E15-1 (Recording the Issuances of Common Stock) During its first year of operations, Collin Raye Corporation had the following transactions pertaining to its common stock.
Jan 10 Issued 80,000 shares for case at $6 per share
Mar 1 Issued 5,000 shares to attorneys in payment of a bill for $35,000 for services rendered in helping the company to incorporate.
July 1 Issued 30,000 shares for cash at $8 per share
Instructions
a.) Prepare the journal entries for these transactions, assuming that the common stock has a par value of $5 per share.
b.) Prepare the journal entries for these transactions assuming that the common stock is no par with a stated value of $3 per share.
Click here for the solution: During its first year of operations, Collin Raye Corporation had the following transactions pertaining to its common stock
Showing posts with label transactions. Show all posts
Showing posts with label transactions. Show all posts
Wednesday, November 11, 2015
Tuesday, November 10, 2015
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
P 18-5 Shareholders' equity transactions; statement of shareholders' equity
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013. At December 31, 2010, the corporation's accounts included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000
a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares.
d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share.
f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively.
Click here for the solution: Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013. At December 31, 2010, the corporation's accounts included:
($ in 000s)
Common stock, 105 million shares at $1 par $105,000
Paid-in capital-excess of par 630,000
Retained earnings 970,000
a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5.
c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares.
d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share.
f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1.
Required:
1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions.
2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively.
Click here for the solution: Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011–2013
Monday, October 26, 2015
Elder Corporation incurred the following transactions
E2-7 Elder Corporation incurred the following transactions.
1. Purchased raw materials on account $46,300.
2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.
3. Factory labor costs incurred were $53,900, of which $49,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable.
4. Time tickets indicated that $48,000 was direct labor and $5,900 was indirect labor.
5. Overhead costs incurred on account were $80,500.
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $88,000 were completed and transferred to finished goods.
8. Finished goods costing $75,000 to manufacture were sold on account for $103,000.
Journalize the transactions.
Click here for the solution: Elder Corporation incurred the following transactions
1. Purchased raw materials on account $46,300.
2. Raw Materials of $36,000 were requisitioned to the factory. An analysis of the materials requisition slips indicated that $6,800 was classified as indirect materials.
3. Factory labor costs incurred were $53,900, of which $49,000 pertained to factory wages payable and $4,900 pertained to employer payroll taxes payable.
4. Time tickets indicated that $48,000 was direct labor and $5,900 was indirect labor.
5. Overhead costs incurred on account were $80,500.
6. Manufacturing overhead was applied at the rate of 150% of direct labor cost.
7. Goods costing $88,000 were completed and transferred to finished goods.
8. Finished goods costing $75,000 to manufacture were sold on account for $103,000.
Journalize the transactions.
Click here for the solution: Elder Corporation incurred the following transactions
An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below
ACC 557 Week 1 Assignment
E1-8 An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholders’ equity is explained.
Cash Accounts Office Accounts Stockholders’ _ Receivable _ Supplies _ Equipment _ Payable _ Equity
1. _$15,000 _$15,000 Investment
2. _2,000 _$5,000 _$3,000
3. _750 _$750
4. _4,600 _$3,700 _8,300 Service Revenue
5. _1,500 _1,500
6. _2,000 _2,000 Dividends
7. _650 −650 Rent Expense
8. _450 _450
9. _4,900 _4,900 Salaries Expense
10. _500 −500 Utilities Expense
Instructions
(a) Describe each transaction that occurred for the month.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the amount of net income for the month.
Click here for the solution: An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below
E1-8 An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. Each increase and decrease in stockholders’ equity is explained.
Cash Accounts Office Accounts Stockholders’ _ Receivable _ Supplies _ Equipment _ Payable _ Equity
1. _$15,000 _$15,000 Investment
2. _2,000 _$5,000 _$3,000
3. _750 _$750
4. _4,600 _$3,700 _8,300 Service Revenue
5. _1,500 _1,500
6. _2,000 _2,000 Dividends
7. _650 −650 Rent Expense
8. _450 _450
9. _4,900 _4,900 Salaries Expense
10. _500 −500 Utilities Expense
Instructions
(a) Describe each transaction that occurred for the month.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the amount of net income for the month.
Click here for the solution: An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below
Wednesday, October 14, 2015
Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows
E2-2 Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows.
