a. On January 1, 2011, Nordham issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
b. On January 1, 2011, Nordham also issued 1,000 shares of $10 par, common stock for $23,000.
c. Nordham reacquired 300 shares of its common stock on July 1, 2011, for $49 per share.
d. On September 30, 2011, Nordham wrote off as uncollectible the account of Elrich Corporation ($280).
e. On December 13, 2011, Nordham purchased merchandises on account from Gong Co. $9,000, terms 2/10, n/30.
f. On December 18, 2011, Nordham sold merchandises on account $12,000, terms 3/10, n/30. The cost of the merchandises sold was $8,000.
g. On December 23, 2011, Nordham paid Gong Co. In full, less discount.
h. On December 27, 2011,Nordham received collections in full, less discount from customers billed on December 18, 2011.
i. On December 31, 2011, the payroll for the month of December consists of salaries and wages of $60,000. All salaries and wages are subject to 7.5% FICA taxes. A total of $8,900 federal income taxes are withheld. The salaries and wages are paid on January 1, 2012.
j. Employer's payroll taxes include 7.5% FICA taxes, a 5.4% SUTA and 0.8% FUTA taxes.
k. On December 31, 2011, Nordham declared the annual preferred stock dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2012.
l. Nordham estimates that uncollectible accounts receivable at year-end is $5,100.
m. The building is being depreciated using straight-line method over 30 years. The salvage value is $5,000.
n. The equipment is being depreciated using straight-line method over 10 years. The salvage value is $4,000.
o. The unearned rent was collected on October 1, 2011. It was receipt of 4 month's rent in advance (October 1, 2011 through January 31, 2012).
p. The 10% bonds payable pay interest every January 1 and July 1. The interest for the 6 months ended December 31, 2011, has not been paid or recorded.
1. Record the above unrecorded transactions (5 points each, 80 points total) into the financial integrated framework shown in the excel file on Blackboard. The beginning balances have already been entered. See page 109 of textbook to see an example.
2. Prepare a multiple-step income statement (10 points) and a classified balance sheet (10 points) for the year, ending December 31, 2011. See page 130 of textbook for example of multiple-step income statement and see pages 96, 224, 260, and 291 for examples of classified balance sheet.
To submit your test, complete the three spreadsheets in the excel file posted on Blackboard, save your file using your last name for the file name (e.g., bizarro.xlsx). Upload the
This question was asked on Apr 27, 2011.
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