Newgrange Corporation purchased furniture and fixtures on July 1, 2004, for a total cost of $65,000. Management estimated useful life at 15 years and residual value at $5,000. Straight-line depreciation is used and computed to the nearest whole month. Newgrange Corporation’s year end is December 31.Required:h.Prepare the adjusting entry for depreciation on December 31, 2004.i.When the accumulated depreciation was $10,000, the company determined that they would use the furniture and fixtures for only 7 more years, and then sell the furniture and fixtures for $6,000. Prepare the adjusting entry for depreciation on December 31 using the revised estimate.Solution:
a.Western Atlantic Corporation recently lost some of its accounting records in a fire on August 10, 2004. The following information has been salvaged from the rubble:The $100 par value, Preferred Stock account has a balance of $229,000. The $50 par value, common stock was issued for an average price of $55 per share. The Paid-in Capital in Excess of Par Value-Preferred account has a balance of $22,900. There are 30,000 shares of common stock issued. The Retained Earnings account has a balance of $172,000 on August 10, 2004.Required:a.Determine the number of shares of preferred stock issued.b.What is the balance in the Common Stock account?c.What was the average issue price of a share of preferred stock?d.Determine the balance in the Paid-in Capital in Excess of Par Value-Common account.e.What is total paid-in capital?f.What is total stockholders’ equity?