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Please complete the problem below and check it with the following solutions:
On June 1 of the current year, Chad Wilson established a business to manage rental property. He completed the following transactions during June:
Instructions
Indicate the effect of each transaction and the balances after each transaction, using the following tabular headings:
Financial Statements
Please complete the problem below and check it with the following solutions:
The amounts of the assets and liabilities of Nordic Travel Agency at December 31, 2019, the end of the year, and its revenue and expenses for the year follow. The capital of Ian Eisele, owner, was $670,000 on January 1, 2019, the beginning of the year. During the year, Ian withdrew $42,000.
Instructions
Journal entries and trial balance
Please complete the problem below and check it with the following solutions:
On June 1, 2019, Kris Storey established an interior decorating business, Eco-Centric Designs. During the month, Kris completed the following transactions related to the business:
June 1. Kris transferred cash from a personal bank account to an account to be used for the business, $35,000.
1. Paid rent for period of June 1 to end of month, $4,750.
6. Purchased office equipment on account, $14,100.
8. Purchased a van for $28,500 paying $4,500 cash and giving a note payable for the remainder.
10. Purchased supplies for cash, $2,380.
12. Received cash for job completed, $12,200.
15. Paid annual premiums on property and casualty insurance, $3,600.
23. Recorded jobs completed on account and sent invoices to customers, $11,900.
24. Received an invoice for van expenses, to be paid in June, $1,500.
Enter the following transactions on Page 2 of the two-column journal:
June 29. Paid utilities expense, $3,100.
29. Paid miscellaneous expenses, $950.
30. Received cash from customers on account, $7,330.
30. Paid wages of employees, $5,070.
30. Paid creditor a portion of the amount owed for equipment purchased on June 6, $6,825.
30. Withdrew cash for personal use, $1,600.
Instructions
Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.
| 11 Cash | 31 Kris Storey, Capital |
| 12 Accounts Receivable | 32 Kris Storey, Drawing |
| 13 Supplies | 41 Fees Earned |
| 14 Prepaid Insurance | 51 Wages Expense |
| 16 Equipment | 53 Rent Expense |
| 18 Van | 54 Utilities Expense |
| 21 Notes Payable | 55 Van Expense |
| 22 Accounts Payable | 59 Miscellaneous Expense |
Please complete the exercise below and check it with the following solutions:
Concrete Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Jason Payne, Capital; Jason Payne, Drawing; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.
Journalize the following selected transactions for October 2019 in a two-column journal. Journal entry explanations may be omitted.
Oct. 1. Paid rent for the month, $3,600.
3. Paid advertising expense, $1,200.
5. Paid cash for supplies, $750.
6. Purchased office equipment on account, $8,000.
10. Received cash from customers on account, $14,800.
15. Paid creditors on account, $7,110.
27. Paid cash for miscellaneous expenses, $400.
30. Paid telephone bill (utility expense) for the month, $250.
31. Fees earned and billed to customers for the month, $33,100.
31. Paid electricity bill (utility expense) for the month, $1,050.
31. Withdrew cash for personal use, $2,500.
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PE 3-5A: Adjustment for unearned revenue
On June 1, 2019, Herbal Co. received $18,900 for the rent of land for 12 months. Journalize the adjusting entry (include an explanation) required for unearned rent on December 31, 2019.
PE 3-5B: Adjustment for unearned revenue
The balance in the unearned fees account, before adjustment at the end of the year, is $272,500. Journalize the adjusting entry (include an explanation) required if the amount of unearned fees at the end of the year is $189,750.
PE 3-3A: Adjustment for accrued revenues
At the end of the current year, $17,555 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees.
PE 3-3B: Adjustment for accrued revenues
At the end of the current year, $23,570 of fees have been earned but have not been billed to clients. Journalize the adjusting entry (include an explanation) to record the accrued fees.
PE 3-4 A: Adjustment for accrued expense
Prospect Realty Co. pays weekly salaries of $27,600 for a six-day workweek (Monday thru Saturday). Journalize the necessary adjusting entry (include an explanation) assuming that the accounting period ends on Friday.