Jan. 2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend.
Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.
Post journal entries to standard form of account.
Use the following format, in which the January 2 transaction is given as an example.
Account Debited Account Credited
(a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Normal Basic Specific Normal
Date Type Account Effect Balance Type Account Effect Balance
Jan. 2 Asset Cash Increase Debit Stockholders' Stock Common Increase Credit
Click here for the solution: Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows
Jan. 2 Invested $10,000 cash in the business in exchange for common stock.
3 Purchased used car for $4,000 cash for use in business.
9 Purchased supplies on account for $500.
11 Billed customers $1,800 for services performed.
16 Paid $200 cash for advertising.
20 Received $700 cash from customers billed on January 11.
23 Paid creditor $300 cash on balance owed.
28 Declared and paid a $1,000 cash dividend.
Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, stockholders’ equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.
Post journal entries to standard form of account.
Use the following format, in which the January 2 transaction is given as an example.
Account Debited Account Credited
(a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Normal Basic Specific Normal
Date Type Account Effect Balance Type Account Effect Balance
Jan. 2 Asset Cash Increase Debit Stockholders' Stock Common Increase Credit
Click here for the solution: Selected transactions for D. Reyes, Inc., an interior decorating firm, in its first month of business, are as follows
A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
E3-4 A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease in stockholders’ equity is explained.
Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.
Click here for the solution: A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
Instructions
(a) Describe each transaction.
(b) Determine how much stockholders’ equity increased for the month.
(c) Compute the net income for the month.
Click here for the solution: A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below
Friday, October 9, 2015
The May transactions of StepAside Corporation were as follows
E3-9 The May transactions of StepAside Corporation were as follows.
May 4 Paid $700 due for supplies previously purchased on account.
7 Performed advisory services on account for $6,800.
8 Purchased supplies for $850 on account.
9 Purchased equipment for $1,000 in cash.
17 Paid employees $530 in cash.
22 Received bill for equipment repairs of $900.
29 Paid $1,200 for 12 months of insurance policy. Coverage begins June 1.
Instructions
Journalize the transactions. Do not provide explanations.
Click here for the solution: The May transactions of StepAside Corporation were as follows
May 4 Paid $700 due for supplies previously purchased on account.
7 Performed advisory services on account for $6,800.
8 Purchased supplies for $850 on account.
9 Purchased equipment for $1,000 in cash.
17 Paid employees $530 in cash.
22 Received bill for equipment repairs of $900.
29 Paid $1,200 for 12 months of insurance policy. Coverage begins June 1.
Instructions
Journalize the transactions. Do not provide explanations.
Click here for the solution: The May transactions of StepAside Corporation were as follows
Transactions that affect earnings do not necessarily affect cash
BE4-1 Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example.
Cash NetIncome
(a) Purchased $100 of supplies for cash. -$100 $0
(b) Recorded an adjusting entry to record use of $20 of the above supplies.
(c) Made sales of $1,300, all on account.
(d) Received $800 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,500.
(f) Recorded depreciation of building for period used, $600.
Click here for the solution: Transactions that affect earnings do not necessarily affect cash
Cash NetIncome
(a) Purchased $100 of supplies for cash. -$100 $0
(b) Recorded an adjusting entry to record use of $20 of the above supplies.
(c) Made sales of $1,300, all on account.
(d) Received $800 from customers in payment of their accounts.
(e) Purchased equipment for cash, $2,500.
(f) Recorded depreciation of building for period used, $600.
Click here for the solution: Transactions that affect earnings do not necessarily affect cash
Wednesday, October 7, 2015
The following transactions were completed by The Bronze gallery during the current fiscal year ended December 31
PR 9-1A The following transactions were completed by The Bronze gallery during the current fiscal year ended December 31:
June 6: Reinstated the account of Ian Netti, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1945 cash in full payment of Ian's account.
July 19: Wrote off the $11,150 balance owed by Rancho Rigging Co., which is bankrupt.
August 13: Received 35% of the $20,000 balance owed by Santori Co., a bankrupt business, and wrote off the remainder as uncollectible.
Sept 2: Reinstated the account for Sheryl Capers, which had been written off 2 years earlier as uncollectible. Recorded the receipt of $3,170 cash in full payment.
