P5-9A At the beginning of the current season on April 1, the ledger of Wichita Pro Shop showed Cash $2,500; Merchandise Inventory $3,500; and Common Stock $6,000. These transactions occurred during April, 2010.
Apr. 5 Purchased golf bags, clubs and balls on account from Roland Co. $1,500, terms 3/10, n/60.
7 Paid freight on Roland Co. purchases $80.
9 Received credit from Roland Co. for merchandise returned $200.
10 Sold merchandise on account to members $910, terms n/30.
12 Purchased golf shoes, sweaters, and other accessories on account from Eagle Sportswear $830, terms 1/10, n/30.
14 Paid Roland Co. in full.
17 Received credit from Eagle Sportswear for merchandise returned $30.
20 Made sales on account to members $810, terms n/30.
21 Paid Eagle Sportswear in full.
27 Granted credit to members for clothing that did not fit $60.
30 Received payments on account from members $1,100.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T-accounts, enter the beginning balances in the ledger accounts and post the April transactions
(c) Prepare a trial balance on April 30, 2010.
(d) Prepare an income statement through gross profit.
Click here for the solution: At the beginning of the current season on April 1, the ledger of Wichita Pro Shop showed Cash $2,500
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Tuesday, September 8, 2015
Wednesday, September 2, 2015
The balance sheets for Rainey Company showed the following information
The balance sheets for Rainey Company showed the following information. Additional information concerning transactions and events during 2010 are presented below.
Rainey Company
Balance Sheet
December 31
2010 2009
Cash $ 30,900 $ 10,200
Accounts receivable (net) 43,300 20,300
Inventory 35,000 42,000
Long-term investments 0 15,000
Property, plant & equipment 236,500 150,000
Accumulated depreciation (37,700) (25,000)
$308,000 $212,500
Accounts payable $ 17,000 $ 26,500
Accrued liabilities 21,000 17,000
Long-term notes payable 70,000 50,000
Common stock 130,000 90,000
Retained earnings 70,000 29,000
$308,000 $212,500
Additional data:
1 Net income for the year 2010, $76,000.
2 Depreciation on plant assets for the year, $12,700.
3 Sold the long-term investments for $28,000 (assume gain or loss is ordinary).
4 Paid dividends of $35,000.
5 Purchased machinery costing $26,500, paid cash.
6 Purchased machinery and gave a $60,000 long-term note payable.
7 Paid a $40,000 long-term note payable by issuing common stock.
Instructions
Prepare a statement of cash flows (using the indirect method) for 2010 for Rainey Company.
Click here for the solution: The balance sheets for Rainey Company showed the following information
Rainey Company
Balance Sheet
December 31
2010 2009
Cash $ 30,900 $ 10,200
Accounts receivable (net) 43,300 20,300
Inventory 35,000 42,000
Long-term investments 0 15,000
Property, plant & equipment 236,500 150,000
Accumulated depreciation (37,700) (25,000)
$308,000 $212,500
Accounts payable $ 17,000 $ 26,500
Accrued liabilities 21,000 17,000
Long-term notes payable 70,000 50,000
Common stock 130,000 90,000
Retained earnings 70,000 29,000
$308,000 $212,500
Additional data:
1 Net income for the year 2010, $76,000.
2 Depreciation on plant assets for the year, $12,700.
3 Sold the long-term investments for $28,000 (assume gain or loss is ordinary).
4 Paid dividends of $35,000.
5 Purchased machinery costing $26,500, paid cash.
6 Purchased machinery and gave a $60,000 long-term note payable.
7 Paid a $40,000 long-term note payable by issuing common stock.
Instructions
Prepare a statement of cash flows (using the indirect method) for 2010 for Rainey Company.