PE 3-4B: Adjustment for accrued expense
We-Sell Realty Co. pays weekly salaries of $11,800 on Friday for a five-day workweek ending on that day. Journalize the necessary adjusting entry (include an explanation) assuming that the accounting period ends on Wednesday.
Milbank Repairs & Service, an electronics repair store, prepared the following unadjusted trial balance at the end of its first year of operations:
For preparing the adjusting entries, the following data were assembled:
Instructions
Journalize the adjusting entries necessary on June 30, 2019.
Balance sheet
Optimum Weight Loss Co. offers personal weight reduction consulting services to individuals. After all the accounts have been closed on November 30, 2019, the end of the fiscal year, the balances of selected accounts from the ledger of Optimum Weight Loss Co. are as follows:
Prepare a classified balance sheet that includes the correct balance for Cash.
Exercise 4-4A: Closing entries
After the accounts have been adjusted at December 31, the end of the fiscal year, the following balances were taken from the ledger of Pioneer Delivery Services Co.:
Journalize the two entries required to close the accounts.
Exercise 4-4B: Closing entries After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.:
Journalize the two entries required to close the accounts.
Practice Problem 4-2A: Financial Statements and closing entries
Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows:
Instructions
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PE 6-25: Multiple-step income statement
On March 31, 2019, the balances of the accounts appearing in the ledger of Racine Furnishings Company, a furniture wholesaler, are as follows:
Prepare a multiple-step income statement for the year ended March 31, 2019.
Instructions
1. Prepare a multiple-step income statement.Answer: Check Figure: Net income $943,400
2. Prepare a statement of owner's equity.
3. Prepare a balance sheet, assuming that the current portion of the note payable is $50,000.
Journalize the entries for the following transactions:
Sales transactions
Journalize the following merchandise transactions:
A. Sold merchandise on account, $72,500 with terms 2/10, n/30. The cost of the merchandise sold was $43,500.
B. Received payment less the discount.
Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $254,500, terms n/30. The cost of the merchandise sold is $152,700. Showcase Co. issues a credit memo for $30,000 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $17,500. Journalize Showcase Co.'s entries for (a) the sale, including the cost of the merchandise sold; (b) the credit memo, including the cost of the returned merchandise; and (c) the receipt of the check for the amount due from Balboa Co.
Shore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $67,200. Shore Co. paid freight of $1,800. Journalize the entries for Shore Co. and Blue Star Co. for the sale, purchase, and payment of amount due. Assume all discounts are taken.
Journalize the entries to record the following selected transactions:
The following selected transactions were completed by Amsterdam Supply Co., which sells office supplies primarily to wholesalers and occasionally to retail customers:
| Mar 2. | Sold merchandise on account to Equinox Co., $18,900, terms FOB destination, 1/10, n/30. The cost of the merchandise sold was $13,300. | |
| 3. | Sold merchandise for $11,350 plus 6% sales tax to retail cash customers. The cost of merchandise sold was $7,000. | |
| 4. | Sold merchandise on account to Empire Co., $55,400, terms FOB shipping point, n/eom. The cost of merchandise sold was $33,200. | |
| 5. | Sold merchandise for $30,000 plus 6% sales tax to retail customers who used MasterCard. The cost of merchandise sold was $19,400. | |
| 12. | Received check for amount due from Equinox Co. for sale on March 2. | |
| 14. | Sold merchandise to customers who used American Express cards, $13,700. The cost of merchandise sold was $8,350. | |
| 16. | Sold merchandise on account to Targhee Co., $27,500, terms FOB shipping point, 1/10, n/30. The cost of merchandise sold was $16,000. | |
| 18. | Issued credit memo for $4,800 to Targhee Co. for merchandise returned from sale on March 16. The cost of the merchandise returned was $2,900. | |
| 19. | Sold merchandise on account to Vista Co., $8,250, terms FOB shipping point, 2/10, n/30. Added $75 to the invoice for prepaid freight. The cost of merchandise sold was $5,000. | |
| 26. | Received check for amount due from Targhee Co. for sale on March 16 less credit memo of March 18. | |
| 28. | Received check for amount due from Vista Co. for sale of March 19. | |
| 31. | Received check for amount due from Empire Co. for sale of March 4. | |
| 31. | Paid Fleetwood Delivery Service $5,600 for delivery of merchandise in March to customers under shipping terms of FOB destination. | |
| Apr 3. | Paid City Bank $940 for service fees for handling MasterCard and American Express sales during March. | |
| 15. | Paid $6,544 to state sales tax division for taxes owed on sales. |
Instructions
Exercise 6-7: Purchase-related transactions
Warwick's Co., a women's clothing store, purchased $75,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30. Warwick's returned $9,000 of the merchandise, receiving a credit memo, and then paid the amount due within the discount period. Journalize Warwick's entries to record (a) the purchase, (b) the merchandise return, and (c) the payment.