Dec 31: Wrote off the following accounts as uncollectible (compound entry): Jacoba Co., $8390; Garcia Co., $2500; Summit Furniture, $6400; Jill DePuy, $1800.
Dec 31: Based on an analysis of the $960,750 of accounts receivable, it was estimated that $4200 will be uncollectible. Journalized the adjusting entry.
Instructions
1. Record the January 1 credit balance of $40000 in a T account for allowances for doubtful accounts.
2. Journalize the transactions. Post each entry that affects the following T accounts and determine new balances:
(allowance for doubtful accounts and bad debt expense) --
3. Determine the expected net realizable value of the accounts receivable as of Dec 31. --
4. Assuming that instead of basing the provision for uncollectible accounts on an estimated expense of 3/4 of 1% of the net sales of $6,000,000 for the year, determine the following: (a) bad debt expense for the year (b) balance in the allowance account after the adjustment of Dec 31 (c) expected net realizable value of the accounts receivable as of December 31
Click here for the solution: The following transactions were completed by The Bronze gallery during the current fiscal year ended December 31
June 6: Reinstated the account of Ian Netti, which had been written off in the preceding year as uncollectible. Journalized the receipt of $1945 cash in full payment of Ian's account.
July 19: Wrote off the $11,150 balance owed by Rancho Rigging Co., which is bankrupt.
August 13: Received 35% of the $20,000 balance owed by Santori Co., a bankrupt business, and wrote off the remainder as uncollectible.
Sept 2: Reinstated the account for Sheryl Capers, which had been written off 2 years earlier as uncollectible. Recorded the receipt of $3,170 cash in full payment.
Dec 31: Wrote off the following accounts as uncollectible (compound entry): Jacoba Co., $8390; Garcia Co., $2500; Summit Furniture, $6400; Jill DePuy, $1800.
Dec 31: Based on an analysis of the $960,750 of accounts receivable, it was estimated that $4200 will be uncollectible. Journalized the adjusting entry.
Instructions
1. Record the January 1 credit balance of $40000 in a T account for allowances for doubtful accounts.
2. Journalize the transactions. Post each entry that affects the following T accounts and determine new balances:
(allowance for doubtful accounts and bad debt expense) --
3. Determine the expected net realizable value of the accounts receivable as of Dec 31. --
4. Assuming that instead of basing the provision for uncollectible accounts on an estimated expense of 3/4 of 1% of the net sales of $6,000,000 for the year, determine the following: (a) bad debt expense for the year (b) balance in the allowance account after the adjustment of Dec 31 (c) expected net realizable value of the accounts receivable as of December 31
Click here for the solution: The following transactions were completed by The Bronze gallery during the current fiscal year ended December 31
Sunday, September 27, 2015
Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)
Chapter 11 Comprehensive Problem 3 Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow:
Jan. 2. Issued a check to establish a petty cash fund of $2,000.
Mar. 4. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $789; miscellaneous selling expense, $256; miscellaneous administrative expense, $378.
AND SO ON
Click here for the solution: Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)
Jan. 2. Issued a check to establish a petty cash fund of $2,000.
Mar. 4. Replenished the petty cash fund, based on the following summary of petty cash receipts: office supplies, $789; miscellaneous selling expense, $256; miscellaneous administrative expense, $378.
AND SO ON
Click here for the solution: Selected transactions completed by Blackwell Company during its first fiscal year ending December 31 were as follow (Chapter 11 Comprehensive Problem 3)
(Minicase 4 Thomson Corporation) During the current year, Thomson had the following stock transactions
Minicase 4 Thomson Corporation
Thomson Corporation
Stockholder’s Equity
December 31, 2007
Common stock (40,000 authorized, 25,000 issued and outstanding with par value of $10 per share.) $ 250,000.00
Excess paid in capital on common stock $ 125,000.00
Retained Earnings $ 500,000.00
Total stockholder's equity $ 875,000.00
During the current year, Thomson had the following stock transactions:
• The company authorized the sale of 10% preferred stock, 50,000 shares at par value of $50.
• Sold 20,000 shares of preferred stock at $75 per share.
• Purchased 5,000 shares of common stock at $20 per share for cash.
• Declared and distributed a 2% stock dividend to common stockholders when market price was $25 per share.
• Declared and paid $90,000 in cash dividends to common and preferred stockholders.
