f.acct
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f.acct

Course Number: E/M E/M 102, Spring 2008

College/University: Gustavus

Word Count: 9267

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WILEY plus Financial Accounting by Kimmel Homework E1-9 Sleep Cheap is a private camping ground near the Lathom Peak Recreation Area. It has compiled the following financial information as of December 31, 2007. Revenues during 2007: camping fees Revenues during 2007: general store Accounts payable Cash on hand Equipment $137,000 25,000 11,000 8,500 119,000 Dividends Notes payable Expenses during 2007 Supplies on...

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plus WILEY Financial Accounting by Kimmel Homework E1-9 Sleep Cheap is a private camping ground near the Lathom Peak Recreation Area. It has compiled the following financial information as of December 31, 2007. Revenues during 2007: camping fees Revenues during 2007: general store Accounts payable Cash on hand Equipment $137,000 25,000 11,000 8,500 119,000 Dividends Notes payable Expenses during 2007 Supplies on hand Common stock Retained earnings (1/1/2007) $9,000 50,000 129,000 2,500 40,000 5,000 Determine net income from Sleep Cheap for 2007 and complete the financial statements below based on the information provided. (List assets in order of liquidity and liabilities in order of magnitude with notes payable first.) SLEEP CHEAP Retained Earnings Statement For the Year Ended December 31, 2007 Retained earnings January 1 Net income Dividends Retained earnings December 31 $ 5,000 33,000 38,000 9,000 $ 29,000 SLEEP CHEAP Balance Sheet December 31, 2007 Assets Cash Supplies Equipment Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' equity Common stock Retained earnings Total liabilities and stockholders' equity 40,000 29,000 69,000 $ 130,000 $ 50,000 11,000 $ 61,000 $ 8,500 2,500 119,000 $ 130,000 On June 1 Fix-it-Up Service Company was started with an investment of $26,200 cash. Here are the assets and liabilities of the company on June 30, and the revenues and expenses for the month of June, its first month of operations. Cash Accounts receivable Revenue Supplies Advertising expense Equipment P1-3A $4,600 4,000 8,000 2,400 400 32,000 Notes payable Accounts payable Supplies expense Gas & oil expense Utilities expense Wage expense $14,000 500 1,000 600 300 1,400 In June, the company issued no additional common stock, but paid dividends of $2,000. Complete an income statement and a retained earnings statement for the month of June and a balance sheet at June 30, 2007. (List expenses in order of magnitude. Assets in order of liquidity and liabilities in order of magnitude with notes payable first.) FIX-IT-UP SERVICE CO. Income Statement For the Month Ended June,30 2007 Revenues Revenue Expenses Wage expense Supplies expense Gas & oil expense Advertising expense Utilities expense Total expenses Net income FIX-IT-UP SERVICE CO. Retained Earnings Statement For the Month Ended June,30 2007 Retained earnings, June 1 Net income Dividends Retained earnings, June 30 FIX-IT-UP SERVICE CO. Balance Sheet June,30 2007 Assets Cash Accounts receivable Supplies Equipment Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' equity Common stock Retained earnings Total liabilities and stockholders' equity P1-4A Presented below are selected financial statement items for Linus Corporation for December 31, 2007. Inventory Cash paid to suppliers Building Common stock Cash dividends paid Cash paid to purchase equipment $ 25,000 108,000 200,000 50,000 7,000 10,000 26,200 2,300 28,500 $43,000 $14,000 500 $14,500 $4,600 4,000 2,400 32,000 $43,000 $0 4,300 4,300 2,000 $2,300 $1,400 1,000 600 400 300 3,700 $4,300 $8,000 Equipment Revenues Cash received from customers Cash received from issuing common stock 40,000 100,000 137,000 22,000 Determine which items should be included in a statement of cash flows, and then complete the statement of cash flows for Linus Corporation. (List multiple activities with a positive cash flow first, then in order of magnitude. Show all numbers as positive and subtract as necessary to arrive at the answers.) LINUS CORPORATION Statement of Cash Flows For the Year Ended December 31, 2007 Cash flows from operating activities: Cash received from customers Cash paid to suppliers Net cash provided by operating activities Cash flows from investing activities: Cash paid to purchase equipment Net cash used by investing activities Cash flows from financing activities: Cash received from issuing common stock Cash dividends paid Net cash provided by financing activities Net increase in cash P1-5A Silberman Corporation was formed on January 1, 2007. At December 31, 2007, Scott Brantner, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows. SILBERMAN CORPORATION Balance Sheet December 31, 2007 Liabilities and Stockholders' Equity $20,000 55,000 33,000 24,000 Accounts Payable Notes Payable Boat Loan Stockholders' Equity $40,000 15,000 18,000 55,000 22,000 7,000 15,000 $ 34,000 10,000 10,000 $ 137,000 108,000 $ 29,000 Assets Cash Accounts Receivable Inventory Boat Scott willingly admits that he is not an accountant by training. He is concerned that his balance sheet might not be correct. He has provided you with the following additional information. 1. 2. 3. The boat actually belongs to Brantner, not to Silberman Corporation. However, because he thinks he might take customers out on th boat occasionally, he decided to list it as an asset of the company. To be consistent he also listed as a liability of the corporation his personal loan that he took out at the bank to buy the boat. The inventory was originally purchased for $21,000, but due to a surge in demand Scott now thinks he could sell it for $33,000. He thought it would be best to record it at $33,000. Included in the accounts receivable balance is $12,000 that Scott loaned to his brother 5 years ago. Scott included this in t he receivables of Silberman Corporation so he wouldn't forget that his brother owes him money. Provide a corrected balance sheet for Silberman Corporation. (List assets in order of liquidity and liabilities in order of magnitude with notes payable first.) SILBERMAN CORPORATION Balance Sheet December 31, 2007 Assets Cash $20,000 Accounts receivable Inventory Total assets Liabilities and Stockholders' Equity Liabilities Notes payable Accounts payable Total liabilities Stockholders' equity Total liabilities and stockholders' equity 43,000 21,000 $84,000 $15,000 40,000 55,000 29,000 $84,000 AE2-4 These items are taken from the financial statements of Donovan Co. at December 31, 2007. Building Accounts receivable Prepaid insurance Cash Equipment Land Insurance expense Depreciation expense Interest expense Common stock Retained earnings (January 1, 2007) Accumulated depreciation--building Accounts payable Mortgage payable Accumulated depreciation--equipment Interest payable Bowling revenues $116,380 12,600 4,860 15,156 90,640 67,320 780 4,770 2,600 68,200 53,824 41,040 9,500 102,960 18,720 3,600 17,262 Assume that $14,960 of the mortgage payable will be paid in 2008. Complete the following classified balance sheet. (List current assets in order of liquidity and liabilities in order of magnitude. All answers are expressed as positive amounts.) DONOVAN COMPANY Balance Sheet December 31, 2007 Assets Current assets Cash Accounts receivable Prepaid insurance Total current assets Property, plant, and equipment Land Building Less: Accumulated depreciation-building Equipment Less: Accumulated depreciation-equipment $ 116,380 41,040 90,640 18,720 71920 214,580 75340 67,320 $ 15,156 12,600 4,860 $ 32616 Total assets Liabilities and Stockholders' Equity Current liabilities Current portion of mortgage payable Accounts payable Interest payable Total current liabilities Long-term liabilities Mortgage payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity E2-7 These financial statement items are for Snyder Corporation at year-end, July 31, 2007. Salaries payable Salaries expense Utilities expense Equipment Accounts payable Commission revenue Rent revenue Long-term note payable Common Stock Cash Accounts receivable Accumulated depreciation Dividends Depreciation expense Retained earnings (beginning of the year) $2,080 51,700 22,600 18,500 4,100 61,100 8,500 1,800 16,000 24,200 9,780 6,000 4,000 4,000 35,200 68,200 62,936 $ 14960 9,500 3,600 $ 247,196 $ 28060 88000 116,060 131,136 $ 247,196 Complete the following income statement, retained earnings statement, and classified balance sheet. Snyder Corporation did not issue any new stock during the year. (Revenues and expenses should be listed in order of magnitude. List assets in order of liquidity and liabilities in order of magnitude. Present all numbers as positive numbers and subtract as necessary.) SNYDER CORPORATION Income Statement For the Year Ended July 31, 2007 Revenues Commission revenue Rent revenue Total revenues Expenses Salaries expense Utilities expense Depreciation expense Total expenses Net loss SNYDER CORPORATION Retained Earnings Statement For the Year Ended July 31, 2007 Retained earnings, August 1, 2006 51,700 22,600 4,000 78,300 $ 8,700 $ 61,100 8,500 $ 69,600 $ 35,200 Less : Net loss Dividends Retained earnings, July 31, 2007 SNYDER CORPORATION Balance Sheet July 31, 2007 Assets Current assets Cash Accounts receivable Total current assets Property, plant, and equipment Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Salaries payable Total current liabilities Long-term note payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 16,000 22,500 38,500 $ 46,480 $ 4,100 2,080 $ 6,180 1,800 7,980 18,500 6,000 12,500 $ 46,480 $ 24,200 9,780 $ 33,980 $ 8,700 4,000 12,700 $ 22,500 Compute the current ratio and debt to total assets ratio. (Round answers to 1 decimal place, ie: 4.1) Current ratio 5.5 : 1 Debt to total assets ratio 17.2 % P2-2A These items are taken from the financial statements