Answer
Check Figure: Cash, cr. $64,680Exercise 6-8: Purchase-related transactions
Journalize entries for the following related transactions of Manville Heating & Air Company:
Purchase-related transactions using perpetual inventory system
The following selected transactions were completed by Capers Company during October of the current year:
Instructions
Exercise 6-19: Adjusting entry for merchandise inventory shrinkage
Paragon Tire Co.'s perpetual inventory records indicate that $2,780,000 of merchandise should be on hand on March 31, 2019. The physical inventory indicates that $2,734,800 of merchandise is actually on hand. Journalize the adjusting entry for the inventory shrinkage for Paragon Tire Co. for the year ended March 31, 2019.
Exercise 6-20: Adjusting entries for refunds, allowances, and returns
Assume the following data for Oshkosh Company before its year-end adjustments:
Journalize the adjusting entries for the following:
Exercise 6-21: Customer returns and allowances
Zell Company had sales of $1,800,000 and related cost of merchandise sold of $1,150,000 for its first year of operations ending December 31, 2019. Zell Company provides customers a refund for any returned or damaged merchandise. At the end of the year, Zell Company estimates that customers will request refunds and allowances for 1.5% of sales and estimates that merchandise costing $16,000 will be returned. Assume that on February 3, 2020, Anderson Co. returned merchandise with a selling price of $5,000 for a cash refund. The returned merchandise originally cost Zell Company $3,100. (a) Journalize the adjusting entries on December 31, 2019, to record the expected customer refunds, allowances, and returns. (b) Journalize the entries to record the returned merchandise and cash refund to Anderson Co.
Problem 6-3A: Sales-related and purchase-related transactions using a perpetual inventory system
The following were selected from among the transactions completed by Babcock Company during November of the current year:
| Nov. 3 | Purchased merchandise on account from Moonlight Co., list price $85,000, trade discount 25%, terms FOB destination, 2/10, n/30. | |
| 4. | Sold merchandise for cash, $37,680. The cost of the merchandise sold was $22,600. | |
| 5. | Purchased merchandise on account from Papoose Creek Co., $47,500, terms FOB shipping point, 2/10, n/30, with prepaid freight of $810 added to the invoice. | |
| 6. | Returned $13,500 ($18,000 list price less trade discount of 25%) of merchandise purchased on November 3 from Moonlight Co. | |
| 8. | Sold merchandise on account to Quinn Co., $15,600 with terms n/15. The cost of the merchandise sold was $9,400. | |
| 13. | Paid Moonlight Co. on account for purchase of November 3, less return of November 6. | |
| 14. | Sold merchandise on VISA, $236,000. The cost of the merchandise sold was $140,000. | |
| 15. | Paid Papoose Creek Co. on account for purchase of November 5. | |
| 23. | Received cash on account from sale of November 8 to Quinn Co. | |
| 24. | Sold merchandise on account to Rabel Co., $56,900, terms 1/10, n/30. The cost of the merchandise sold was $34,000. | |
| 28. | Paid VISA service fee of $3,540. | |
| 30. | Paid Quinn Co. a cash refund of $6,000 for returned merchandise from sale of November 8. The cost of the returned merchandise was $3,300. |
Instructions
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Exercise 9-2A: Allowance method
Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:
| Apr. 15. | Received $800 from Jean Tooley and wrote off the remainder owed of $1,200 as uncollectible. |
| Aug. 7. | Reinstated the account of Jean Tooley and received $1,200 cash in full payment. |
Exercise 9-2B: Allowance method
Journalize the following transactions, using the allowance method of accounting for uncollectible receivables:
| Oct. 2. | Received $600 from Rachel Elpel and wrote off the remainder owed of $1,350 as uncollectible. |
| Dec. 20. | Reinstated the account of Rachel Elpel and received $1,350 cash in full payment. |
Exercise 9-4A: Analysis of receivables method
At the end of the current year, Accounts Receivable has a balance of $3,750,000, Allowance for Doubtful Accounts has a credit balance of $22,750, and sales for the year total $48,400,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $390,000. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
Exercise 9-4B: Analysis of receivables method
