card cash accounts are prepared. Credit card banks have been instructed to make an automatic weekly transfer of cash to Toyco's general bank account. The credit card banks charge back deposits that include sales to holders of stolen or expired cards.

The auditor examining Toyco financial statements has obtained copies of the detailed general ledger cash account printouts, a summary of the bank statements and the manually prepared bank reconciliations, all for the week of December 31, as shown here. (see attachment)

Required:
Review the December 31 bank reconciliation and the related information contained in the following schedules and describe what actions the auditor should take to obtain satisfaction for each item on the bank reconciliation. Assume that all amounts are material and that all computations are accurate. Organize your answer sheet as follows, using the code contained on the bank reconciliation:

Code Number Actions to Be Taken by the Auditor to Gain Satisfaction


Click here for the solution: Toyco, a retail toy chain, honors two bank credit cards and makes daily deposits of credit card sales in two credit card bank accounts

The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments

The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments have been recorded on December 31, 2010:

Debit Credit
Balances Balances
Cash 24,200
Accounts Receivable 41,300
Supplies 6,700
Land 120,000
Building 160,000
Accumulated Amortization—Building 52,300
Office Equipment 53,000
Accumulated Amortization—Office Equipment 21,300
Accounts Payable 3,400
Salaries Payable 5,200
Amid Moshref, Capital 125,000
Amid Moshref, Withdrawals 50,000
Alex Weekley, Capital 160,000
Alex Weekley, Withdrawals 60,000
Professional Fees 562,200
Salaries Expense 312,300
Amortization Expense 81,700
Property Tax Expense 3,500
Heating and Lighting Expense 11,200
Supplies Expense 3,400
Miscellaneous Expense 2,100
929,400 929,400

The balance in Weekley’s capital account includes an additional investment of $20,000 made on April 5, 2010.

Instructions
1. Prepare an income statement for the current fiscal year, indicating the division of net income as shown on page 568. The articles of partnership provide for salary allowances of $60,000 to Moshref and $75,000 to Weekley, allowances of 12% on each partner’s capital balance at the beginning of the fiscal year, and equal division of the remaining net income or net loss.
2. Prepare a statement of partners’ equity for 2010.
3. Prepare a balance sheet as of the end of 2010.

Check: 2. Dec. 31 capital—Weekley, $182,400


Click here for the solution: The ledger of Amid Moshref and Alex Weekley, lawyers, contains the following accounts and balances after adjustments