of Drew Corporation for 2007. Retained earnings (beginning of year) Utilities expense Equipment Accounts payable Cash Salaries payable Common stock Dividends Service revenue Prepaid insurance Repair expense Depreciation expense $31,000 2,000 66,000 13,300 17,900 3,000 13,000 12,000 82,000 3,500 1,800 3,300 Accounts receivable Insurance expense Salaries expense Accumulated depreciation 14,200 2,200 37,000 17,600 Complete the following: an income statement, a retained earnings statement, and a classified balance sheet for December 31, 2007. (List expenses in order of magnitude. List assets in order of liquidity and liabilities in order of magnitude.) DREW CORPORATION Income Statement For the Year Ended December 31, 2007 Revenues Service revenue Expenses Salaries expense Depreciation expense Insurance expense Utilities expense Repair expense Total expenses Net income DREW CORPORATION Retained Earnings Statement For the Year Ended December 31, 2007 Retained earnings, January 1 Plus: Net income Less: Dividends Retained earnings, December 31 DREW CORPORATION Balance Sheet December 31, 2007 Assets Current assets Cash Accounts receivable Prepaid insurance Total current assets Property, plant, and equipment Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Salaries payable Total current liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 13,000 54,700 67,700 $ 84,000 $ 13,300 3,000 $ 16,300 66,000 17,600 48,400 $ 84,000 $ 17,900 14,200 3,500 $ 35,600 $ 31,000 35,700 66,700 12,000 $ 54,700 $ 37,000 3,300 2,200 2,000 1,800 46,300 $ 35,700 $ 82,000 P2-3A You are provided with the following information for Maxim Enterprises, effective as of its April 30, 2007, year-end. Accounts payable Accounts receivable Building, net of accumulated depreciation Cash Common stock Cost of goods sold Current portion of long-term debt Depreciation expense Dividends paid during the year Equipment, net of accumulated depreciation Income tax expense Income taxes payable Interest expense Inventories Land Long-term debt Prepaid expenses Retained earnings, beginning Revenues Selling expenses Short-term investments Wages expense Wages payable $834 810 1,537 770 900 990 450 335 325 1,220 165 135 400 967 1,600 3,500 12 1,600 3,600 210 1,200 700 222 Complete an income statement, a retained earnings statement and a classified balance sheet for Maxim Enterprises for the year ended April 30, 2007. (List expenses in order of magnitude. List assets in order of liquidity and liabilities in order of magnitude.) MAXIM ENTERPRISES Income Statement For the Year Ended April 30, 2007 Revenues Revenues Expenses Cost of goods sold Wages expense Interest expense Depreciation expense Selling expenses Income tax expense Total expenses Net income MAXIM ENTERPRISES Retained Earnings Statement For the Year Ended April 30, 2007 $ 990 700 400 335 210 165 2,800 $ 800 $ 3,600 Retained earnings, May 1 Plus: Net income Less: Dividends Retained earnings, April 30 MAXIM ENTERPRISES Balance Sheet April 30, 2007 Assets Current assets Cash Short-term investments Accounts receivable Inventories Prepaid expenses Total current assets Property, plant and equipment Land Building, net of accumulated depreciation Equipment, net of accumulated depreciation Total property, plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Current portion of long-term debt Wages payable Income taxes payable Total current liabilities Long-term debt Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 900 2,075 $ 834 450 222 135 1,600 1,537 1,220 $ 770 1,200 810 967 12 $ 1,600 800 2,400 325 $ 2,075 $ 3,759 4,357 $ 8,116 $ 1,641 3,500 5,141 2,975 $ 8,116 P2-5A Here are financial statements of Chiasson Company. CHIASSON COMPANY Income Statement For the Year Ended December 31 2007 Net sales Cost of goods sold Selling and administrative expense Interest expense Income tax expense Net income $2,218,500 1,012,400 906,000 98,000 69,000 $ 133,100 CHIASSON COMPANY Balance Sheet December 31 Assets Current assets Cash Short-term investments Accounts receivable (net) Inventory Total current assets Plant assets (net) Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 2007 $ 60,100 54,000 169,800 125,000 408,900 625,300 $1,034,200 $ 180,000 35,500 215,500 200,000 415,500 330,000 288,700 618,700 $1,034,200 Additional information: The cash provided by operating activities for 2007 was $190,800. The cash used for capital expenditures was $92,000. The cash used for dividends was $26,000. The average number of shares outstanding during the year was 50,000. Compute these values and ratios for 2007. (Round all ratios to two decimal places, ie: 17.54% or 6.25 : 1) (a) Working capital. $ 193400 (b) Current ratio. 1.9 :1 (c) Free cash flow. $ 72800 (d) Debt to total assets ratio. 40.18 % (e) Earnings per share. $ 2.66 P2-7A Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Target (2/3/04) Wal-Mart (1/31/04) Income Statement Data for Year Net sales Cost of goods sold Selling and administrative expense Interest expense Other income (loss) Income taxes Net income $ 46,781 31,790 10,696 559 (776) 1,119 $1,841 Target $256,329 198,747 44,909 832 2,331 5,118 $ 9,054 Wal-Mart Balance Sheet Data (End of Year) Current assets Noncurrent assets Total assets $12,928 18,464 $31,392 $34,421 70,491 $104,912 Current liabilities Long-term debt $8,314 12,013 $37,418 23,871 Total stockholders' equity Total liabilities and stockholders' equity 11,065 $31,392 43,623 $104,912 Cash from operating activities Cash paid for capital expenditures Dividends paid Average shares outstanding $3,160 $3,004 $237 911 $15,996 $10,308 $1,569 4,373 For each company, compute these values and ratios. (If a number is negative show with a (-) preceding it.) (a) Working capital. Target $ 4614 Wal-Mart $ -2997 (b) Current ratio. (Round to 1 decimal place, ie: 6.2 : 1) Target 1.6 :1 Wal-Mart 0.9 :1 (c) Debt to total assets ratio. (Round to 1 decimal place, ie: 17.5% ) Target 64.8 % Wal-Mart 58.4 % (d) Free cash flow. Target $ -81 Wal-Mart $ 4119 (e) Earnings per share. (Round to 2 decimal places, ie $5.24) Target $ 2.02 Wal-Mart $ 2.07 Which company has better liquidity Target Which company has better solvency Wal-Mart Which company has better profitability Both about the same E3-15 The accounts in the ledger of Dependable Delivery Service contain the following balances on July 31, 2007. Accounts Receivable Accounts Payable Cash Delivery Equipment Gas and Oil Expense Insurance Expense Notes Payable, due 2010 $13,400 7,400 ? 59,360 758 600 28,450 Prepaid Insurance Repair Expense Service Revenue Dividends Common Stock Salaries Expense Salaries Payable Retained Earnings (July 1, 2007) $1,800 1,200 15,500 700 40,000 4,428 900 5,200 Complete the following Trial Balance. (If a number for a column should be blank enter a 0 in the appropriate box, all boxes must be filled.) DEPENDABLE DELIVERY SERVICE Trial Balance July 31, 2007 Debit Credit Cash Accounts Receivable Prepaid Insurance Delivery Equipment Accounts Payable Salaries Payable Notes Payable Due 2010 Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Gas and Oil Expense Repair Expense Insurance Expense $ 15204 13,400 1,800 59,360 0 0 0 0 0 700 0 4,428 758 1,200 600 $ 97450 $0 0 0 0 7,400 900 28,450 40,000 5,200 0 15,500 0 0 0 0 $ 97450 Complete the income statement, statement of retained earnings, and classified balance sheet. (List expenses in order of magnitude, assets in order of liquidity and liabilities in order of magnitude.) DEPENDABLE DELIVERY SERVICE Income Statement For Month Ended July 31, 2007 Revenues Service Revenue Expenses Salaries Expense Repair Expense Gas & Oil Expense Insurance Expense Total expenses Net income DEPENDABLE DELIVERY SERVICE Retained Earnings Statement For Month Ended July 31, 2007 Retained earnings, July 1 Add: Net income Less: Dividends Retained earnings, July 31 DEPENDABLE DELIVERY SERVICE Balance Sheet July 31, 2007 Assets Current Assets Cash Accounts receivable Prepaid insurance Total current assets Delivery equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Salaries payable $ 7400 900 $ 15204 13,400 1,800 $ 30404 59,360 $ 89764 $ 5,200 8514 13,714 700 $ 13,014 $ 4428 1200 758 600 6986 $ 8514 $ 15,500 Total current liabilities Notes payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity P3-2A 40,000 13,014 $ 8300 28,450 36750 53014 $ 89764 Marie Blaesing started her own consulting firm, Blaesing Consulting Inc., on May 1, 2007. The following transactions occurred during the month of May. May 1 2 3 5 9 12 15 17 20 23 26 29 30 Stockholders invested $12,000 cash in the business in exchange for common stock. Paid $700 for office rent for the month. Purchased $500 of supplies on account. Paid $150 to advertise in the County News. Received $1,000 cash for services provided. Paid $200 cash dividend. Performed $3,200 of services on account. Paid $2,500 for employee salaries. Paid for the supplies purchased on account on May 3. Received a cash payment of $1,500 for services provided on account on May 15. Borrowed $5,000 from the bank on a note payable. Purchased office equipment for $2,400 paying $200 in cash and the balance on account. Paid $150 for utilities. Show the effects of the previous transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. (If no number is required for that account enter 0 in the table. All boxes must be filled. If entering a negative number use the negative (-) sign preceding the number.) Assets = Liabilities + Stockholders' Equity Cash + Accounts Receivable + 0 0 0 0 0 0 3200 0 0 -1500 0 0 0 1700 Supplies + Office Equipment = 0 0 0 0 0 0 0 0 0 0 0 2400 0 2400 Notes Payable + 0 0 0 0 0 0 0 0 0 0 5000 0 0 5000 Accounts Payable + 0 0 500 0 0 0 0 0 -500 0 0 2200 0 2200 Common Stock + 12,000 0 0 0 0 0 0 0 0 0 0 0 0 12000 Retained Earnings 0 -700 0 -150 1000 -200 3200 -2500 0 0 0 0 -150 500 May 1 2 3 5 9 12 15 17 20 23 26 29 30 Total 12,000 -700 0 -150 1000 -200 0 -2500 -500 1500 5000 -200 -150 15100 0 0 500 0 0 0 0 0 