At the end of the current year, Accounts Receivable has a balance of $3,460,000, Allowance for Doubtful Accounts has a debit balance of $12,500, and sales for the year total $46,300,000. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $245,000. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
The following transactions were completed by Daws Company during the current fiscal year ended December 31:
| Jan. 29. | Received 35% of the $9,000 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. | |
| Apr. 18. | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $4,000 cash in full payment of Clark's account. | |
| Aug. 9. | Wrote off the $11,850 balance owed by Iron Horse Co., which has no assets. | |
| Nov. 7. | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,000 cash in full payment of the account. | |
| Dec. 31. | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $12,100; DeVine Co., $8,110; Moser Distributors, $21,950; Oceanic Optics, $10,000. | |
| 31. | Based on an analysis of the $1,450,000 of accounts receivable, it was estimated that $60,000 will be uncollectible. Journalized the adjusting entry. |
Instructions
Exercise 9-3A: Percent of sales method
At the end of the current year, Accounts Receivable has a balance of $3,750,000, Allowance for Doubtful Accounts has a credit balance of $22,750, and sales for the year total $48,400,000. Bad debt expense is estimated at ¾ of 1% of sales. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
Exercise 9-3B: Percent of sales method
At the end of the current year, Accounts Receivable has a balance of $3,460,000, Allowance for Doubtful Accounts has a debit balance of $12,500, and sales for the year total $46,300,000. Bad debt expense is estimated at ½ of 1% of sales. Determine (a) the amount of the adjusting entry for uncollectible accounts; (b) the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense; and (c) the net realizable value of accounts receivable.
Exercise 9-6: Providing for doubtful accounts
At the end of the current year, the accounts receivable account has a debit balance of $6,800,000 and sales for the year total $81,500,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the following assumptions:
The following transactions were completed by Daws Company during the current fiscal year ended December 31:
| Jan. 29. | Received 35% of the $9,000 balance owed by Kovar Co., a bankrupt business, and wrote off the remainder as uncollectible. | |
| Apr. 18. | Reinstated the account of Spencer Clark, which had been written off in the preceding year as uncollectible. Journalized the receipt of $4,000 cash in full payment of Clark's account. | |
| Aug. 9. | Wrote off the $11,850 balance owed by Iron Horse Co., which has no assets. | |
| Nov. 7. | Reinstated the account of Vinyl Co., which had been written off in the preceding year as uncollectible. Journalized the receipt of $7,000 cash in full payment of the account. | |
| Dec. 31. | Wrote off the following accounts as uncollectible (one entry): Beth Connelly Inc., $12,100; DeVine Co., $8,110; Moser Distributors, $21,950; Oceanic Optics, $10,000. | |
| 31. | Based on an analysis of the $1,450,000 of accounts receivable, it was estimated that $60,000 will be uncollectible. Journalized the adjusting entry. |
Instructions
The following transactions were completed by The Wild Trout Gallery during the current fiscal year ended December 31:
| Jan. 19. | Reinstated the account of Arlene Gurley, which had been written off in the preceding year as uncollectible. Journalized the receipt of $2,660 cash in full payment of Arlene's account. | |
| Apr. 3. | Wrote off the $12,750 balance owed by Premier GS Co., which is bankrupt. | |
| July 16. | Received 25% of the $22,000 balance owed by Hayden Co., a bankrupt business, and wrote off the remainder as uncollectible. | |
| Nov. 23. | Reinstated the account of Harry Carr, which had been written off two years earlier as uncollectible. Recorded the receipt of $4,000 cash in full payment. | |
| Dec. 31. | Wrote off the following accounts as uncollectible (one entry): Cavey Co., $3,300; Fogle Co., $8,100; Lake Furniture, $11,400; Melinda Shryer, $1,200. | |
| 31. | Based on an analysis of the $2,350,000 of accounts receivable, it was estimated that $60,000 will be uncollectible. Journalized the adjusting entry. |
Instructions
The following were selected from among the transactions completed by Caldemeyer Co. during the current year. Caldemeyer Co. sells and installs home and business security systems.