• Sold 2,000 shares of treasury stock at $16 per share.
• Net loss is $134,000.
Required:
1. Prepare the stockholder’s equity section of the balance sheet for year end 2008.
Click here for the solution: (Minicase 4 Thomson Corporation) During the current year, Thomson had the following stock transactions
Thomson Corporation
Stockholder’s Equity
December 31, 2007
Common stock (40,000 authorized, 25,000 issued and outstanding with par value of $10 per share.) $ 250,000.00
Excess paid in capital on common stock $ 125,000.00
Retained Earnings $ 500,000.00
Total stockholder's equity $ 875,000.00
During the current year, Thomson had the following stock transactions:
• The company authorized the sale of 10% preferred stock, 50,000 shares at par value of $50.
• Sold 20,000 shares of preferred stock at $75 per share.
• Purchased 5,000 shares of common stock at $20 per share for cash.
• Declared and distributed a 2% stock dividend to common stockholders when market price was $25 per share.
• Declared and paid $90,000 in cash dividends to common and preferred stockholders.
• Sold 2,000 shares of treasury stock at $16 per share.
• Net loss is $134,000.
Required:
1. Prepare the stockholder’s equity section of the balance sheet for year end 2008.
Click here for the solution: (Minicase 4 Thomson Corporation) During the current year, Thomson had the following stock transactions
(Sandusky Company) The following were selected from among the transactions completed by Sandusky Company during December of the current year
PR 6-5A The following were selected from among the transactions completed by Sandusky Company during December of the current year:
Dec 3: Purchased merchandise n account from Hillsboro Co., list price $38,000, trade discount 24%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $900 added to the invoice.
Dec 5: Purchased merchandise on account from Deepwater Co., $18,750, terms FOB destination, 2/10,n/30.
Dec 7: Returned $3,000 of merchandise purchase on December 5 from Deepwater Co.
13. Paid Hillsboro Co. on account for purchase of Dec 3, less discount.
15. Paid Deepwater Co. on account for purchase of Dec 5, less return of December 7 and discount.
16. Received cash on account from sale of December 6 to Zion Co., less discount.
19. Sold merchandise on MasterCard, $58,000. The cost of the merchandise sold was $34,500.
22. Sold merchandise on account to Smith River Co., $15,400, terms 2/10,n/30. The cost of merchandise sold was $9,000.
23. Sold merchandise for cash, $33,600. The cost of merchandise sold was $20,000.
28. Received merchanfise returned by Smith River Co. from sale on December 22, $2,400. The cost of returned merchandise was $1,400.
31. Paid MasterCard service fee of $1,750.
Instructions: Journalize the transactions.
Click here for the solution: The following were selected from among the transactions completed by Sandusky Company during December of the current year
Dec 3: Purchased merchandise n account from Hillsboro Co., list price $38,000, trade discount 24%, terms FOB shipping point, 2/10, n/30, with prepaid freight of $900 added to the invoice.
Dec 5: Purchased merchandise on account from Deepwater Co., $18,750, terms FOB destination, 2/10,n/30.
Dec 7: Returned $3,000 of merchandise purchase on December 5 from Deepwater Co.
13. Paid Hillsboro Co. on account for purchase of Dec 3, less discount.
15. Paid Deepwater Co. on account for purchase of Dec 5, less return of December 7 and discount.
16. Received cash on account from sale of December 6 to Zion Co., less discount.
19. Sold merchandise on MasterCard, $58,000. The cost of the merchandise sold was $34,500.
22. Sold merchandise on account to Smith River Co., $15,400, terms 2/10,n/30. The cost of merchandise sold was $9,000.
23. Sold merchandise for cash, $33,600. The cost of merchandise sold was $20,000.
28. Received merchanfise returned by Smith River Co. from sale on December 22, $2,400. The cost of returned merchandise was $1,400.
31. Paid MasterCard service fee of $1,750.
Instructions: Journalize the transactions.
Click here for the solution: The following were selected from among the transactions completed by Sandusky Company during December of the current year
Friday, September 25, 2015
The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year
PR 11-1A The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year.
Jan 15. Purchased merchandise on account from hood Co., $200,000, terms n/30.
Feb 14. Issued 60-day, %6 note for $200,000 to Hood Co on account.