0 0 0 0 0 500 Complete the income statement and classified balance sheet using the information from the table above. (List expenses in order of magnitude, list assets in order of liquidity and liabilities in order of magnitude.) BLAESING CONSULTING INC. Income Statement For Month Ended May 31, 2007 Revenues Service Revenue Expenses Salaries Expense Rent Expense Utilities Expense Advertising Expense Total expenses Net income BLAESING CONSULTING iNC. Balance Sheet May 31, 2007 Assets Current Assets Cash Accounts Receivable Supplies Total current assets Office Equipment Total assets Liabilities and Stockholders' Equity Current liabilities Notes Payable Accounts Payable Total current liabilities Stockholders' equity Common Stock Retained Earnings Total liabilities and stockholders' equity 12000 500 12500 $ 19700 $ 5000 2200 $ 7200 $ 15100 1700 500 $ 17300 2400 $ 19700 $ 2500 700 150 150 3500 $ 700 $ 4200 P3-5A F.L. Wright Architects incorporated as licensed architects on April 1, 2007. During the first month of the operation of the business, these events and transactions occurred: April 1 1 2 3 10 11 20 30 30 - Stockholders invested $14,000 cash in exchange for common stock of the corporation. Hired a secretary-receptionist at a salary of $375 per week, payable monthly. Paid office rent for the month $900. Purchased architectural supplies on account from Spring Green Company $1,000. Completed blueprints on a carport and billed client $1,100 for services. Received $500 cash advance from J. Madison to design a new home. Received $2,300 cash for services completed and delivered to M. Svetlana. Paid secretary-receptionist for the month $1,500. Paid $100 to Spring Green Company for accounts payable due. Journalize the transactions. The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Revenue, Common Stock, Service Revenue, Salaries Expense, and Rent Expense. (If no entry is required type No entry for the account and 0 for the amount.) Date Account / Description Debit Credit April 1 Cash $ 14,000 Common Stock $ 14,000 April 1 No Entry $0 No Entry $0 April 2 Rent Expense $ 900 Cash $ 900 April 3 Supplies $ 1000 Accounts Payable $ 1000 April 10 Accounts Receivable $ 1100 Service Revenue $ 1100 April 11 Cash $ 500 Unearned Revenue $ 500 April 20 Cash $ 2,300 Service Revenue $ 2,300 April 30 Salaries Expense $ 1500 Cash $ 1500 April 30 Accounts Payable $ 100 Cash $ 100 Complete the following trial balance. (If the number for the column should be blank enter a 0 in the appropriate box, all boxes must be filled.) F. L. WRIGHT ARCHITECTS INC. Trial Balance April 30, 2007 Debit Cash $ 14300 Accounts receivable 1100 Supplies 1000 Accounts payable 0 Unearned Revenue 0 Common stock 0 Service revenue 0 Salaries Expense 1500 900 Rent expense $ 18800 Credit $0 0 0 900 500 14,000 3400 0 0 $ 18800 P3-7A IZO COMPANY Trial Balance June 30, 2007 Cash ($2,180 - $690 + $960) Accounts Receivable ($3,370 + $690 $960 - $80 + $800) Supplies ($800 - $340) Equipment ($3,000 + $340) Accounts Payable ($2,666 - $206 - $260) Unearned Revenue Common Stock Dividends ($800 + $600) Service Revenue Salaries Expense ($3,600 + $500 - $600) Office expense Debit $2,450 3,820 460 3,340 0 0 0 1,400 0 3,500 910 $15,880 Credit $0 0 0 0 2,200 1,200 9,000 0 3,480 0 0 $15,880 P3-8A The Three-Peat Theater Inc. was recently formed. It began operations in March 2007. The Three-Peat is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Three-Peat showed: Cash $16,000; Land $38,000; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $12,000; and Common Stock $80,000. During the month of March the following events and transactions occurred. Mar. 2 - Rented the three Star Wars movies (Star Wars, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $12,000; $2,000 was paid in cash and $10,000 will be paid on March 10. 3 - Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $400 per night. 9 - Received $9,200 cash from admissions. 10 - Paid balance due on Star Wars movies rental and $2,600 on March 1 accounts payable. 11 - Hired J. Bybee to operate concession stand. Bybee agrees to pay The Three-Peat Theater 15% of gross receipts, payable monthly. 12 - Paid advertising expenses $900. 20 - Received $7,100 cash from customers for admissions. 20 - Received the Star Trek movies and paid rental fee of $4,000. 31 - Paid salaries of $3,800. 31 - Received statement from J. Bybee showing gross receipts from concessions of $9,000 and the balance due to The Three-Peat of $1,350 for March. Bybee paid half the balance due and will remit the remainder on April 5. 31 - Received $20,000 cash from customers for admissions. In addition to the accounts identified above, the chart of accounts includes: Accounts Receivable, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, and Salaries Expense. Record the journal entries (If no entry is necessary enter No Entry for the account and 0 for the amount. For multiple debit/credit entries, list accounts in order of magnitude.) Date Mar. 2 Account / Description Film Rental Expense Accounts Payable Cash No Entry No Entry Cash Admission Revenue Accounts Payable Cash No Entry No Entry Advertising Expense Cash Cash Admission Revenue Film Rental Expense Cash Salaries Expense Cash Cash Accounts Receivable Concession Revenue Cash Admission Revenue Debit $ 12,000 Credit $ 10,000 $ 2,000 $0 $0 $ 9,200 $ 9,200 $ 12,600 $ 12,600 $0 $0 $ 900 $ 900 $ 7,100 $ 7,100 $ 4,000 $ 4,000 $ 3800 $ 3800 $ 675 $ 675 $ 1350 $ 20,000 $ 20,000 Mar. 3 Mar. 9 Mar. 10 Mar. 11 Mar. 12 Mar. 20 Mar. 20 Mar. 31 Mar. 31 Mar. 31 Complete the trial balance on March 31, 2007. (If the number for the column should be blank enter a 0 in the appropriate box, all boxes must be filled.) THREE-PEAT THEATER INC. Trial Balance March 31,2007 Debit Cash $ 29,675 Accounts Receivable 675 Land 38000 Buildings 22000 Equipment 16000 Accounts Payable 0 Common Stock 0 Admission Revenue 0 Concession Revenue 0 Advertising Expense 900 Credit $0 0 0 0 0 9400 80,000 36300 1350 0 Film Rental Expense Salaries expense 16000 3800 $ 127,050 0 0 $ 127,050 P3-9A The bookkeeper for Shirley Temple's dance studio made the following errors in journalizing and posting. 1. 2. 3. 4. 5. 6. 7. 8. A credit to Supplies of $600 was omitted. A debit posting of $300 to Accounts Payable was inadvertently debited to Accounts Receivable. A purchase of supplies on account of $450 was debited to Supplies for $540 and credited to Accounts Payable for $540. A credit posting of $250 to Wages Payable was posted twice. A debit posting to Wages Payable for $250 and a credit posting to Cash for $250 were made twice. A debit posting for $1,200 of Dividends was inadvertently posted to Travel Expense instead. A credit to Service Revenue for $350 was inadvertently posted as a debit to Service Revenue. A credit to Accounts Receivable of $250 was credited to Accounts Payable. For each item indicate (1) whether the trial balance will balance - (yes or no); if the trial balance will not balance indicate (2) the amount of the difference, and (3) the trial balance column that will have the larger total. Consider each item separately. Use the following form. Number 1 is given as an example. (If there is no difference enter 0 for the amount and None for the larger column). Item # 1. 2. 3. 4. 5. 6. 7. 8. P4-3A The Julien Hotel opened for business on May 1, 2007. Here is its trial balance before adjustment on May 31. JULIEN HOTEL Trial Balance May 31, 2007 Cash Prepaid Insurance Supplies Land Lodge Debit $ 2,500 1,800 2,600 15,000 70,000 Credit (1) In Balance (Yes or No) No Yes Yes No Yes Yes No Yes (2) Difference $ $600 $0 $0 $ 250 $0 $0 $ 700 $0 (3) Larger Column (Credit, Debit, None) Debit None None Credit None None Debit None Furniture Accounts Payable Unearned Rent Revenue Mortgage Payable Common Stock Rent Revenue Salaries Expense Utilities Expense Advertising Expense 16,800 $ 4,700 3,300 36,000 60,000 9,000 3,000 800 500 $113,000 $113,000 Other data: 1. 2. 3. 4. 5. 6. Insurance expires at the rate of $300 per month. An inventory of supplies shows $1,350 of unused supplies on May 31. Annual depreciation is $3,600 on the lodge and $3,000 on furniture. The mortgage interest rate is 9%. (The mortgage was taken out on May 1.) Unearned rent of $1,500 has been earned. Salaries of $750 are accrued and unpaid at May 31. Journalize the adjusting entries on May. Date Account / Description 1. May 31 Insurance Expense Prepaid Insurance 2. May 31 Supplies Expense Supplies 3. May 31 Depr. Expense-Lodge Accum. Depr.-Lodge To record lodge depreciation. Depr. Expense-Furniture Accum. Depr.-Furniture To record furniture depreciation. 