1. Open the general ledger accounts and enter the balances for January 1, 2016. Obtain the

necessary figures from the trial balance.

2. Analyze the transactions on the pages that follow, and record them in the general journal.

Use 1 as the number of the first journal page.

3. Post the journal entries to the general ledger accounts.

4. Prepare a worksheet for the year ended December 31, 2016.

5. Prepare a summary income statement for the year ended December 31, 2016.

6. Prepare a statement of retained earnings for the year ended December 31, 2016.

7. Prepare a balance sheet as of December 31, 2016.

8. Journalize and post the adjusting entries as of December 31, 2016.

9. Journalize and post the closing entries as of December 31, 2016.

Analyze: Assume that the firm declared and issued a 3:1 stock split of common stock in 2016.

What is the effect on total par value?

Transactions

Jan 5 issued 1,000 shares for 5 percent $100 par preferred stock for $101 per share. (The corporation has been authorized to issue 10,000 shares of preferred stock)

Jan 15 paid estimated income taxes of $17,000 occurred at the end of 2015

Apr 1 paid semiannual bond interest on the 10-year, 10 percent bonds payable and amortized the premium for the period since Dec 31, 2015 (the interest and premium were recorded as of Dec 31, 2015; the entry was not reversed) the bonds were issued Oct 1, 2014, at a price of 103, and they mature on Oct 1, 2024. Use straight-line amortization

July 1 The Texas Companys board of directors declared a cash dividend of $0.10 per share on the common stock. The dividend is payable on July 26 to stockholders of record as of July 15

July 26 Paid the cash dividend on the common stock

Aug 12 A purchase of 600 preferred stock on January 5 asked the corporation to repurchase the shares. The corporation repurchased the stock for $102 per share. The stock is to be held by the corporation until it can be resold to another purchaser

Oct 1 paid the semiannual bond interest and recorded amortization of the bond premium

Dec 1 Because of its good cash position and current bond prices, the Texas Company repurchased and retired $20,000 par value of the 10 percent bonds that is outstanding. The repurchase price was 98, plus accrued interest.

Dec 15 The Companys board of directors declared a cash dividend of $5 per share on the outstanding preferred stock. This dividend is payable on Jan 10 to stockholders of record as of Dec 31

Dec 15 the board of directors also declared a 10 percent stock dividend on the outstanding common stock the new shares are to be distributed on January 10 to stockholders of records as of December 31. At that time the dividend was declared, the common stock had a fair market value of $15 per share.

Dec 30 Received a subscription for 500 shares of the Texas Companys common stock at $12 per share from the companys president. Received cash equal to one-half the purchase price on the date of subscription. The balance of the purchase price is to be paid on January 15, 2017. (the subscriber will not be entitled to the stock dividend previously decrlared on the outstanding shares of common stock)

Dec 30. Because of management of Texas foresees the need to expand a warehouse the firm owns, the board of directors has restricted future dividends payments. Record the appropriation of $100,000 of retained earnings for plant expansion.

	Debit	Credit
cash	$176,000
Accounts Receivable	170,000.00
Allowance for Doubtful Accounts		$5,000
Subscriptions Receivable - Common Stock
Interest Receivable
Merchandise Inventory	150,000.00
Land	85,000.00
Buildings	225,000.00
Accumulated Depreciation - Buildings		22,500.00
Furniture and Equipment	70,000.00
Accumulaed Depereciation - Furniture and Equipment		14,000.00
Organization Costs	6,000.00
Accounts Payable		75,000.00
Interest Payable		2,500.00
Estimated Income taxes Payable		17,000.00
Dividends Payable - Preferred Stock
Dividends Payable - Common Stock
10-year, 10% Bonds Payable		100,000.00
Premium on Bonds Payable		2,625.00
5% Preferred Stock ($100 par, 10,000 shares authorized)		100,000.00
Paid-in Capital in Excess of par - Preferred Stock		10,000.00
Common Stock ($10 par, 100,00 shares authorized)		200,000.00
Paid in capital in excess of Par - Common Stock		25,000.00
common Stock Subsribed
Common Stock Dividend Distributable
Retained Earnings Appropriated		100,000.00
retained Earnings Unappropriated		208,375.00
Treasure Stock - Preferred
Income Summary
Sales
Purchases
Operating Expenses
Interest Income
Gain on early Retirement of Bonds Payable
Interest Epense
Amortization of Organization Costs
Income Tax Expense
Totals	$882,000	882,000.00