Instructions
A refrigerator used by a wholesale warehouse has a cost of $64,000, an estimated residual value of $5,200, and an estimated useful life of 12 years. What is the amount of the annual depreciation computed by the straight-line method?
Exercise 10-9: Depreciation by two methods
A Kubota tractor acquired on January 8 at a cost of $85,000 has an estimated useful life of 10 years. Assuming that it will have no residual value, determine the depreciation for each of the first two years (a) by the straight-line method and (b) by the double-declining-balance method.
Answer
Check Figure: $8,500.
Exercise 10-10: Depreciation by two methods
A storage tank acquired at the beginning of the fiscal year at a cost of $75,000 has an estimated residual value of $10,000 and an estimated useful life of 20 years. Determine the following: (a) the amount of annual depreciation by the straight-line method and (b) the amount of depreciation for the first and second years computed by the double-declining-balance method.
Answer
Check Figure: $3,250.
Equipment acquired at a cost of $105,000 has an estimated residual value of $12,000 and an estimated useful life of 10 years. It was placed into service on May 1 of the current fiscal year, which ends on December 31. Determine the depreciation for the current fiscal year and for the following fiscal year by (a) the straight-line method and (b) the double-declining-balance method.
A diesel-powered tractor with a cost of $90,000 and estimated residual value of $15,000 is expected to have a useful operating life of 30,000 hours. During April, the tractor was operated 120 hours. Determine the depreciation for the month.
Exercise 10-18: Disposal of fixed asset
Equipment acquired on January 6 at a cost of $375,000 has an estimated useful life of 20 years and an estimated residual value of $25,000.
Exercise 10-17: Entries for sale of fixed asset
Journalize the disposal of fixed assets.
Equipment acquired on January 8 at a cost of $168,000 has an estimated useful life of 18 years, has an estimated residual value of $15,000, and is depreciated by the straight-line method.
Dexter Industries purchased packaging equipment on January 8 for $72,000. The equipment was expected to have a useful life of three years, or 18,000 operating hours, and a residual value of $4,500. The equipment was used for 7,600 hours during Year 1, 6,000 hours in Year 2, and 4,400 hours in Year 3.
Instructions
Exercise 10-5A: Capital and revenue expenditures
On February 14, Garcia Associates Co. paid $2,300 to repair the transmission on one of its delivery vans. In addition, Garcia paid $450 to install a GPS system in its van. Journalize the entries for the transmission and GPS system expenditures.
Exercise 10-5B: Capital and revenue expenditures
On August 7, Green River Inflatables Co. paid $1,675 to install a hydraulic lift and $40 for an air filter for one of its delivery trucks. Journalize the entries for the new lift and air filter expenditures.
Exercise 10-5A: Capital and revenue expenditures
On February 14, Garcia Associates Co. paid $2,300 to repair the transmission on one of its delivery vans. In addition, Garcia paid $450 to install a GPS system in its van. Journalize the entries for the transmission and GPS system expenditures.
Exercise 10-5B: Capital and revenue expenditures
On August 7, Green River Inflatables Co. paid $1,675 to install a hydraulic lift and $40 for an air filter for one of its delivery trucks. Journalize the entries for the new lift and air filter expenditures.