4. May 31 Interest Payable 5. May 31 Unearned Rent Revenue Rent Revenue 6. May 31 Salaries Expense Salaries Payable Debit $ 300 $ 1250 $ 1250 $ 300 $ 300 $ 250 $ 250 $ 270 $ 270 $ 1500 $ 1500 $ 750 $ 750 Credit $ 300 Post the above adjusting entries to T-accounts and then complete the Adjusted Trial Balance as of May 31, 2007 below . (If an amount is 0 enter it in the appropriate box. Note that all boxes must be filled.) JULIEN HOTEL Adjusted Trial Balance May 31, 2007 Account Cash Prepaid Insurance Supplies Land Lodge Accumulated Depreciation - Lodge Furniture Accumulated Depreciation - Furniture Accounts Payable Unearned Rent Revenue Salaries Payable Interest Payable Mortgage Payable Common Stock Rent Revenue Salaries Expense Utilities Expense Advertising Expense Interest Expense Insurance Expense Supplies Expense Depreciation Expense - Lodge Depreciation Expense - Furniture Debit $ 2500 1500 1350 15,000 70,000 0 16,800 0 0 0 0 0 0 0 0 3750 800 500 270 300 1250 300 250 $ 114,570 Credit $0 0 0 0 0 300 0 250 4,700 1800 750 270 36,000 60,000 10,500 0 0 0 0 0 0 0 0 $ 114,570 Complete the Income Statement, Retained Earnings Statement and Balance Sheet below. (List expenses in order of magnitude.) JULIEN HOTEL Income Statement For the Month Ended May 31, 2007 Revenues Rent revenue Expenses Salaries Expense Supplies Expense Utilities Expense Advertising Expense Insurance Expense Depr. Expense-Lodge $ 10500 $ 3750 1250 800 500 300 300 Interest Expense Depr. Expense-Furniture Total Expenses Net Income 270 250 7420 $ 3,080 JULIEN HOTEL Retained Earnings Statement For the Month Ended May 31, 2007 Retained earnings, May 1 Add: Net income Retained earnings, May 31 $0 3080 $ 3080 (List assets in order of liquidity and liabilities in order of magnitude.) JULIEN HOTEL Balance Sheet May 31, 2007 Assets Current assets Cash Supplies Prepaid Insurance Total current assets Property, plant, and equipment Land Lodge Less: Accum. Depr-Lodge Furniture Less: Accum. Depr-Furniture Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Salaries payable Interest Payable Total current liabilities Long-term liabilities Mortgage payable Total liabilities Stockholders' equity Common stock Retained earnings 60,000 3080 $ 4700 1800 750 270 $ 7520 36000 43520 $ 2500 1350 1500 5350 $ 15,000 70,000 300 16,800 250 69,700 16550 101,250 106,600 Total stockholders' equity Total liabilities and stockholders' equity Indicate which accounts should be closed on May 31. Account Cash Prepaid Insurance Supplies Land Lodge Accumulated Depreciation - Lodge Furniture Accumulated Depreciation - Furniture Accounts Payable Unearned Rent Revenue Salaries Payable Interest Payable Mortgage Payable Common Stock Rent Revenue Salaries Expense Utilities Expense Advertising Expense Interest Expense Insurance Expense Supplies Expense Depreciation Expense - Lodge Depreciation Expense - Furniture P4-5A Closed, Not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed not closed closed closed closed closed closed closed closed closed closed 63,080 106,600 A review of the ledger of Kaffen Company at December 31, 2007, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $15,950: The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2006, for $10,500. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2007, for $7,200. This policy has a term of 2 years. 2. Unearned Subscription Revenue $29,400: The company began selling magazine subscriptions on October 1, 2007 on an annual basis. The selling price of a subscription is $30. A review of subscription contracts reveals the following. Subscription Number of Start Date Subscriptions October 1 280 November 1 300 December 1 400 980 3. Notes Payable, $40,000: This balance consists of a note for 6 months at an annual interest rate of 8%, dated October 1. 4. Salaries Payable $0: There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $600 each per week, and three employees earn $700 each per week. December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December. Prepare the adjusting entries at December 31, 2007. Date 1. Dec. 31 2. Dec. 31 3. Dec. 31 4. Dec. 31 E4-5 In its first year of operations, Bere Company earned $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers. The company incurred operating expenses of $14,500. Of these expenses $13,000 were paid in cash; $1,500 was still owed on account at year-end. In addition, Bere prepaid $3,600 for insurance coverage that would not be used until the second year of operations. Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the accrual basis of accounting. Cash basis $ 5400 Accrual basis $ 13500 Account / Description Insurance Expense Prepaid Insurance Unearned Subscription Revenue Subscription Revenue Interest Expense Interest Payable Salaries Expense Salaries Payable Debit $ 7100 $ 4600 $ 4600 $ 800 $ 800 $ 3060 $ 3060 Credit $ 7100 P4-6A Happy Camper Travel Court was organized on July 1, 2006, by Brianna Brunn. Brianna is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Brianna prepared the following income statement for her fourth quarter, which ended June 30, 2007. HAPPY CAMPER TRAVEL COURT Income Statement For the Quarter Ended June 30, 2007 Revenues Travel court rental revenues Operating expenses Advertising $3,800 Wages 80,500 Utilities 900 Depreciation 2,700 $216,000 Repairs Net income 4,000 91,900 $124,100 Brianna suspected that something was wrong with the statement because net income had never exceeded $30,000 in any one quarter. Knowing that you are an experienced accountant, she asks you to review the income statement and other data. You first look at the trial balance. In addition to the account balances reported above in the income statement, the ledger contains the following additional selected balances at June 30, 2007. Supplies Prepaid insurance Note payable You then make inquiries and discover the following: 1. Travel court rental revenues include advanced rental payments received for summer occupancy, in the amount of $60,000. 2. There were $1,300 of supplies on hand at June 30. 3. Prepaid insurance resulted from the payment of a one-year policy on April 1, 2007. 4. The mail in July 2007 brought the following bills: advertising for the week of June 24, $110; repairs made June 18, $4,450; and utilities for the month of June, $215. 5. There are three employees who receive wages that total $250 per day. At June 30, two days' wages have been incurred but not paid. 6. The note payable is a 8% note dated May 1, 2007, and due on July 31, 2007. 7. Income tax of $13,400 for the quarter is due in July but has not yet been recorded. Prepare any adjusting journal entries required as at June 30, 2007. (For multiple debit/credit entries, list accounts in order of magnitude.) Date 1. June 30 2. June 30 3. June 30 4. June 30 Account / Description Travel court rental revenue Unearned rental revenue Supplies expense Supplies Insurance expense Prepaid insurance Repairs expense Utilities expense Advertising expense Accounts payable Wages expense Wages payable Interest expense Interest payable Income tax expense Income tax payable Debit $ 60000 $ 6900 $ 6900 $ 3600 $ 3600 $ 4,450 $ 215 $ 110 $ 4775 $ 500 $ 500 $ 160 $ 160 $ 13400 $ 13400 Credit $ 60000 $ 8,200 14,400 12,000 5. June 30 6. June 30 7. June 30 Complete the corrected Income Statement below. (List expenses in order of magnitude.) HAPPY CAMPER TRAVEL COURT Income Statement For the Quarter Ended June 30, 2007 Revenues Travel court rental revenue Expenses Wages expense Income tax expense Repairs expense Supplies expense Advertising expense Insurance expense Depreciation expense Utilities expense Interest expense Total Expenses Net Income $ 81,000 13400 8450 6900 3910 3600 2700 1115 160 121235 $ 34,765 $ 156000 P4-5A A review of the ledger of Kaffen Company at December 31, 2007, produces these data pertaining to the preparation of annual adjusting entries. 1. Prepaid Insurance $15,950: The company has separate insurance policies on its buildings and its motor vehicles. Policy B4564 on the building was purchased on July 1, 2006, for $10,500. The policy has a term of 3 years. Policy A2958 on the vehicles was purchased on January 1, 2007, for $7,200. This policy has a term of 2 years. 2. Unearned Subscription Revenue $29,400: The company began selling magazine subscriptions on October 1, 2007 on an annual basis. The selling price of a subscription is $30. A review of subscription contracts the reveals following. Subscription Number of Start Date Subscriptions October 1 280 November 1 300 December 1 400 980 3. Notes Payable, $40,000: This balance consists of a note for 6 months at an annual interest rate of 8%, dated October 1. 4. Salaries Payable $0: There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of $600 each per week, and three employees earn $700 each per week. December 31 is a Wednesday. Employees do not work weekends. All employees worked the last 3 days of December. Prepare the adjusting entries at December 31, 2007. Date 1. Dec. 31 Account / Description Insurance Expense Prepaid Insurance Debit $ 7100 Credit $ 7100 2. Dec. 31 3. Dec. 31 4. Dec. 31 Unearned Subscription Revenue Subscription Revenue Interest Expense Interest Payable Salaries Expense Salaries Payable $ 4600 $ 4600 $ 800 $ 800 $ 3060 $ 3060 P4-8A Katie Gage opened New View Window Washing Inc. on July 1, 2007. During July the following transactions were completed. July 1 July 1 July 3 July 5 July 12 July 18 July 20 July 21 July 25 July 31 July 31 Issued 11,000 shares of common stock for $11,000 cash. Purchased used truck for $9,000, paying $3,000 cash and the balance on account. Purchased cleaning supplies for $800 on account. Paid $1,440 cash on 1-year insurance policy effective July 1. Billed customers $3,200 for cleaning services. Paid $1,000 cash on amount owed on truck and $500 on amount owed on cleaning supplies. Paid $2,000 cash for employee salaries. Collected $1,400 cash from customers billed on July 12. Billed customers $2,000 for cleaning services. Paid $260 for gas and oil used in the truck during month. Declared and paid a $600 cash dividend. Journalize the July transactions. (For multiple debit/credit entries, list accounts in order of magnitude.) Date July 1 Account / Description Cash Common Stock (To record the issuance of stock) Equipment Accounts Payable Cash (To record the purchase of a truck) Cleaning Supplies Accounts Payable Prepaid Insurance Cash Accounts Receivable Service Revenue Accounts Payable Cash Salaries Expense Cash Cash Accounts Receivable Accounts Receivable Service Revenue Debit $ 11,000 Credit $ 11,000 $ 9,000 $ 6,000 $ 3,000 $ 800 $ 800 $ 1440 $ 1440 $ 3200 $ 3200 $ 1500 $ 1500 $ 2000 $ 2000 $ 1400 $ 1400 $ 2000 $ 2000 July 1 July 3 July 5 July 12 July 18 July 20 July 21 July 25 July 31 July 31 Gas & Oil Expense Cash (Paid for gas and oil) Dividends Cash (Declared and paid a dividend) $ 260 $ 260 $ 600 $ 600 Post the transaction to ledger T-accounts and then complete the Trial Balance below. (If an amount is 0 enter it in the appropriate box. Note that all boxes must be filled.) NEW VIEW WINDOW WASHING INC. Trial Balance July 31, 2007 Debit Cash $ 3600 Accounts Receivable 3800 Cleaning Supplies 800 Prepaid Insurance 1440 Equipment 9000 Accounts Payable 0 Common Stock 0 Dividends 600 Service Revenue 0 Salaries Expense 2000 260 Gas & Oil Expense $ 21500 Journalize the following adjustments. 