April 15. Paid Hood Co. the amount owed on the note of February 14.
June2. Borrowed $187,500 from Acme Bank, issuing a 60-day, 8% note.
July 10. Purchased tools by issuing a $190,000, 90-day note to Columbia supply Co., which discounted the note at the rate of 6%.
Aug 1. Paid Acme Bank the interest rate due on the note of June 2 and renewed the loan by issuing a new 60-day, 10% not for $187,500 (Journalize both the debit and credit to the notes payable account.)
Sept 30. Paid Acme Bank the amount due on the note of August 1.
Oct 8. Paid Columbia Supply co. the amount due on the note of July 10.
Dec 1. Purchased office equipment from Mountain Equipment co. for $120,000 paying $20,000 and issuing a series of ten 6% notes for $10,000 each coming due at 30-day intervals.
Dec 5. Settled a product liability lawsuit with a customer for $76,000, payable in January. Emerald Bay accrued the loss in litigation claims payable account.
Dec 31. paid the amount due Mountain Equipment co. on the first note in the series issued on December 1.
Instructions:
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year.
(a) Product warranty cost $16,400;
(b) Interest on the nine remaining notes owed to Mountain Equipment Co
Click here for the solution: The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year
Jan 15. Purchased merchandise on account from hood Co., $200,000, terms n/30.
Feb 14. Issued 60-day, %6 note for $200,000 to Hood Co on account.
April 15. Paid Hood Co. the amount owed on the note of February 14.
June2. Borrowed $187,500 from Acme Bank, issuing a 60-day, 8% note.
July 10. Purchased tools by issuing a $190,000, 90-day note to Columbia supply Co., which discounted the note at the rate of 6%.
Aug 1. Paid Acme Bank the interest rate due on the note of June 2 and renewed the loan by issuing a new 60-day, 10% not for $187,500 (Journalize both the debit and credit to the notes payable account.)
Sept 30. Paid Acme Bank the amount due on the note of August 1.
Oct 8. Paid Columbia Supply co. the amount due on the note of July 10.
Dec 1. Purchased office equipment from Mountain Equipment co. for $120,000 paying $20,000 and issuing a series of ten 6% notes for $10,000 each coming due at 30-day intervals.
Dec 5. Settled a product liability lawsuit with a customer for $76,000, payable in January. Emerald Bay accrued the loss in litigation claims payable account.
Dec 31. paid the amount due Mountain Equipment co. on the first note in the series issued on December 1.
Instructions:
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year.
(a) Product warranty cost $16,400;
(b) Interest on the nine remaining notes owed to Mountain Equipment Co
Click here for the solution: The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year
Webster Consulting experienced the following transactions for 2012, its first year of operations and 2013
Problem 1-30 Prepare Financial Statements for Two Complete Accounting Cycles
Webster Consulting experienced the following transactions for 2012, its first year of operations and 2013. Assume that all transactions involve the receipt or payment of cash.
Transactions for 2012
1. Acquired $20,000 by issuing common stock.
2. Received $35,000 cash for providing services to customers.
3. Borrowed $25,000 cash from creditors
4. Paid expenses amounting to $22,000
5. Purchased land for $30,000 cash
Transactions for 2013
Beginning account balances for 2013 are:
Cash $28,000
Land $30,000
Notes payable 25,000
Common stock 20,000
Retained earnings 13,000
1. Acquired an additional $24,000 from the issue of common stock
2. Received $95,000 for providing services
3. Paid $15,000 to creditors to reduce loan
4. Paid expenses amounting to $71,500
5. Paid a $3,000 dividend to the stockholders
6. Determined that the market value of the land is $47,000.
Required
a. Write an accounting equation and record the effects of each accounting event under the appropriate headings for each year. Record the amounts of revenue expense and dividends in the retained earnings column. Provide appropriate titles for these accounts in the last column of the table.
b. Prepare an income statement, statement of changes in stockholders equity, year end balance sheet and statement of cash flows for each year.
c. Determine the amount of cash that is in the retained earnings account at the end of 2012 and 2013.
d. Examine the balance sheets for the two years. How did assets change from 2012 to 2013?
e. Determine the balance in the retained earnings account immediately after event 2 in 2012 and in 2013 are recorded.