Click here for the solution: The balance sheets for Rainey Company showed the following information
Monday, August 31, 2015
On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
MULTIPLE CHOICE / TRUE OR FALSE
1. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:
Stockholders' equity
Common stock, $1 par 100,000 shares authorized $40,000
40,000 shares issued
Paid-in capital in excess of par 260,000
Retained earnings 940,000
Total stockholder's equity $1,240,000
On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points : 1)
2. Stock sold for amounts in excess of par value results in a gain reported on the income statement. (Points : 1)
3. The account to be debited when a stock dividend is declared and distributed on the same date would be: (Points : 1)
4. A corporation must record a gain on sale for the sale of treasury stock at an amount greater than its purchase price. (Points : 1)
5. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1)
6. Please refer to the following information for Petra Sales Company:
Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of par: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, the total equity of the company will go down by $70,000. (Points : 1)
7. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points : 1)
8. Which of the following describes the term outstanding stock? (Points : 1)
9. A corporation is a separate legal entity formed under the laws of a particular state. (Points : 1)
10. All forms and classes of stock carry voting rights. (Points : 1)
Click here for the solution: On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
1. On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet:
Stockholders' equity
Common stock, $1 par 100,000 shares authorized $40,000
40,000 shares issued
Paid-in capital in excess of par 260,000
Retained earnings 940,000
Total stockholder's equity $1,240,000
On July 1, 2013, Stephans distributed a 5% stock dividend. The market value of the stock at that time was $13 per share. Following this transaction, what would be the new number of shares issued shown on the balance sheet? (Points : 1)
2. Stock sold for amounts in excess of par value results in a gain reported on the income statement. (Points : 1)
3. The account to be debited when a stock dividend is declared and distributed on the same date would be: (Points : 1)
4. A corporation must record a gain on sale for the sale of treasury stock at an amount greater than its purchase price. (Points : 1)
5. If preferred stock is non-cumulative, then the company does NOT need to pay dividends that were passed in previous years. (Points : 1)
6. Please refer to the following information for Petra Sales Company:
Common stock, $1.00 par, 200,000 issued, 180,000 outstanding
Paid-in capital in excess of par: $1,600,000
Retained earnings: $2,440,000
Treasury stock: 20,000 shares purchased at $12 per share
If Petra Sales purchases an additional 5,000 shares of treasury stock at $14 per share, the total equity of the company will go down by $70,000. (Points : 1)
7. Occidental Produce Company has 40,000 shares of common stock outstanding and 2,000 shares of preferred stock outstanding. The common stock is $0.01 par value; the preferred stock is 4% non-cumulative, with $100 par value. On October 15, 2014, the company declares a total dividend payment of $40,000. What is the total amount of dividends that will be paid to the common shareholders? (Points : 1)
8. Which of the following describes the term outstanding stock? (Points : 1)
9. A corporation is a separate legal entity formed under the laws of a particular state. (Points : 1)
10. All forms and classes of stock carry voting rights. (Points : 1)
Click here for the solution: On June 30, 2013, Stephans Company showed the following data on the equity section of their balance sheet
Sunday, July 12, 2015
At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200
P5-7A At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200. The following transactions were completed during April.
Apr. 4 Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30.
6 Paid freight on Denton Co. purchase $60.
8 Sold merchandise to members $900, terms n/30.
10 Received credit of $40 from Denton Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Newbee Sports for cash $300.
13 Paid Denton Co. in full.
14 Purchased tennis shirts and shorts from Venus's Sportswear $600, terms 2/10, n/60.
15 Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned.
17 Paid freight on Venus's Sportswear purchase $30.
18 Sold merchandise to members $1,000, terms n/30.
20 Received $500 in cash from members in settlement of their accounts.
21 Paid Venus's Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $500.
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts; and Freight-in.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April Transactions.
(c) Prepare a trial balance on April 30, 2008.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.
Click here for the solution: At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200
Apr. 4 Purchased racquets and balls from Denton Co. $740, terms 3/10, n/30.
6 Paid freight on Denton Co. purchase $60.
8 Sold merchandise to members $900, terms n/30.
10 Received credit of $40 from Denton Co. for a damaged racquet that was returned.
11 Purchased tennis shoes from Newbee Sports for cash $300.
13 Paid Denton Co. in full.
14 Purchased tennis shirts and shorts from Venus's Sportswear $600, terms 2/10, n/60.
15 Received cash refund of $50 from Newbee Sports for damaged merchandise that was returned.
17 Paid freight on Venus's Sportswear purchase $30.
18 Sold merchandise to members $1,000, terms n/30.
20 Received $500 in cash from members in settlement of their accounts.
21 Paid Venus's Sportswear in full.
27 Granted an allowance of $30 to members for tennis clothing that did not fit properly.
30 Received cash payments on account from members $500.
The chart of accounts for the tennis shop includes Cash; Accounts Receivable; Merchandise Inventory; Accounts Payable; Common Stock; Sales; Sales Returns and Allowances; Purchases; Purchase Returns and Allowances; Purchase Discounts; and Freight-in.