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used.
| Year 1 | ||
| Jan. 4. | Purchased a used delivery truck for $28,000, paying cash. | |
| Nov. 2. | Paid garage $675 for miscellaneous repairs to the truck. | |
| Dec. 31. | Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. | |
| Year 2 | ||
| Jan. 6. | Purchased a new truck for $48,000, paying cash. | |
| Apr. 1. | Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.) | |
| June 11. | Paid garage $450 for miscellaneous repairs to the truck. | |
| Dec. 31. | Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. | |
| Year 3 | ||
| July 1. | Purchased a new truck for $54,000, paying cash. | |
| Oct. 2. | Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.) | |
| Dec. 31. | Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $12,000 and an estimated useful life of eight years. |
Instructions
Exercise 10-7A: Depletion
Glacier Mining Co. acquired mineral rights for $494,000,000. The mineral deposit is estimated at 475,000,000 tons. During the current year, 31,500,000 tons were mined and sold.
Exercise 10-7B: Depletion
Caldwell Mining Co. acquired mineral rights for $127,500,000. The mineral deposit is estimated at 425,000,000 tons. During the current year, 42,000,000 tons were mined and sold.
On December 31, it was estimated that goodwill of $6,000,000 was impaired. In addition, a patent with an estimated useful economic life of 12 years was acquired for $1,500,000 on April 1.
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Exercise 13-2A: Entries for issuing stock
On May 23, Stoltz Realty Inc. issued for cash 80,000 shares of no-par common stock (with a stated value of $3) at $12. On July 6, Stoltz Realty Inc. issued at par value 18,000 shares of preferred 1% stock, $50 par for cash. On September 15, Stoltz Realty Inc. issued for cash an additional 50,000 shares of no-par common stock (with a stated value of $3) for $15.
Journalize the entries to record the May 23, July 6, and September 15 transactions.
Exercise 13-2B: Entries for issuing stock
On January 22, Zentric Corporation issued for cash 180,000 shares of no-par common stock at $4. On February 14, Zentric Corporation issued at par value 44,000 shares of preferred 2% stock, $55 par for cash. On August 30, Zentric Corporation issued for cash 9,000 shares of preferred 2% stock, $55 par at $60.
Journalize the entries to record the January 22, February 14, and August 30 transactions.
Exercise 13-1A: Dividends per share
Reinhardt Furniture Company has 40,000 shares of cumulative preferred 2% stock, $150 par, and 100,000 shares of $5 par common stock. The following amounts were distributed as dividends:
Determine the dividends per share for preferred and common stock for each year.
Exercise 13-1B: Dividends per share
Zero Calories Company has 16,000 shares of cumulative preferred 1% stock, $40 par, and 80,000 shares of $150 par common stock. The following amounts were distributed as dividends:
Determine the dividends per share for preferred and common stock for each year.
Exercise 13-3A: Entries for cash dividends
The declaration, record, and payment dates in connection with a cash dividend of $350,000 on a corporation's common stock are February 28, April 1, and May 15. Journalize the entries required on each date.
Exercise 13-3B: Entries for cash dividends
The declaration, record, and payment dates in connection with a cash dividend of $480,000 on a corporation's common stock are February 1, March 18, and May 1. Journalize the entries required on each date.
Exercise 13-4A: Entries for stock dividends
Pro-Builders Corporation has 1,500,000 shares of $5 par common stock outstanding. On September 2, Pro-Builders Corporation declared a 3% stock dividend to be issued November 30 to stockholders of record on October 3. The market price of the stock was $36 per share on September 2.
Journalize the entries required on September 2, October 3, and November 30.
Exercise 13-4B: Entries for stock dividends
Antique Buggy Corporation has 820,000 shares of $35 par common stock outstanding. On June 8, Antique Buggy Corporation declared a 5% stock dividend to be issued August 12 to stockholders of record on July 13. The market price of the stock was $63 per share on June 8.
Journalize the entries required on June 8, July 13, and August 12.
Exercise 13-5A: Entries for treasury stock
On January 31, Wilderness Resorts Inc. reacquired 22,500 shares of its common stock at $31 per share. On April 20, Wilderness Resorts sold 12,800 of the reacquired shares at $40 per share. On October 4, Wilderness Resorts sold the remaining shares at $28 per share.