Click here for the solution: Webster Consulting experienced the following transactions for 2012, its first year of operations and 2013
Webster Consulting experienced the following transactions for 2012, its first year of operations and 2013. Assume that all transactions involve the receipt or payment of cash.
Transactions for 2012
1. Acquired $20,000 by issuing common stock.
2. Received $35,000 cash for providing services to customers.
3. Borrowed $25,000 cash from creditors
4. Paid expenses amounting to $22,000
5. Purchased land for $30,000 cash
Transactions for 2013
Beginning account balances for 2013 are:
Cash $28,000
Land $30,000
Notes payable 25,000
Common stock 20,000
Retained earnings 13,000
1. Acquired an additional $24,000 from the issue of common stock
2. Received $95,000 for providing services
3. Paid $15,000 to creditors to reduce loan
4. Paid expenses amounting to $71,500
5. Paid a $3,000 dividend to the stockholders
6. Determined that the market value of the land is $47,000.
Required
a. Write an accounting equation and record the effects of each accounting event under the appropriate headings for each year. Record the amounts of revenue expense and dividends in the retained earnings column. Provide appropriate titles for these accounts in the last column of the table.
b. Prepare an income statement, statement of changes in stockholders equity, year end balance sheet and statement of cash flows for each year.
c. Determine the amount of cash that is in the retained earnings account at the end of 2012 and 2013.
d. Examine the balance sheets for the two years. How did assets change from 2012 to 2013?
e. Determine the balance in the retained earnings account immediately after event 2 in 2012 and in 2013 are recorded.
Click here for the solution: Webster Consulting experienced the following transactions for 2012, its first year of operations and 2013
Prepare entries to record the following transactions
1. Prepare entries to record the following transactions:
(a) a $5,000 cash investment made by the owner of a business.
(b) $1,700 in revenue earned on account.
(c) $2,500 of cash received in advance.
(d) $750 of advertising paid in advance.
(e) a $1,950 withdrawal
(f) the collection of $650 in cash on account.
(g) $275 of supplies purchased on account.
(h) $420 of utilities expense owed.
(i) a $215 cash payment made on account.
(j) $700 of revenue earned in cash.
2. Before any adjustments have been recorded, unearned rent has a normal balance of $57. If $18 of rent remains unearned at year end, prepare the the adjusting entry to record rental income earned.
3. On October 1 of the current year, a business prepaid $12 of property tax, in advance, for the next 12 months. As of December 31, it owed but had not yet recorded $6 in wages due in January of the following year. Prepare any adjusting and closing entries you think are needed at year end.
4. What would the normal balance be of a liability account a post closing trial balance? A revenue account? Drawing? Explain.
Click here for the solution: Prepare entries to record the following transactions
(a) a $5,000 cash investment made by the owner of a business.
(b) $1,700 in revenue earned on account.
(c) $2,500 of cash received in advance.
(d) $750 of advertising paid in advance.
(e) a $1,950 withdrawal
(f) the collection of $650 in cash on account.
(g) $275 of supplies purchased on account.
(h) $420 of utilities expense owed.
(i) a $215 cash payment made on account.
(j) $700 of revenue earned in cash.
2. Before any adjustments have been recorded, unearned rent has a normal balance of $57. If $18 of rent remains unearned at year end, prepare the the adjusting entry to record rental income earned.
3. On October 1 of the current year, a business prepaid $12 of property tax, in advance, for the next 12 months. As of December 31, it owed but had not yet recorded $6 in wages due in January of the following year. Prepare any adjusting and closing entries you think are needed at year end.
4. What would the normal balance be of a liability account a post closing trial balance? A revenue account? Drawing? Explain.
Click here for the solution: Prepare entries to record the following transactions
The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows
PR 5-5A The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows:
May1: Issued check no. 205 for May rent. $1000
2. Purchased a vehicle on account from McIntyre Sales Co. $22,300
3. Purchased office equipment on account from Office Mate $520
5. Issued Invoice No. 91 to Martin Co., $5,200
AND SO ON
Check: 2. Total Cash Receipts $73,230
Click here for the solution: The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows
May1: Issued check no. 205 for May rent. $1000
2. Purchased a vehicle on account from McIntyre Sales Co. $22,300
3. Purchased office equipment on account from Office Mate $520
5. Issued Invoice No. 91 to Martin Co., $5,200
AND SO ON
Check: 2. Total Cash Receipts $73,230
Click here for the solution: The transactions completed by Over-Nite Express Company during May 2010, the first month of the fiscal year, were as follows
Presented below are some business transactions that occurred during 2008 for Vicki Prowitz Company
E7-2 Presented below are some business transactions that occurred during 2008 for Vicki Prowitz Company.