Instructions
(a) Journalize the April transactions using a periodic inventory system.
(b) Using T accounts, enter the beginning balances in the ledger accounts and post the April Transactions.
(c) Prepare a trial balance on April 30, 2008.
(d) Prepare an income statement through gross profit, assuming merchandise inventory on hand at April 30 is $2,296.
Click here for the solution: At the beginning of the current season, the ledger of Village Tennis Shop showed Cash $2,500; Merchandise Inventory $1,700; and Common Stock $4,200
Saturday, July 11, 2015
On August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000
On August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000, Accounts Payable $3,600, Common Stock $13,000, and Retained Earnings $700. During September, the following transactions occurred.
1. Paid $2,900 cash for accounts payable due.
2. Collected $1,300 of accounts receivable.
3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
4. Earned revenue of $7,300, of which $2,500 is paid in cash and the balance is due in October.
5. Declared and paid a $400 cash dividend
6. Paid salaries $1,700, rent for September $900, and advertising expense $200.
7. Incurred utilities expense for month on account $170.
8. Received $10,000 from Capital Bank on a 6-month note payable.
(a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)
(b) Prepare an income statement for September, a retained earnings statement for September, and a balance sheet at September 30.
Click here for the solution: On August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000
1. Paid $2,900 cash for accounts payable due.
2. Collected $1,300 of accounts receivable.
3. Purchased additional office equipment for $2,100, paying $800 in cash and the balance on account.
4. Earned revenue of $7,300, of which $2,500 is paid in cash and the balance is due in October.
5. Declared and paid a $400 cash dividend
6. Paid salaries $1,700, rent for September $900, and advertising expense $200.
7. Incurred utilities expense for month on account $170.
8. Received $10,000 from Capital Bank on a 6-month note payable.
(a) Prepare a tabular analysis of the September transactions beginning with August 31 balances. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)
(b) Prepare an income statement for September, a retained earnings statement for September, and a balance sheet at September 30.
Click here for the solution: On August 31, the balance sheet of Donahue Veterinary Clinic showed Cash $9,000, Accounts Receivable $1,700, Supplies $600, Equipment $6,000
Wednesday, July 8, 2015
At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control
(Under applied or over applied overhead) At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control. In addition, the company had the following account balances:
Work in Process Inventory $384,000
Finished Goods Inventory $96,000
Cost of Goods Sold $720,000
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe in more appropriate for the company, and why?
Click here for the solution: At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control
Work in Process Inventory $384,000
Finished Goods Inventory $96,000
Cost of Goods Sold $720,000
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe in more appropriate for the company, and why?
Click here for the solution: At the end of 2013, Jackson Tank Company’s account showed a $66,000 credit balance in manufacturing overhead control
Saturday, June 20, 2015
At the end of 2010, Jackson Tank Company's accounts showed a $66,000 credit balance in Manufacturing Overhead Control
At the end of 2010, Jackson Tank Company's accounts showed a $66,000
credit balance in Manufacturing Overhead Control. In addition, the
company had the following account balances: Work in Process Inventory $384,000 Finished Goods Inventory 96,000 Cost of Goods Sold 720,000
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe is more appropriate for the company and Why???
Click here for the solution: At the end of 2010, Jackson Tank Company's accounts showed a $66,000 credit balance in Manufacturing Overhead Control
a. Prepare the necessary journal entry to close the overhead account if the balance is considered immaterial.
b. Prepare the necessary journal entry to close the overhead account if the balance is considered material.
c. Which method do you believe is more appropriate for the company and Why???
Click here for the solution: At the end of 2010, Jackson Tank Company's accounts showed a $66,000 credit balance in Manufacturing Overhead Control
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