1. 2. 3. 4. 5. Services provided but unbilled and uncollected at July 31 were $1,700. Depreciation on equipment for the month was $250. One-twelfth of the insurance expired. An inventory count shows $360 of cleaning supplies on hand at July 31. Accrued but unpaid employee salaries were $400. Credit $0 0 0 0 0 5300 11,000 0 5200 0 0 $ 21500 Date Account / Description 1. July 31 Accounts Receivable Service Revenue 2. July 31 Depreciation Expense Accumulated Depreciation 3. July 31 Insurance Expense Prepaid Insurance 4. July 31 Cleaning Supplies Expense Debit $ 1700 $ 250 Credit $ 1700 $ 250 $ 120 $ 120 $ 440 Cleaning Supplies 5. July 31 Salaries Expense Salaries Payable $ 440 $ 400 $ 400 Post the transaction and the adjusting entries to ledger T-accounts and complete the Adjusted Trial Balance below. (If an amount is 0 enter it in the appropriate box. Note that all boxes must be filled.) NEW VIEW WINDOW WASHING INC. Adjusted Trial Balance July 31, 2007 Debit Cash $ 3600 Accounts Receivable 5500 Cleaning Supplies 360 Prepaid Insurance 1320 Equipment 9000 Accumulated Depreciation 0 Accounts Payable 0 Salaries Payable 0 Common Stock 0 Dividends 600 Service Revenue 0 Salaries Expense 2400 Gas & Oil Expense 260 Depreciation Expense 250 Insurance Expense 120 440 Cleaning Supplies Expense $ 23850 Credit $0 0 0 0 0 250 5300 400 11,000 0 6900 0 0 0 0 0 $ 23850 Complete the Income Statement, Retained Earnings Statement and Balance Sheet below. (List expenses in order of magnitude.) NEW VIEW WINDOW WASHING INC. Income Statement For the Month Ended July 31, 2007 Revenues Service revenue Expenses Salaries Expense Cleaning Supplies Expense Gas & Oil Expense Depreciation Expense Insurance Expense Total Expenses Net Income $ 6900 $ 2400 440 260 250 120 3470 $ 3430 NEW VIEW WINDOW WASHING INC. Retained Earnings Statement For the Month Ended July 31, 2007 Retained earnings, July 1 Add: Net income Less: Dividends Retained earnings, July 31 $0 3430 3430 600 $ 2830 (List current assets in order of liquidity and current liabilities in order of magnitude.) NEW VIEW WINDOW WASHING INC. Balance Sheet July 31, 2007 Assets Current assets Cash Accounts Receivable Cleaning supplies Prepaid Insurance Total current assets Property, plant, and equipment Equipment Less: Accumulated Depreciation Total assets Liabilities and Stockholders' Equity Current liabilities Accounts Payable Salaries Payable Total current liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 5300 400 $ 5700 11,000 2830 13830 $ 19530 $ 3600 5500 360 1320 $ 10780 9000 250 8750 $ 19530 Journalize the post closing entries. (For multiple debit/credit entries list the items in order of magnitude.) Date July 31 Account / Description Service Revenue Income Summary (To close revenue accounts.) Income Summary Salaries Expense Debit $ 6900 Credit $ 6900 $ 3470 $ 2400 July 31 Cleaning Supplies Expense Gas & Oil Expense Depreciation Expense Insurance Expense (To close expense accounts.) July 31 Income Summary Retained Earnings July 31 (To close income summary. ) Retained Earnings Dividends (To close dividends.) $ 600 $ $ $ 440 $ 260 $ 250 $ 120 $ 600 Complete the post closing Trial Balance below. (If an amount is 0 enter it in the appropriate box. Note that all boxes must be filled.) NEW VIEW WINDOW WASHING INC. Post-Closing Trial Balance July 31, 2007 Debit Cash $ 3600 Accounts Receivable 5500 Cleaning Supplies 360 Prepaid Insurance 1320 Equipment 9000 Accumulated Depreciation 0 Accounts Payable 0 Salaries Payable 0 Common Stock 0 Retained Earnings 0 Dividends 0 Service Revenue 0 Salaries Expense 0 Gas & Oil Expense 0 Depreciation Expense 0 Insurance Expense 0 0 Cleaning Supplies Expense $ 19780 Credit $0 0 0 0 0 250 5300 400 11,000 2830 0 0 0 0 0 0 0 $ 19780 P5-3A At the beginning of the current season on April 1, the ledger of Fairway Pro Shop showed Cash $2,500; Merchandise Inventory $3,500; and Common Stock $6,000. The following transactions were completed during April 2007. Apr. 5 7 9 10 12 14 17 20 21 27 30 Purchased golf bags, clubs, and balls on account from Kokott Co. $1,800, terms 3/10, n/60. Paid freight on Kokott purchase $80. Received credit from Kokott Co. for merchandise returned $200. Sold merchandise on account to members $910, terms n/30. The merchandise sold had a cost of $620. Purchased golf shoes, sweaters, and other accessories on account from Eagle Sportswear $730, terms 1/10, n/30 Paid Kokott Co. in full. Received credit from Eagle Sportswear for merchandise returned $30. Made sales on account to members $840, terms n/30. The cost of the merchandise sold was $550. Paid Eagle Sportswear in full. Granted an allowance to members for clothing that did not fit properly $60. Received payments on account from members $1,100. Journalize the April transactions using a perpetual inventory system. (For multiple debit/credit entries, list accounts in order of magnitude. Round all answers to 0 decimal places.) Date Apr. 5 Apr. 7 Apr. 9 Apr. 10 Description Merchandise Inventory Accounts Payable Merchandise Inventory Cash Accounts Payable Merchandise Inventory Accounts Receivable Sales (To record the sale.) Cost of Goods Sold Merchandise Inventory (To record cost of inventory.) Merchandise Inventory Accounts Payable Accounts Payable Cash Merchandise Inventory Accounts Payable Merchandise Inventory Accounts Receivable Sales (To record the sale.) Cost of Goods Sold Merchandise Inventory (To record cost of inventory.) Accounts Payable Cash Merchandise Inventory Debit $ 1800 $ 80 $ 80 $ 200 $ 200 $ 910 $ 910 $ 620 $ 620 $ 730 $ 730 $ 1600 $ 1552 $ 48 $ 30 $ 30 $ 840 $ 840 $ 550 $ 550 $ 700 $ 693 $7 Credit $ 1800 Apr. 12 Apr. 14 Apr. 17 Apr. 20 Apr. 21 Apr. 27 Apr. 30 Sales Returns and Allowances Accounts Receivable Cash Accounts Receivable $ 60 $ 60 $ 1100 $ 1100 Using T accounts, enter the beginning balances in the ledger accounts and post the April transactions. Then complete the trial balance on April 30, 2007, and income statement through gross profit below. (If an amount is 0 enter it in the appropriate box. Note all boxes must be filled.) FAIRWAY PRO SHOP Trial Balance April 30, 2007 Cash Accounts Receivable Merchandise Inventory Accounts Payable Common Stock Sales Sales Returns and Allowances Cost of Goods Sold Debit $ 1275 590 4655 0 0 0 60 1170 $ 7,750 Credit $0 0 0 0 6000 1750 0 0 $ 7,750 FAIRWAY PRO SHOP Income Statement (Partial) For the Month Ended April 30, 2007 Sales revenues Sales Less: Sales Returns and Allowances Net Sales Cost of Goods Sold\ Gross Profit $ 1750 60 $ 1690 1170 $ 520 P5-1A Post the transactions to T accounts. Be sure to enter the beginning cash and common stock balances. Then complete the income statement through gross profit for the month of May 2007 below. (For multiple accounts, list in order of magnitude.) BANFF HARDWARE STORE Income Statement (Partial) For the month ended May 31, 2007 Sales revenues Sales Less: Sales discounts Sales returns and allowances Net Sales $ 12,680 $ 156 124 280 12,400 Cost of Goods Sold Gross profit 8,060 $ 4,340 Calculate the profit margin ratio and the gross profit rate. (Assume operating expenses were $2,400.) (Round to three decimal places.) Profit margin ratio .156 Gross profit rate .35 P5-5A An inexperienced accountant prepared this condensed income statement for Lahti Company, a retail firm that has been in business for a number of years. LAHTI COMPANY Income Statement For the Year Ended December 31, 2007 Revenues Net sales Other revenues Cost of goods sold Gross Profit Operating Expenses Selling expenses Administrative expenses Total expenses Net earnings 104,000 93,000 197,000 $ 120,000 $ 850,000 22,000 872,000 555,000 317,000 As an experienced, knowledgeable accountant, you review the statement and determine the following facts. 1. Net sales consist of sales $906,000, less delivery expense on merchandise sold $26,000, and sales returns and allowances $30,000. 2. Other revenues consist of sales discounts $14,000 and rent revenue $8,000. 3. Selling expenses consist of salespersons' salaries $80,000; depreciation on accounting equipment $8,000; advertising $10,000; and sales commissions $6,000. The commissions represent commission paid. At December 31, $3,000 of commissions have been earned by salespersons but have not been paid. 4. Administrative expenses consist of office salaries $37,000; dividends $18,000; utilities $12,000; interest expense $2,000; and rent expense $24,000, which includes prepayments totaling $4,000 for the first quarter of 2008. Complete the correct detailed multiple-step income statement below. (List multiple accounts in order of magnitude.) LAHTI COMPANY Income Statement For the Year Ended December 31, 2007 Sales revenues Sales Less: Sales Returns and Allowances Sales discounts Net Sales Cost of Goods Sold Gross Profit Operating Expenses Sales salaries expense Office salaries expense Delivery Expense Rent expense Utilities expense Advertising Expense Sales Commissions Expense Depreciation expense Total expenses Income from operations Other revenues and gains Rent revenue Other expenses and losses Interest expense Net income $ 906,000 $ 30,000 14,000 44,000 862,000 555,000 307,000 $ 80,000 37,000 26,000 20,000 12,000 10,000 9,000 8,000 202,000 105,000 8,000 2,000 6,000 $ 111,000 P5-4A Zwick Department Store is located in midtown Metropolis. During the past several years, net income has been declining because suburban shopping centers have been attracting business away from city areas. At the end of the company's fiscal year on November 30, 2007, these accounts appeared in its adjusted trial balance. Accounts Payable Accounts Receivable Accumulated Depreciation - Delivery Equipment Accumulated Depreciation Store Equipment Cash Common Stock Cost of Goods Sold Delivery Expense Delivery Equipment Depreciation Expense Delivery Equipment Depreciation Expense Store Equipment Dividends Gain on Sale of Equipment Insurance Expense $ 18,300 17,200 20,000 38,000 8,000 35,000 633,300 6,200 57,000 4,000 9,500 12,000 2,000 9,000 Interest Expense Merchandise Inventory Notes Payable Prepaid Insurance Property Tax Expense Property Taxes Payable Rent Expense Retained Earnings Salaries Expense Sales Sales Commissions Expense Sales Commissions Payable Sales Returns and Allowances Store Equipment Utilities Expense Additional data: Notes payable are due in 2011. 