acy1111-ch11-12

acy1111-ch11-12 - EXERCISE 11 -2 July 1, 2008 Cash

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Unformatted text preview: EXERCISE 11 -2 July 1, 2008 Cash ..................................................................... .. 50,000 Notes Payable ............................................... .. 50,000 November 1, 2008 Cash ..................................................................... .. 60,000 _ Notes Payable ............................................... .. 60,000 December 31, 2008 Interest Expense ................................................. .. 3,000 ($50,000 X 12% X 6/12) Interest Payable ............................................ .. 3,000 Interest Expense ................................................. .. 1,000 ($60,000 X 10% X 2/12) Interest Payable ............................................ .. 1,000 February 1, 2009 Notes Payable ...................................................... .. 60,000 Interest Payable ................................................... .. 1,000 Interest Expense .................................................. .. 500 \ Cash ............................................................... .. 61,500 April 1, 2009 , Notes Payable ...................................................... .. 50,000 Interest Payable ................................................... .. 3,000 Interest Expense .................................................. .. 1,500 , Cash ............................................................... .. 54,500 PROBLEM 12-6A (a) BRADSTROM COMPANY Retained Earnings Statement For the Year Ended December 31, 2008 Balance, January 1, as reported ............................ .. $ 900,000 Correction for understatement of net income in 2007 (depreciation error) .................. .. 80,000 Balance, January 1, as adjusted ............................ .. 980,000 Add: Net Income ................................................... .. 3,600,000 4,580,000 Less: Cash dividends—common ......................... .. $1,485,000* Cash dividends—preferred ......................... .. 700,000 2,185,000 Balance, December 31 ............................................ .. §2,395,000 *(1,500,000 — 15,000) x $1 PROBLEM 12-6A (Continued) (b) BRADSTROM COMPANY Partial Balance Sheet Stockholders’ equity Paid-in capital Capital stock Preferred stock, $100 par value, 7%, cumulative, 100,000 shares issued and outstanding .................. .. $10,000,000 Common stock, $10 par value, 1,500,000 shares issued and 1,485,000 shares outstanding ......................... .. 15,000,000 Total capital stock ............ .. 25,000,000 Additional paid-in capital In excess of par value— preferred stock .................... .. $ 500,000 In excess of par value— common stock ..................... .. 1,500,000 Total additional paid-in capital ............................ .. 2,000,000 Total paid-in capital ......... .. 27,000,000 Retained earnings ................................. .. 2,395,000 Total paid-in capital and retained earnings ......... .. 29,395,000 Less: Treasury stock—common (15,000 shares) ....................... .. (240,000) Total stockholders’ equity ............................ .. W 12-41 © 2009 For Instructor Use Only ...
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acy1111-ch11-12 - EXERCISE 11 -2 July 1, 2008 Cash

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