mid term #1b problems -- post

mid term #1b problems -- post - Name and id# 1) On 1/1/08...

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Name and id# 3) GSSE's costs of providing services during 2008 was $600,000 all of which was paid in cash. There are no unaccrued expenses to book. 5) On 7/15/08 GSSE purchased 10,000 shares of K-2 Inc. for $15 per share (total $150,000) as a long-term investment. 6) On 9/30/08 K-2 paid a dividend of $5 per share. 7) On 10/31/08 GSSE sold 5,000 shares of K-2 at $30 per share total $150,000. 8) On 11/14/08 GSSE paid you a dividend of $10 per share total $100,000. 9) At the close of day 12/31/08 K-2 was trading for $5 per share. For this problem we are going to ignore other assets required to run a company such as equipment, etc. For this problem -- assume no taxes are paid or expenses -- i.e. do not consider taxes for this problem Do not assume that every space requires a number. Hint if you have difficulties roll forward cash and look at the balance sheet and try to figure out why it is not balancing. Hint what do investors want to know about your investments in Apple and IBM and how do you tell them? Income Statement Statement of Retained Earnings Income from core operations: Retained earnings 1/1/08 $- Revenue Income from core operations Ending retained earnings Other income: Other income Net income Statement of Comprehensive Income Beginning balance - Comprehensive income Ending balance 1) On 1/1/08 you start your dream company Global Ski and Surf Enterprises ("GSSE") a travel agency catering to international skiers and surfers. You are the sole investor investing $100,000 of your hard saved money in exchange for 10,000 of common stock, $0 par (no par means no APIC) 2) During the year GSSE received $1,200,000 from its customers, however, $200,000 was paid on 12/29/08 in advance for services to provided in 2009. In addition , GSSE, provided $300,000 of services during 2008 for which it has not been paid, but expects to be paid in early 2009. 4) On 6/30/08 GSSE borrowed $1,000,000 @ 10%. Interest is paid annually on 6/30 starting 6/30/09. The full $1,000,000 is paid as a balloon payment in five years. Problem: complete the following financial statements.
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This note was uploaded on 01/31/2010 for the course ECON 136A taught by Professor Anderson during the Winter '08 term at UCSB.

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mid term #1b problems -- post - Name and id# 1) On 1/1/08...

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