(a) Merchandise inventory with a cost of $208,000 is reported at its market value of $260,000.The following entry was made.
Merchandise Inventory 52,000
Gain 52,000
(b) Equipment worth $62,000 was acquired at a cost of $41,000 from a company that had water damage in a flood.The following entry was made.
Equipment 62,000
Cash 41,000
Gain on Purchase of Equipment 21,000
(c) The president of Vicki Prowitz Company, Mark Nabke, purchased a truck for personal use and charged it to his expense account.The following entry was made.
Travel Expense 18,000
Cash 18,000
(d) An electric pencil sharpener costing $50 is being depreciated over 5 years. The following entry was made.
Depreciation Expense—Pencil Sharpener 10
Accumulated Depreciation—Pencil Sharpener 10
Instructions
In each of the situations above, identify the assumption, principle, or constraint that has been violated, if any. Discuss the appropriateness of the journal entries, and give the correct journal entry, if necessary.
Click here for the solution: Presented below are some business transactions that occurred during 2008 for Vicki Prowitz Company
(a) Merchandise inventory with a cost of $208,000 is reported at its market value of $260,000.The following entry was made.
Merchandise Inventory 52,000
Gain 52,000
(b) Equipment worth $62,000 was acquired at a cost of $41,000 from a company that had water damage in a flood.The following entry was made.
Equipment 62,000
Cash 41,000
Gain on Purchase of Equipment 21,000
(c) The president of Vicki Prowitz Company, Mark Nabke, purchased a truck for personal use and charged it to his expense account.The following entry was made.
Travel Expense 18,000
Cash 18,000
(d) An electric pencil sharpener costing $50 is being depreciated over 5 years. The following entry was made.
Depreciation Expense—Pencil Sharpener 10
Accumulated Depreciation—Pencil Sharpener 10
Instructions
In each of the situations above, identify the assumption, principle, or constraint that has been violated, if any. Discuss the appropriateness of the journal entries, and give the correct journal entry, if necessary.
Click here for the solution: Presented below are some business transactions that occurred during 2008 for Vicki Prowitz Company
Thursday, September 24, 2015
Midwest Corp completed the following transactions in 2012, the first year of operation
P8-19 Midwest Corp completed the following transactions in 2012, the first year of operation.
1. Issued 20,000 shares of $10 par common stock at par.
2. Issued 2,000 shares of $30 stated value preferred stock at $32 per share.
3. Purchased 500 shares of common stock as treasury stock for $15 per share.
4. Declared a five percent dividend on preferred stock.
5. Sold 300 shares of treasury stock for $18 per share.
6. Paid the cash dividend on preferred stock that was declared in event four.
7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.
8. Appropriated $6,000 of retained earnings.
Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare the stockholders equity section of the balance sheet as of December 31, 2012.
Click here for the solution: Midwest Corp completed the following transactions in 2012, the first year of operation
1. Issued 20,000 shares of $10 par common stock at par.
2. Issued 2,000 shares of $30 stated value preferred stock at $32 per share.
3. Purchased 500 shares of common stock as treasury stock for $15 per share.
4. Declared a five percent dividend on preferred stock.
5. Sold 300 shares of treasury stock for $18 per share.
6. Paid the cash dividend on preferred stock that was declared in event four.
7. Earned cash service revenue of $75,000 and incurred cash operating expenses of $42,000.
8. Appropriated $6,000 of retained earnings.
Required
a. Organize the transaction in accounts under an accounting equation.
b. Prepare the stockholders equity section of the balance sheet as of December 31, 2012.
Click here for the solution: Midwest Corp completed the following transactions in 2012, the first year of operation
The following transactions apply to Artesia Co for 2012 its first year of operations
P7-26 The following transactions apply to Artesia Co for 2012 its first year of operations.
1. Received 40,000 cash from the issue of a short term note with a five percent interest rate and a one year maturity. The note was issued on April 1, 2012.
