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Unformatted text preview: d member, you felt that the 2012 cash flows were insufficient to both fund future operations and pay a dividend. P14–19 a. Original entries 1a. Cash (+A) Common Stock (+SE) Additional Paid­In Capital, Common Stock (+SE) Issued common stock. 1b. 2. 3. 1,500,000 750,000 750,000 Cash (+A) Preferred Stock (+SE) Additional Paid­In Capital, Preferred Stock (+SE) Issued preferred stock. 102,000 Fixed Assets (+A) Cash (–A) Purchased fixed assets. 750,000 Cash (+A) 29,200a 100,000 2,000 750,000 Bonds Payable (+L) Premium on Bonds Payable (+L) Issued bonds. a b 4. 20,000b 9,200 $29,200 = 20 bonds $1,000 face value per bond 146% $20,000 = 20 bonds $1,000 face value per bond Land (+A) Common Stock (+SE) Additional Paid­In Capital, Common Stock (+SE) Purchased land in exchange for common stock. 40,000 15,000 25,000 P14–19 Continued 5a. Inventory (+A) Accounts Payable (+L) Purchased inventory on account. 2,000,000 2,000,000 5b. Accounts Payable (–L) Cash (–A) Made payment to suppliers. 1,075,000 1,075,000 6a. Cash (+A) Sales (R, +SE) Made sales. 2,050,000 2,050,000 6b. Cost of Goods Sold (E, –SE) Inventory (–A) Recognized cost of inventory sold. 875,000 Prepaid Insurance (+A) Cash (–A) Purchased two­year insurance policy. 80,000 Marketable Securities (+A) Cash (–A) Purchased marketable securities. 250,000 Accounts Receivable (+A) Sales (R, +SE) Made sales on account. 880,000 Cost of Goods Sold (E, –SE) Inventory (–A) Recognized cost of inventory sold. 490,000 Cash (+A) Accounts Receivable (–A) Collected cash from customers. 500,000 Miscellaneous Expenses (E, –SE) Cash (–A) Incurred and paid miscellaneous expenses. 500,000 Dividends (–SE) Dividends Payable (+L) Declared dividends. 100,000 Interest Expense (E, –SE) Premium on Bonds Payable (–L) Cash (–A) Incurred and paid interest. 1,460a 140 7. 8. 9a. 9b. 9c. 10. 11. 12. 875,000 80,000 250,000 880,000 490,000 500,000 500,000 100,000 1,600b _____________________ a b $1,460 = Book value of $29...
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This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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