Journalize the transactions of January 31, April 20, and October 4.
Exercise 13-5B: Entries for treasury stock
On May 27, Hydro Clothing Inc. reacquired 75,000 shares of its common stock at $8 per share. On August 3, Hydro Clothing sold 54,000 of the reacquired shares at $11 per share. On November 14, Hydro Clothing sold the remaining shares at $7 per share.
Journalize the transactions of May 27, August 3, and November 14.
Exercise 13-7A: Retained earnings statement
Rockwell Inc. reported the following results for the year ended June 30, 20Y5:
Prepare a retained earnings statement for the fiscal year ended June 30, 20Y5.
Exercise 13-6A: Reporting stockholders' equity
Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet using Method 1 of Exhibit 8. One hundred thousand shares of common stock are authorized, and 5,000 shares have been reacquired.
Exercise 13-6B: Reporting stockholders' equity
Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet using Method 1 of Exhibit 8. Five hundred thousand shares of common stock are authorized, and 40,000 shares have been reacquired.
Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year:
Fifty thousand shares of preferred and 300,000 shares of common stock are authorized. There are 24,000 shares of common stock held as treasury stock.
Prepare the Stockholders' Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 8.
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:
During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:
Instructions
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Morrow Enterprises Inc., with balances on January 1, 20Y5, are as follows:
The following selected transactions occurred during the year:
Instructions
Selected transactions completed by ATV Discount Corporation during the current fiscal year are as follows:
| Jan. 5. | Split the common stock 4 for 1 and reduced the par from $20 to $5 per share. After the split, there were 4,000,000 common shares outstanding. | |
| Mar. 10. | Purchased 100,000 shares of the corporation's own common stock at $30, recording the stock at cost. | |
| Apr. 30. | Declared semiannual dividends of $0.25 on 30,000 shares of preferred stock and $0.08 on the common stock to stockholders of record on May 15, payable on June 15. | |
| June 15. | Paid the cash dividends. | |
| Aug. 20. | Sold 60,000 shares of treasury stock at $40, receiving cash. | |
| Oct. 15. | Declared semiannual dividends of $0.25 on the preferred stock and $0.08 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $35. The dividend date of record is November 15 payable on December 19. | |
| Dec. 19. | Paid the cash dividends and issued the certificates for the common stock dividend. |
Instructions
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Exercise 16-4A: Cash flows from operating activities—indirect method
Demers Inc. reported the following data:
Prepare the Cash flows from operating activities section of the statement of cash flows, using the indirect method.
Exercise 16-4B: Cash flows from operating activities—indirect method
Staley Inc. reported the following data:
Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.
The net income reported on the income statement for the current year was $73,600. Depreciation recorded on store equipment for the year amounted to $27,400. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
Exercise 16-5A: Land transactions on the statement of cash flows
Simkin Corporation purchased land for $420,000. Later in the year, the company sold a different piece of land with a book value of $155,000 for $110,000. How are the effects of these transactions reported on the statement of cash flows?
Exercise 16-9: Reporting changes in equipment on statement of cash flows
An analysis of the general ledger accounts indicates that office equipment, which cost $202,500 and on which accumulated depreciation totaled $84,375 on the date of sale, was sold for $101,250 during the year. Using this information, indicate the items to be reported on the statement of cash flows.
Exercise 16-8: Determining cash payments to stockholders
The board of directors declared cash dividends totaling $585,000 during the current year. The comparative balance sheet indicates dividends payable of $167,625 at the beginning of the year and $146,250 at the end of the year. What was the amount of cash payments to stockholders during the year?
Exercise 16-12: Reporting stockholders' equity items on statement of cash flows
On the basis of the following stockholders' equity accounts, indicate the items, exclusive of net income, to be reported on the statement of cash flows. There were no unpaid dividends at either the beginning or the end of the year.
The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
Instructions
The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:
The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows:
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
AnswerCheck Figure: Net cash flow from operating activities, $(169,600)