2. Received 120,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of six percent.
3. Paid 72,000 cash for other operating expenses during the year.
4. Paid the sales tax due on 100,000 of the services revenue for the year. Sales tax balance on the balance of the revenue is not due until 2013.
5. Recognized the accrued interest at December 31, 2012.
The following transactions apply to Artesia Co for 2013.
1. Paid the balance of the sales tax due for 2012.
2. Received $145,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent.
3. Repaid the principal of the note and applicable interest on April 1, 2013.
4. Paid $85,000 of other operating expenses during the year.
5. Paid the sales tax due on $120,000 of the services revenue. The sales tax on the balance of the revenue is not due until 2014.
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a statement of changes in stockholders equity a balance sheet and a statement of cash flow for 2012 and 2013.
Click here for the solution: The following transactions apply to Artesia Co for 2012 its first year of operations
1. Received 40,000 cash from the issue of a short term note with a five percent interest rate and a one year maturity. The note was issued on April 1, 2012.
2. Received 120,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of six percent.
3. Paid 72,000 cash for other operating expenses during the year.
4. Paid the sales tax due on 100,000 of the services revenue for the year. Sales tax balance on the balance of the revenue is not due until 2013.
5. Recognized the accrued interest at December 31, 2012.
The following transactions apply to Artesia Co for 2013.
1. Paid the balance of the sales tax due for 2012.
2. Received $145,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent.
3. Repaid the principal of the note and applicable interest on April 1, 2013.
4. Paid $85,000 of other operating expenses during the year.
5. Paid the sales tax due on $120,000 of the services revenue. The sales tax on the balance of the revenue is not due until 2014.
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a statement of changes in stockholders equity a balance sheet and a statement of cash flow for 2012 and 2013.
Click here for the solution: The following transactions apply to Artesia Co for 2012 its first year of operations
Wednesday, September 23, 2015
The cash flow statement categorizes like transactions for optimal reporting
E14-13 Classifying items on the indirect statement of cash flows
The cash flow statement categorizes like transactions for optimal reporting.
Requirement:
1. Identify each of the following transactions as one of the following:
• Operating activity (0)
• Investing activity (I)
• Financing activity (F)
• Noncash investing and financing activity (NIF)
• Transaction that is not reported on the statement of cash flows (N)
For each cash flow, indicate whether the item increases (+) or decreases (-) cash. The indirect method is used to report cash flows from operating activities.
___ a. Loss on sale of land.
___ b. Acquisition of equipment by issuance of note payable.
___ c. Payment of long-term debt.
___ d. Acquisition of building by issuance of common stock. J
___ e. Increase in salary payable.
___ f. Decrease in inventory.
___ g. Increase in prepaid expenses.
___ h. Decrease in accrued liabilities.
___ i. Cash sale of land.
___ j. Issuance of long-term note payable to borrow cash.
___ k. Depreciation
___ 1. Purchase of treasury stock.
___ m. Issuance of common stock.
___ n. Increase in accounts payable.
___ o. Net income.
___ p. Payment of cash dividend.
Click here for the solution: The cash flow statement categorizes like transactions for optimal reporting
The cash flow statement categorizes like transactions for optimal reporting.
Requirement:
1. Identify each of the following transactions as one of the following:
• Operating activity (0)
• Investing activity (I)
• Financing activity (F)
• Noncash investing and financing activity (NIF)
• Transaction that is not reported on the statement of cash flows (N)
For each cash flow, indicate whether the item increases (+) or decreases (-) cash. The indirect method is used to report cash flows from operating activities.
___ a. Loss on sale of land.
___ b. Acquisition of equipment by issuance of note payable.
___ c. Payment of long-term debt.
___ d. Acquisition of building by issuance of common stock. J
___ e. Increase in salary payable.
___ f. Decrease in inventory.
___ g. Increase in prepaid expenses.
___ h. Decrease in accrued liabilities.
___ i. Cash sale of land.
___ j. Issuance of long-term note payable to borrow cash.
___ k. Depreciation
___ 1. Purchase of treasury stock.
___ m. Issuance of common stock.
___ n. Increase in accounts payable.
___ o. Net income.
___ p. Payment of cash dividend.
Click here for the solution: The cash flow statement categorizes like transactions for optimal reporting
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