5,000 36,200 47,500 6,000 3,500 3,500 29,000 14,200 110,000 914,000 17,000 6,000 20,000 105,000 10,600 Complete the multiple-step income statement below. (List expenses in order of magnitude.) ZWICK DEPARTMENT STORE Income Statement For the Year Ended November 30, 2007 Sales revenues Sales Less: Sales returns and allowances Net Sales Cost of Goods Sold Gross Profit Operating Expenses Salaries expense Rent expense Sales commissions expense Utilities expense Depr. exp.-Store equip. Insurance expense Delivery expense Depr. exp.-Delivery equip. Property tax expense Total operating expenses Income from operations Other revenues and gains Gain on sale of equipment Other expenses and losses $ 914,000 20,000 894,000 633,300 260,700 $ 110,000 29,000 17,000 10,600 9,500 9,000 6,200 4,000 3,500 198,800 61,900 $ 2,000 Interest expense Net income Complete a retained earnings statement below. ZWICK DEPARTMENT STORE Retained Earnings Statement For the Year Ended November 30, 2007 Retained earnings, December 1, 2006 Add: Net income Less: Dividends Retained earnings, November 30, 2007 5,000 3,000 $ 58,900 $ 14,200 58,900 73,100 12,000 $ 61,100 Complete a classified balance sheet below. (List assets in order of liquidity and liabilities in order of magnitude.) ZWICK DEPARTMENT STORE Balance Sheet November 30, 2007 Assets Current assets Cash Accounts Receivable Merchandise inventory Prepaid Insurance Total current assets Property, plant, and equipment Store equipment Less: Acc. Depr.-Store equip. Delivery equipment Less: Acc. Depr.-Delivery equip. Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Sales commissions payable Property taxes payable Total current liabilities Long-term liabilities Notes payable Total liabilities Stockholders' equity Common stock 35,000 47,500 75,300 $ 18,300 6,000 3,500 $ 27,800 $ 8,000 17,200 36,200 6,000 67,400 $ 105,000 38,000 57,000 20,000 $ 67,000 37,000 104,000 171,400 Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 61,100 96,100 $ 171,400 Calculate the profit margin ratio and the gross profit rate. (Round to three decimal places.) Profit margin ratio .066 Gross profit rate .292 The vice-president of marketing and the director of human resources have developed a proposal whereby the company would compensate the sales force on a strictly commission basis using 20% of net sales. Given the increased incentive, they expect net sales to increase by 15%. As a result, they estimate that gross profit will increase by $39,105 and operating expenses by $75,595. Compute the expected new net income. (Hint: You do not need to prepare an income statement). Net income 22,410 Then compute the revised profit margin ratio and gross profit rate. (Round to three decimal places.) Profit margin ratio .022 Gross profit rate .292 P5-6A The trial balance of Save-More Wholesale Company contained the following accounts at December 31, the end of the company's fiscal year. SAVE-MORE WHOLESALE COMPANY Trial Balance December 31, 2007 Debit Cash $ 33,400 Accounts Receivable 37,600 Merchandise Inventory 70,000 Land 92,000 Buildings 200,000 Acc. Depreciation-Buildings Credit $ 60,000 Equipment Acc. Depreciation-Equipment Notes Payable Accounts Payable Common Stock Retained Earnings Dividends Sales Sales Discounts Cost of Goods Sold Salaries Expense Utilities Expense Repair Expense Gas & Oil Expense Insurance Expense 83,500 40,500 54,700 37,500 160,000 68,200 10,000 922,100 5,000 709,900 71,300 9,400 8,900 7,200 4,800 $1,343,000 $1,343,000 Adjustment data: Depreciation is $10,000 on the buildings and $9,000 on the equipment (Both are operating expenses.). 2. Interest of $5,500 is due and unpaid on notes payable at December 31. Other data: $15,000 of notes payable are payable next year. 1. Journalize the adjusting entries at December 31. Date Description Dec. 31 Depreciation Expense-Buildings Acc. Depreciation-Buildings (To record depreciation on buildings.) Dec. 31 Depreciation Expense-Equipment Acc. Depreciation-Equipment (To record depreciation on equipment.) Dec. 31 Interest Expense Interest Payable (To record interest on the note.) Debit 10,000 Credit 10,000 9,000 9,000 5,500 5,500 Prepare T accounts for all accounts used in part a.) and enter the trial balance amounts into the T accounts and post the adjusting entries. Complete the adjusted trial balance below. (If an amount is 0 enter it in the appropriate box. Note that all boxes must be filled.) SAVE-MORE WHOLESALE COMPANY Adjusted Trial Balance December 31, 2007 Debit Credit Cash Accounts Receivable Merchandise Inventory Land Buildings Acc. Depreciation-Buildings Equipment Acc. Depreciation- Equipment Notes Payable Accounts Payable Interest Payable Common Stock Retained Earnings Dividends Sales Sales Discounts Cost of Goods Sold Salaries Expense Utilities Expense Repair Expense Gas & Oil Expense Insurance Expense Depr. Expense - Buildings Depr. Expense - Equipment Interest Expense Totals $ 33,400 37,600 70,000 92,000 200,000 0 83,500 0 0 0 0 0 0 10,000 0 5,000 709,900 71,300 9,400 8900 7200 4800 10,000 9,000 5,500 $ 1,367,500 $0 0 0 0 0 70,000 0 49,500 54,700 37,500 5,500 160,000 68,200 0 922,100 0 0 0 0 0 0 0 0 0 0 $ 1,367,500 Complete the multiple-step income statement and a retained earnings statement for the year, and a classified balance she December 31, 2007 below. (List expenses in order of magnitude.) SAVE-MORE WHOLESALE COMPANY Income Statement For the Year Ended December 31, 2007 Sales revenues Sales Less: Sales Discounts Net Sales Cost of Goods Sold Gross Profit Operating Expenses Salaries Expense Depr. Expense-Buildings Utilities Expense $ 71,300 10,000 9,400 $ 922,100 5,000 917,100 709,900 207,200 Depr. Expense-Equipment Repair Expense Gas and Oil Expense Insurance Expense Total operating expenses Income from operations Other expenses and losses Interest Expense Net income 9,000 8,900 7,200 4,800 120,600 $ 86,600 5,500 $ 81,100 SAVE-MORE WHOLESALE COMPANY Retained Earnings Statement For the Year Ended December 31, 2007 Retained Earnings, January 1 Add: Net Income Less: Dividends Retained Earnings, December 31 (List assets in order of liquidity and liabilities in order of magnitude with notes listed first.) SAVE-MORE WHOLESALE COMPANY Balance Sheet December 31, 2007 Assets Current assets Cash Accounts Receivable Merchandise Inventory Total current assets Property, plant, and equipment Land Buildings Less: Acc. Depr.-Buildings Equipment Less: Acc. Depr.-Equipment Total assets Liabilities and Stockholders' Equity Current liabilities Notes Payable due in 2008 Accounts Payable $ 15,000 37,500 $ 200,000 70,000 83,500 49,500 $ 33,400 37,600 70,000 $ 68 81 149 10 $ 139 $ 141 92,000 $ 130,000 34,000 256 $ 397 Interest Payable Total current liabilities Long-term liabilities Notes Payable due after 2008 Total liabilities Stockholders' equity Common Stock Retained Earnings Total stockholders' equity Total liabilities and stockholders' equity 5,500 $ 58,000 39,700 97,700 160,000 139,300 299,300 $ 397,000 P6-1A For each of the following transactions, specify whether the item in question should be Included or Excluded in ending inventory, and if so, at what amount. (If excluded from inventory put 0 for the amount, note all boxes must be filled.) Schilling Limited is trying to determine the value of its ending inventory as of February 28, 2007, the company's yearend. The accountant counted everything that was in the warehouse, as of February 28, which resulted in an ending inventory valuation of $48,000. However, she didn't know how to treat the following transactions so she didn't record them. Included/Excluded Amount (a) On February 26, Schilling shipped to a customer goods costing $800. The goods were shipped FOB shipping point, and the receiving report indicates that the customer received the goods on March 2. (b) On February 26, Seller Inc. shipped goods to Schilling FOB destination. The invoice price was $350 plus $25 for freight. The receiving report indicates that the goods were received by Schilling on March 2. (c) Schilling had $500 of inventory at a customer's warehouse "on approval." The customer was going to let Schilling know whether it wanted the merchandise by the end of the week, March 4. (d) Schilling also had $400 of inventory at a Balena craft shop, on consignment from Schilling. (e) On February 26, Schilling ordered goods costing $750. The goods were shipped FOB shipping point on February 27. Schilling received the goods on March 1. (f) On February 28, Schilling packaged goods and had them ready for shipping to a customer FOB destination. The invoice price was $350 plus $25 for freight; the cost of the items was $280. The receiving report indicates that the goods were received by the customer on March 2. (g) Schilling had damaged goods set aside in the warehouse because they are no longer saleable. These goods originally cost $400 and, Excluded $0 Excluded $0 Included Included $ 500 $ 400 Included $ 750 Included Excluded $ 280 $0 originally, Schilling expected to sell these items for $600. P6-2A Classic Distribution markets CDs of numerous performing artists. At the beginning of March, Classic had in beginning inventory 1,500 CDs with a unit cost of $7. During March Classic made the following purchases of CDs. March 5 March 13 2,000 @ $8 5,500 @ $9 March 21 March 26 6,000 @ $10 2,000 @ $11 During March 13,000 units were sold. Classic uses a periodic inventory system. Determine the cost of goods available for sale. $ 158,000 Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average cost). (For average cost round the per unit calculations to 3 decimal places. Round all answers to 0 decimal places.) Ending Inventory FIFO $ 42,000 LIFO $ 31,000 Average Cost $ 37,176 Cost of Goods Sold FIFO $ 116,000 LIFO $ 127,000 Average Cost $ 120,824 Which cost flow method results in the highest inventory amount for the balance sheet? FIFO Which cost flow method results in the highest cost of goods sold for the income statement? LIFO P6-4A The management of Stampfer Inc. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2007 the accounting records show these data. Inventory, January 1 (10,000 units) Cost of 120,000 units purchased Selling price of 100,000 units sold Operating expenses $35,000 480,000 730,000 120,000 Units purchased consisted of 35,000 units at $3.70 on May 10; 60,000 units at $3.90 on August 15; and 25,000 units at $4.66 on November 20. Income taxes are 28%. Complete the comparative condensed income statements for 2007 under FIFO and LIFO below. STAMPFER, INC. Condensed Income Statements For the Year Ended December 31, 2007 FIFO Sales Cost of goods sold Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory Cost of goods sold Gross profit Operating expenses Income before income taxes Income tax expense Net income Answer the following questions for management. 35,000 480,000 515,000 136,000 379,000 351,000 120,000 231,000 64,680 $ 166,320 $ 730,000 LIFO $ 730,000 35,000 480,000 515,000 109,000 406,000 324,000 120,000 204,000 57,120 $ 146,880 (1) Which cost flow method (FIFO or LIFO) produces the more meaningful inventory amount for the balance sheet? FIFO (2) Which cost flow method (FIFO or LIFO) produces the more meaningful net income? LIFO (3) Which cost flow method (FIFO or LIFO) is more likely to approximate the actual physical flow of goods? FIFO (4) How much more cash will be available for management under LIFO than under FIFO? $ 7560 (5) How much of the gross profit under FIFO is illusionary in comparison with the gross profit under LIFO? 27000 P6-6A You have the following information for Rock Bottom Rocks. Rock Bottom uses the periodic method of accounting for its inventory transactions. Rock Bottom only carries one brand and size of diamonds-all are identical. Each batch of diamonds purchased is carefully coded and marked with its purchase cost. March 1 March 3 March 5 March 10 March 25 Beginning inventory 200 diamonds at a cost of $300 per diamond. Purchased 200 diamonds at a cost of $360 each. Sold 180 diamonds for $600 each. Purchased 330 diamonds at a cost of $375 each. Sold 500 diamonds for $650 each. (a) Assume that Rock Bottom Rocks uses the specific identification cost flow method. (1) Demonstrate how Rock Bottom could maximize its gross profit for the month by specifically selecting which diamonds to sell on March 5 and March 25. Rock Bottom should sell the lowest cost diamonds. (2) Demonstrate how Rock Bottom could minimize its gross profit for the month by selecting which diamonds to sell on March 5 and March 25. Rock Bottom should sell the highest cost diamonds. (b) Assume that Rock Bottom uses the FIFO cost flow assumption. Calculate cost of goods sold. $ 237,000 How much gross profit would Rock Bottom report under this cost flow assumption? $ 196,000 (c) Assume that Rock Bottom uses the LIFO cost flow assumption. Calculate cost of goods sold. $ 240,750 How much gross profit would the company report under this cost flow assumption? $ 192,250 E6-13 Disch Hardware reported cost of goods sold as follows. 2008 2007 $ 30,000 $ 20,000 175,000 164,000 205,000 184,000 37,000 30,000 $168,000 $154,000 Beginning inventory Cost of goods purchased Cost of goods available for sale Ending inventory Cost of goods sold Disch made two errors: 1. 2007 ending inventory was overstated by $4,000. 2. 2008 ending inventory was understated by $2,000. Compute the correct cost of goods sold for each year. Cost of goods sold 2007 $ 158,000 2008 $ 162,000 P6-7A This information is available for the Automotive and Other Operations Divisions of General Motors Corporation for 2004. General Motors uses the LIFO inventory method. (in millions) Beginning inventory Ending inventory LIFO reserve Current assets Current liabilities Cost of goods sold Sales 2004 $10,960 11,717 1,442 55,515 74,892 150,053 161,545 Calculate the inventory turnover ratio and days in inventory. (Round to 1 decimal place.) Inventory turnover ratio 13.2 Days in inventory 27.7 days Calculate the current ratio based on LIFO inventory. (Round to 2 decimal places.) .74 : 1 After adjusting for the LIFO reserve, calculate the current ratio. (Round to 2 decimal places.) .76 : 1 P7-3 On July 31, 2007, Hanlon Company had a cash balance per books of $6,140. The statement from Jackson State Bank on that date showed a balance of $7,695.80. A comparison of the bank statement with the cash account revealed the following facts. 1. The bank service charge for July was $25. 2. The bank collected a note receivable of $1,800 for Hanlon Company on July 15, plus $30 of interest. The bank made a $10 charge for the collection. Hanlon has not accrued any interest on the note. 3. The July 31 receipts of $1,193.30 were not included in the bank deposits for July. These receipts were deposited by the company in a night deposit vault on July 31. 4. Company check No. 2480 issued to H. Coby, a creditor, for $384 that cleared the bank in July was incorrectly entered in the cash payments journal on July 10 for $348. 5. Checks outstanding on July 31 totaled $1,480.10. 6. On July 31 the bank statement showed an NSF charge of $490 for a check received by the company from P. Figura, a customer, on account. Complete the bank reconciliation as of July 31, 2007 below. (For multiple items under Add or Less list in order of magnitude.) HANLON COMPANY Bank Reconciliation July 31, 2007 Cash balance per bank statement Add: Deposits in transit Less: Outstanding checks Adjusted cash balance per bank Cash balance per books Add: Collection of note receivable Less: NSF check Error in recording check No. 2480 Bank service charge $ 490 36 25 551 $ 7409 $ 7695.80 1193.30 8889.1 1480.10 $ 7409 $ 6140 1820 7960 Prepare the necessary adjusting entries at July 31, 2007. (For multiple debit/credit entries, list accounts in order of magnitude.) Date July 31 Account / Description Cash Miscellaneous expense Notes receivable Interest revenue (To record the collection of note receivable) Accounts receivable Cash (To record NSF check) Accounts payable Cash (To record check error) Miscellaneous expense Cash (To record bank service charge) Debit $ 1820 $ 10 Credit $ 1800 $ 30 July 31 $ 490 $ 490 $ 36 $ 36 $ 25 $ 25 July 31 July 31 P7-5 Green Acres Company of Canton, Iowa, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2007, the company's cash account per its general ledger showed a balance of $6,738.90. The bank statement from Canton State Bank on that date showed the following balance. CANTON NATIONAL BANK Checks and Debits XXX Deposits and Credits XXX Daily Balance 5-31 7,112.00 A comparison of the details on the bank statement with the details in the cash account revealed the following facts. 1. The statement included a debit memo of $40 for the printing of additional company checks. 2. Cash sales of $833.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $839.15. The bank credited Green Acres Company for the correct amount. 3. Outstanding checks at May 31 totaled $276.25, and deposits in transit were $1,180.15. 4. On May 18, the company issued check No. 1181 for $685 to R. Delzer, on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Green Acres Company for $658. 5. A $2,200 note receivable was collected by the bank for Green Acres Company on May 31 plus $110 interest. The bank charged a collection fee of $20. No interest has been accrued on the note. 6. Included with the cancelled checks was a check issued by Green Day Company to P. Jonet for $360 that was incorrectly charged to Green Acres Company by the bank. 7. On May 31, the bank statement showed an NSF charge of $580 for a check issued by Natalie Fong, a customer, to Green Acres Company on account. Complete the bank reconciliation as of May 31, 2007 below. (List multiple items in order of magnitude.) GREEN ACRES COMPANY Bank Reconciliation May 31, 2007 Cash balance per bank statement Add: Deposits in transit Bank error Less: Outstanding checks Adjusted cash balance per bank Cash balance per books Add: Collection of note receivable Less: NSF check Check printing charge Error in recording check Error in deposit Adjusted cash balance per books $580.00 40.00 27.00 6.00 $7,112.00 $1,180.15 360.00 1,540.15 8,652.15 276.25 $8,375.90 $6,738.90 2,290.00 9,028.90 653.00 $8,375.90 Prepare the necessary adjusting entries at May 31, 2007. (For multiple debit/credit entries, list accounts in order of magnitude.) Date Account / Description May 31 Cash Miscellaneous expense Notes receivable Interest revenue (To record the collection of note receivable) May 31 Accounts receivable Cash (To record NSF check) May 31 Sales Cash (To record deposit error) May 31 Accounts payable Cash (To record check error) May 31 Miscellaneous expense Cash (To record check printing charge) Debit $ 2,290.00 $ 20.00 Credit $ 2,200.00 $ 110.00 $ 580.00 $ 580.00 $ 6.00 $ 6.00 $ 27.00 $ 27.00 $ 40.00 $ 40.00 AHHH P11-2A ALPHA CORPORATION Partial Balance Sheet December 31, 2007 Stockholders' equity Paid-in capital Capital stock 8% Preferred stock, $100 par value, noncumulative, 5,000 shares authorized, 4,000 shares issued and outstanding Common stock, no par, $5 stated value 300,000 shares authorized, 203,000 shares issued and 197,000 shares outstanding Total capital stock Additional paid-in capital In excess of par value - preferred stock In excess of stated value - common stock Total additional paid-in capital Total paid-in capital Retained earnings Total paid-in capital and retained earnings Less: Treasury stock (6,000 common shares) Total Stockholders' Equity Payout ratio Earnings per Share $98,500 $280,000 = 35.2% $ 15,000 483,600 498,600 1,913,600 837,500 2,751,100 (47,000) $ 2,704,100 1,015,000 $ 1,415,000 $400,000 $280,000 - $32,000 = $248,000 = $ 1.27 (195,000 * + 197,000 **)/2 $196,000 * 200,000 - 5,000 ** 203,000 - 6,000 Return on common stockholders' equity $280,000 - $32,000 = $248,000 = 11.2 % ($2,128,000 a + $2,289,100 b)/2 $2,208,550 aBeginning common stockholders equity: $1,000,000 + $480,000 + $688,000 - $40,000 bEnding common stockholders equity: $1,015,000 + $483,600 + $837,500 - $47,000 P11-5A Milner Corporation has been authorized to issue 20,000 shares of $100 par value, 10%, noncumulative preferred stock and 1,000,000 shares of no-par common stock. The corporation assigned a $5 stated value to the common stock. At December 31, 2007, the ledger contained the following balances pertaining to stockholders' equity. Preferred Stock Paid-in Capital in Excess of Par Value-Preferred Stock Common Stock Paid-in Capital in Excess of Stated Value-Common Stock Treasury Stock-Common (5,000 shares) Retained Earnings $130,000 20,000 2,000,000 1,850,000 55,000 82,000 The preferred stock was issued for $150,000 cash. All common stock issued was for cash. In November 5,000 shares of common stock were purchased for the treasury at a per share cost of $11. No dividends were declared in 2007. Prepare the journal entries for the following. (For multiple debit/credit entries, list accounts in order of magnitude.) (1) Issuance of preferred stock for cash. Date (1) Account / Description Cash Preferred stock Paid-in capital in excess of par value-preferred Debit $150,000 Credit $130,000 $20,000 (2) Issuance of common stock for cash. Date (2) Account / Description Cash Common stock Paid-in capital in excess of stated value-common Debit $3,850,000 Credit $2,000,000 $1,850,000 (3) Purchase of common treasury stock for cash. Date (3) Account / Description Treasury stock Cash Debit $55,000 Credit $55,000 Complete the stockholders' equity section of the balance sheet at December 31, 2007 below. MILNER CORPORATION Partial Balance Sheet December 31, 2007 Stockholders' equity Paid-in capital Capital stock 10% Preferred stock, $100 par value, noncumulative, 20,000 shares authorized, 1,300 shares issued and outstanding Common stock, no par, $5 stated value 1,000,000 shares authorized, 400,000 shares issued, and 395,000 shares outstanding Total capital stock Additional paid-in capital In excess of par value-preferred stock In excess of stated value-common stock 20,000 1,850,000 2,000,000 $2,130,000 $130,000 Total additional paid-in capital Total paid-in capital Retained earnings Total paid-in capital and retained earnings Less: Treasury stock (5,000 common shares) Total Stockholders' Equity E3-15 1,870,000 4,000,000 82,000 4,082,000 (55,000) $4,027,000 The accounts in the ledger of Dependable Delivery Service contain the following balances on July 31, 2007. Accounts Receivable Accounts Payable Cash Delivery Equipment Gas and Oil Expense Insurance Expense Notes Payable, due 2010 $13,400 7,400 ? 59,360 758 600 28,450 Prepaid Insurance Repair Expense Service Revenue Dividends Common Stock Salaries Expense Salaries Payable Retained Earnings (July 1, 2007) $1,800 1,200 15,500 700 40,000 4,428 900 5,200 Complete the following Trial Balance. (If a number for a column should be blank enter a 0 in the appropriate box, all boxes must be filled.) DEPENDABLE DELIVERY SERVICE Trial Balance July 31, 2007 Debit Cash Accounts Receivable Prepaid Insurance Delivery Equipment Accounts Payable Salaries Payable Notes Payable Due 2010 Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Gas and Oil Expense Repair Expense Insurance Expense $ 15204 13,400 1,800 59,360 0 0 0 0 0 700 0 4,428 758 1,200 600 $ 97450 Credit $0 0 0 0 7,400 900 28,450 40,000 5,200 0 15,500 0 0 0 0 $ 97450 Complete the income statement, statement of retained earnings, and classified balance sheet. (List expenses in order of magnitude, assets in order of liquidity and liabilities in order of magnitude.) DEPENDABLE DELIVERY SERVICE Income Statement For Month Ended July 31, 2007 Revenues Service Revenue Expenses Salaries Expense Repair Expense Gas & Oil Expense Insurance Expense Total expenses Net income DEPENDABLE DELIVERY SERVICE Retained Earnings Statement For Month Ended July 31, 2007 Retained earnings, July 1 Add: Net income Less: Dividends Retained earnings, July 31 DEPENDABLE DELIVERY SERVICE Balance Sheet July 31, 2007 Assets Current Assets Cash Accounts receivable Prepaid insurance Total current assets Delivery equipment Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Salaries payable Total current liabilities Notes payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 40,000 13,014 53014 $ 89764 $ 7400 900 $ 8300 28,450 36750 $ 15204 13,400 1,800 $ 30404 59,360 $ 89764 $ 5,200 8514 13,714 700 $ 13,014 $ 4428 1200 758 600 6986 $ 8514 $ 15,500

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Calhoun Community College - MTH - 238
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UC Irvine - PSB - P9
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UC Irvine - PSB - P9
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University of Alabama in Huntsville - CPE - 212
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UAHCPE 212Fundamentals of Software Engineering Agenda Class 10 Linked Lists Linked Lists Key ConceptsUAHCPE 212Today Last Time ListsThis Time Linked ListsUAHCPE 212Linked Lists Non-Contiguous (Usually) Linear Structures
University of Alabama in Huntsville - CPE - 212
UAHCPE 212Fundamentals of Software Engineering Agenda Class 11 Linked Lists 2 Linked Lists Application Key ConceptsUAHCPE 212Today Last Time First Fundamental Structure, Linked ListsThis Time Bagged AgainUAHCPE 212Linked List
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UAHCPE 212Fundamentals of Software Engineering Agenda Class 10 List ADT The List Key ConceptsUAHCPE 212Last TimeTemplates Function Templates Class Templates Capture Behavior Syntax IssuesUAHCPE 212This Time Example: The
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UAHCPE 212Fundamentals of Software Engineering Agenda Class 5 Classes and Operator Overloads More on Classes Operator Overloading Key ConceptsUAHCPE 212Last Time Concept of a class Common attributesBasic class definitions and util
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UAHCPE 212Fundamentals of Software Engineering Agenda Class 5 Pointers and Dynamic MemoryPointers and Dynamic memory Key ConceptsUAHCPE 212Help ResourcesFirst Read Text Ask questions in class emailNext Schedule extra instruct
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Iowa State - TSM - 363
Iowa State - TSM - 363
Iowa State - TSM - 363
Agricultural and Biosystems Engineering Dept. Iowa State University11/16/06 SKWTSM 363 - Exam 31 - 8 ! x 11 formula sheet (both sides) h Multiple Choice: 2 points each (40%) 1) To use a thermostat to control a heater, connect to common and close
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ECO 230 Economic Statistics Answer Key to Homework #3Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Ex.1 (2.5 points), Ex.3 (2.5 points), Ex. 6 (2.5 points). 0.5 points were added for the presence of each of the remaining 5 exerc
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ECO 230 Economic Statistics Answer Key to Homework #5Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Ex.3 (3 points), Ex.6 (3 points), Ex. 4 (2.5 points), and 0.5 points were added for the presence of each of the remaining 3 exerc
Rochester - ECO - 230
ECO 230 Economic Statistics Homework #6 Due date: Tuesday, March 6thMarianna Kudlyak Spring 2007Total points: 10. Graded exercises: Ex.4 (2 points), Ex.6 (2 points), Ex. 8 (3 points), and 0.7 points were subtracted for the absence of each of the
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #7Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Total points: 10. Graded exercises: Exercise 2 (1.5 points),3 (1.5 points), 7(2 points), and 8(3 points). Half point was added fo
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #8 Total points: 10. Exercise 1. Newbold, Carlson and Thorne, Problem 6.75, p.227.Marianna Kudlyak Spring 2007Exercise 2. Newbold, Carlson and Thorne, Problem 6.91, p.228.Exercise 3. The amount
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #9Marianna Kudlyak Spring 2007Graded exercises: Exercise 1 (2 points),2 (2 points), 4 (2 points), and 5 (2 points). One point for the presence of each of the remaining 2 exercises. Exercise 1. Ne
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #10Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Exercise 1 (2 points),3 (2 points), 4 (2 points), and 7 (2 points). Half point for the presence of each of the remaining 3 exerc
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #11Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Ex. 1 (2pts), Ex5(3pts), and Ex6 (3pts). 0.5pts for the presence of each of the remaining 4 exercises (Ex.8 was not graded). Exe
Rochester - ECO - 230
ECO 230 Economic Statistics Answer Key to Homework #12Marianna Kudlyak Spring 2007Total points: 10. Graded exercises: Ex. 1 (2pts), Ex. 6(2pts), Ex. 7 (2pts) and Ex. 8 (2pts). 0.7pts for the presence of each of the remaining 3 exercises. Exercise
Rochester - ECO - 230
ECO 230 Economic StatisticsMarianna Kudlyak Spring 2007Answer Key to Homework #13 Total points: 10. Graded exercises: Ex. 1 (3pts), Ex. 6(2.5pts), Ex. 7 (2.5pts); 0.5pts for the presence of each of the remaining 4 exercises. Exercise 1. Newbold,
Rochester - MTH - 201
HOMEWORK #1 MTH 201, FALL 2007 DUE: WEDNESDAY, SEPTEMBER 19, IN-CLASS AT THE BEGINNING OF CLASS The following problems are numbered the same in both the 6th and 7th edition of Ross's textbook. Chapter 1, Problems: 13, 22; Chapter 1, Theoretical Exe